Editore"s Note
Tilting at Windmills

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June 21, 2010

WHAT A COMPROMISE ON CAP-AND-TRADE MIGHT LOOK LIKE.... For many environmentalists, there's strong desire to see policymakers approve an ambitious cap-and-trade proposal, with broad, strict caps and minimal exemptions. There's no political support for that. The next best move would be something along the lines of the American Power Act, with a still-worthwhile cap-and-trade, which would at least be a step in the right direction. Political support appears insufficient on this, too.

But there's yet another possible compromise. White House Chief of Staff Rahm Emanuel sent a big hint to the political world last week, raising the specter of a "utilities only" approach to cap-and-trade. Sen. Joe Lieberman (I-Conn.), one of the leaders on the American Power Act, had a rather positive reaction to the proposal when talking to CNN yesterday.

So, what's this all about? In practice, a "utilities only" cap-and-trade would impose emissions limits on the electric utility sector -- and not on the economy at large. It's at least step in the right direction.

A handful of utility industry officials have also signaled they won't knock down the idea of a power plant-only emissions cap.

Electric utilities emit about a third of U.S. greenhouse gases per year. The industry has been involved for about 15 years in a similar market-based mechanism that has successfully reduced acid rain, and the sector is seeking regulatory certainty as companies look to make significant new investments over the next several decades.

Sen. Lisa Murkowski (R-Alaska), the ranking member of the Senate Energy and Natural Resources Committee, reiterated Republican opposition to any compromise on regulating carbon emissions, and said no bill with any kind of cap-and-trade, no matter how weak, can get an up-or-down vote.

But Murkowski's assessment isn't necessarily the final word on the subject.

Dave Roberts did a nice job today reviewing this compromise approach, and he had a generally positive take: "If you're going to single out one sector for cap-and-trade, electricity is the right choice. For one thing, it's the biggest emitter.... For another, most of the lowest-cost carbon reductions are expected to come from electricity." Roberts conditionally concluded that "a bill with a utility-only carbon price could be a credible step forward."

Something to keep in mind in advance of Wednesday's White House meeting.

Steve Benen 3:30 PM Permalink | Trackbacks | Comments (12)

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This works for me. While TVA spends $3 billion to clean up the country's last-worst-ever eco-disaster -- 2008's spillage of over a billion gallons of toxic coal ash sludge from the Kingston Fossil Plant in East Tennessee -- TVA in all its brilliance has decided to suspend its solar program because -- wait for it -- the program is too popular.

Yes that's right, too many people are wanting to get in on the solar revolution in Tennessee and TVA just can't have that. Maybe if the utility had to pay a price for all that dirty coal it's tearing down mountains to get at then polluting our air and water with they might decide to give solar a second chance.

Posted by: Southern Beale on June 21, 2010 at 3:36 PM | PERMALINK

Of course, the very idea of cap and trade is already a compromise with the Republicans.

Posted by: Gregory on June 21, 2010 at 3:43 PM | PERMALINK

Hm. At a minimum it seems like this would be a heavy blow against the coal industry? (I'm suggesting that's a good thing, mind you.)

Would it be possible under such a set of rules for large industrial concerns to cheat by just installing a power plant on site and then drawing from that instead of the grid?

Posted by: mcc on June 21, 2010 at 3:45 PM | PERMALINK

This would seem like a strong blow against electric cars. You'd end up with a situation where gas-powered cars are basically subsidized by not having to pay for their carbon emissions, but electric ones are penalized because they _do_ have to pay via the utility cap which raises the price of the electricity to charge them.

Posted by: Chris Green on June 21, 2010 at 3:53 PM | PERMALINK

All cap & trade will do is allow big polluters to commit fraud on a massive scale. It's already happening in other parts of the world, and you can bet if the polluters can get their hands on fake credits for less, they damn well will.

We need incentives and credits to develop alternative energy, funding for education to train scientists and technicians, and some means to get people to use it without punishing them via taxation that is regressive and will hurt the poor the most.

Posted by: J on June 21, 2010 at 3:59 PM | PERMALINK

If anyone complains about the electricity sector being unfairly singled out, they should get on board with a broad-based plan.

Posted by: Grumpy on June 21, 2010 at 4:12 PM | PERMALINK

Melt. Baby. Melt.

Arctic Ocean ice retreating at 30-year record pace

Arctic Ocean ice cover retreated faster last month than in any previous May since satellite monitoring began more than 30 years ago, the latest sign that the polar region could be headed for another record-setting meltdown by summer’s end.
And, driven by unusually hot weather in recent weeks above the Arctic Circle, the polar ice is disappearing at an unprecedented rate, reducing overall ice extent to less than that recorded in May 2007 — the year when a record-setting retreat by mid-September alarmed climatologists and northern governments.

I feel sorry for your kids...
Then again, maybe they deserve that ugly future...
After all, no one dared to stop Lisa Murkowski et al...

Posted by: koreyel on June 21, 2010 at 4:19 PM | PERMALINK

Actually I like the idea of rewarding utilities that adopt alternative energy sources. We are going to need all the electricity we can get when electric cars come on line. We also need to work on our power grid, and we need to do that now.

I am still trying to figure out why we need cap and trade. As is often indicated it is nothing more than a system that is a natural for fraud and abuse. It doesn't really accomplish that much. Strip the oil industry of tax breaks and give them to alternative energy. Reward the future not the past.

Posted by: Ron Byers on June 21, 2010 at 4:36 PM | PERMALINK

"For many environmentalists, there's strong desire to see policymakers approve an ambitious cap-and-trade proposal..."

Why is being concerned about the survival of the human species on this planet through the use of stick and carrot economics being consigned to the DFH moniker of environmentalists? Isn't our survival on a planet that is habitable just a little more, well, primordial?

Calling it "environmental" is playing into the corporatist oligarchy that is currently destroying the gulf.

Corrected: "For those who are concerned about our survival as a species, there's strong desire to see policymakers approve an ambitious cap-and-trade proposal..."

Posted by: Bruce B on June 21, 2010 at 5:01 PM | PERMALINK

What a compromise on cap-and-trade might look like?

Well, it might look pretty much like continent-wide mega-droughts, the collapse of agriculture worldwide resulting in global famine, the loss of fresh water supplies for billions of people, the inundation of heavily populated coastal areas, the death of forests and oceans all over the world, global ecological meltdown and mass extinctions, and the end of human civilization.

But don't worry -- thanks to the "compromise" with Republicans, there will probably still be enough resources left for the Top One Percent to survive in nuclear powered, domed cities protected by Blackwater's private mercenary armies from the starving billions.

Posted by: SecularAnimist on June 21, 2010 at 5:02 PM | PERMALINK

If Joe Lieberman is for it, why am I immediately suspicious?

Posted by: dweb on June 21, 2010 at 5:04 PM | PERMALINK

Perhaps it would violate some arcane Senate ruling or other, but couldn't the original Cap and Trade bill be passed via reconciliation as long as some proportion of the funds realized from Cap and Trade were used to defray the deficit?
The Federal government could split the monies taken in between energy subsidies for low-income families, research investment, grants assisting in the start up of "green" industries and, finally, deficit reduction.
A form of Federal "user fee"?

Posted by: Doug on June 21, 2010 at 10:09 PM | PERMALINK



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