Climate Change

Climate Forests Investments Jan 1, 2001
David Biello

In 1997 the US Senate resolved to reject international efforts to confront climate change by a vote of 95-0. In 2005, more than half of the Senate–53 Senators to be exact–voted for a resolution calling for "mandatory, market-based limits" on greenhouse gases. Clearly, the climate in the US Senate is changing. The Ecosystem Marketplace takes a look at how the Senate changed its mind and what will happen going forward. In July of 1997, Senator Chuck Hagel–a freshly elected legislator from Nebraska–became the Republican co-sponsor for the unanimously approved Senate Resolution 98. Leaving little doubt as to the Senate's stance on the Kyoto Protocol, the resolution read "the United States should not be a signatory to any protocol to…mandate new commitments to limit or reduce greenhouse gas emissions." The document justified its position by stating that mandatory emissions cuts likely would cause "serious harm to the economy of the United States." The Senate's overwhelming support–95 Senators in favor, none opposed–for Resolution 98 effectively doomed U.S. support for the Kyoto Protocol long before President George W. Bush definitively withdrew the country from the climate treaty in 2001. With Bush safely re-elected in 2004, hopes for federal government action on climate change remained dim. But in June of 2005 Senator Chuck Hagel–two years into his second term–sponsored an amendment to the energy bill pending before Congress, H.R. 6, that provides financial incentives to US firms for the development and use of technologies that reduce the emission of greenhouse gases (GHGs). "The debate is not about whether we should take action, but rather what kind of action we should take," Hagel said in a floor speech when offering the amendment. "Achieving reductions in [GHG] emissions is one of the more important challenges of our time. In developing a sound energy policy, America has an opportunity and a responsibility for global climate policy leadership." Again, Hagel's amendment proved popular; the amendment passed with the support of 66 of Hagel's fellow Senators–a two-thirds majority. The ironic and important difference between Resolution 98 and H.R. 6, however, was that the first proposal was designed to curb action on climate change, while the second was designed to spur it.

Strong support

The Hagel-Pryor amendment isn't exactly revolutionary in its effects. It is tied to GHG intensity–a measure of GHGs emitted per unit of economic production that has been supported by the Bush administration and opposed by environmentalists. It sets no mandatory targets for reductions and places no caps on GHG emissions, not even voluntary ones. It merely frees up government money for advanced technology development and its export. The list of names supporting the amendment, however, couldn't be more revolutionary. A slew of Republicans formerly opposed to all climate change measures, including Senator James Inhofe of Oklahoma, longtime leader of the global warming skeptics in the Senate, signed on in support of the Hagel-Pryor amendment. "While there is no scientific consensus on causation, Senator Hagel's approach, if you believe in devoting more resources to the issue, is reasonable in that it embraces President Bush's technology-based and economy-friendly approach," says Bill Holbrook, spokesman for the Republican majority on the Senate Environment & Public Works Committee, which Inhofe chairs. Fifty-three Senators also voted in favor of a resolution brought forward by Senator Jeff Bingaman of New Mexico that read, in part: "It is the sense of the Senate that Congress should enact a comprehensive and effective national program of mandatory, market-based limits and incentives on emissions of greenhouse gases that slow, stop, and reverse the growth of such emissions at a rate and in a manner that: (1) will not significantly harm the United States economy; and (2) will encourage comparable action by other nations that are major trading partners and key contributors to global emissions." "A good majority of the Senate has now said 'We need to worry about climate change. The debate on the science has been resolved enough that we should be prepared to act–and those actions include mandatory measures,'" says Manik Roy, director of congressional affairs for thinktank the Pew Center on Global Climate Change. The group of legislators supporting this new understanding includes Republicans–Senators Lamar Alexander, Mike DeWine, and Lindsey Graham–and Democrats–Senators Robert Byrd and Mary Landrieu–not known for their association with climate change measures. "These are members who previously never supported mandatory controls but now believe that mandatory controls are necessary," says David Doniger, policy director for the Climate Center at environmental gorup the Natural Resources Defense Council (NRDC). "The debate is now moving from whether to act to how. That's a major step forward."

Mixed signals

Of course, not all of the recent news emerging from the Senate suggests a sea change with regard to climate change policy. To wit, the fate of the McCain-Lieberman Climate Stewardship Act this year represented a less than happy result for climate activists. Republican Senator John McCain and his Democratic counterpart Joe Lieberman first introduced their Climate Stewardship Act in the fall of 2003. The bill would have charged the Environmental Protection Agency (EPA) with setting caps on carbon dioxide–the most ubiquitous greenhouse gas–emissions from power plants, industrial boilers, and vehicles, among other sectors of the US economy. Setting a target of stabilizing emissions at 2000 levels by 2010, the bill would have set up a nationwide cap-and-trade scheme. Such a scheme would allow affected sources to buy allowances if they were going to emit more than their quota or sell allowances if they were going to emit less. Such a cap-and trade market had already proved effective in reducing emissions of sulfur dioxide and nitrogen oxides. "We must take action, and act appropriately," McCain argued in 2003. "The time has come for us to accept what is known and start to solve this highly complex problem. As many of the top scientists throughout the world have stated, the sooner we start to reduce these emissions the better off we will be in future." The measure was defeated, but only by eight votes. "We've lost a batttle today, but we'll win over time because climate change is real," McCain said. "And we will overcome the influence of the special interests over time." Returning to the legislative trenches, McCain and Lieberman made a few additions to their 2003 bill– including money for the construction of new nuclear power plants–and brought it forward as an amendment to the energy bill this year. But instead of attracting moderates with its subsidies, the McCain-Lieberman amendment lost ground, with 60 senators opposed and only 38 senators supporting. "He says he'll come back and eventually pass it but he's going in the wrong direction," says Myron Ebell, director of global warming policy at the Competitive Enterprises Institute (CEI). "We were extremely pleased obviously." Most of the loss of support can be attributed to nuclear energy concerns. "Senators [Barbara] Boxer, [Mark] Dayton, [Tom] Harkin and [Russ] Feingold, who strongly support the need for limits on global warming pollution voted against the bill this time around because they can't support the nuclear power plant subsidies," NRDC's Doniger explains. "If you think you can regulate carbon dioxide without new nuclear you're just off on some other planet," argues one utility lobbyist who declined to be identified. "The environmental community does not have a practical approach to this issue."

Consensus approach?

There was, however, an approach broached in the weeks of debate before the votes that seemed to be both practical physically and politically: an amendment nearly offered by Senator Bingaman that would set up a less stringent national cap-and-trade program. Based on a strategy prepared in December of 2004 by the National Commission on Energy Policy (NCEP)–a "bipartisan group of 16 of the nation's leading energy experts" drawn from industry, government, academia and labor and advocacy groups–the Bingaman proposal sought to establish declining caps on GHG emissions intensity starting in 2010. Under the terms of the proposal, all emitters in the US would be required to meet such a cap, though with the option to trade allowances amongst themselves. In addition, the proposal includes a "safety valve," in which regulated utilities would be allowed to pay $7 per metric ton of CO2 to the US government in lieu of reducing emissions. "It is a very practical approach to doing something given all the competing interests," says William Pizer, a fellow at Resources For the Future (RFF) and a NCEP member. "We have to be concerned about natural gas and energy prices as well as the role of coal in our energy future. When you look at those things under the microscope you come up with something along the lines of the Bingaman proposal." "It's a slightly less aggressive cap," he explains. "But more importantly it puts the risk on the environment rather than on the economy." Of course, the skeptics do not support any such measures. "Market-based mechanism means market socialism. We are, in principle, opposed to market socialism so we are going to oppose cap-and-trade or any other scheme," CEI's Ebell says. "It's a hidden tax and it's a very inefficient one. If these people are serious and not just playing they should propose a tax." The proposal did not come up for a vote despite garnering the support of the chair of the Senate's Energy Committee (and fellow New Mexican) Pete Domenici. "A proposal like Bingaman was contemplating is complex," Pizer says. "There are a lot of details that one wants to be aware of, think about and agree to before one votes on it. There wasn't enough time to bring everyone up to speed." But there may have been an even more practical reason for not bringing the Bingaman proposal forward. "There's no point in offering something that is not going to win. In fact, it's not a good thing to do around here. Once something is dead, it's dead," explains Jude McCartin, a spokeswoman for Senator Bingaman. "We certainly did not want it to be prematurely killed without having first had the necessary debate." Thanks to the support of Domenici, the Bingaman proposal will most likely get that debate as the Energy Committee chairman has pledged to hold hearings on the issue by the end of July, most likely beginning on July 21. The first hearing will likely concentrate on the science of climate change and the range of costs entailed by mitigation efforts like those proposed by the Bingaman proposal. This might bring the Energy Committee into conflict with the Environment & Public Works Committee chaired by Senator Inhofe, who has often stated that his committee has jurisdiction over any climate change legislation. "It's been years since we've had a legislative hearing on a major climate change measure," the Pew Center's Roy says. "If Senator Domenici holds legislative hearings that will be big news." Senator Bingaman, meanwhile, has committed to working hard to push the proposal forward. "He is willing to devote the time necessary to educate the Senate about the proposal," McCartin says. "The more we focus on it in the Senate through hearings, the more it is on the agenda for Congress."

The climate ahead

Ultimately, it is the Congress as a whole that will decide the fate of this year's energy legislation as well as any eventual climate change proposal. And the Republican leadership in the House of Representatives has shown no inclination to acknowledge the reality of climate change, let alone the need to do something about it. Experts nonetheless seem to agree that the Hagel amendment is likely to make it through the conference committee that will try to reconcile the House and Senate versions of the energy bill. "Barton [chair of the House energy committee] said that what he will not accept is mandatory controls on emissions, he did not say he would not accept anything else. It was a strong vote in the Senate," CEI's Ebell says. "I assume a lot of the stuff in the Hagel amendment will end up in the final energy bill." And the Hagel-Pryor amendment may be getting support from some unlikely quarters, including the White House. After all, at the recent G8 summit in Gleneagles, President Bush admitted that climate change was a problem that needed to be addressed, perhaps signaling a softening in his stance. "Even the Bush administration believes action needs to be taken, it's a question of what sorts of action," RFF's Pizer says. According to Dan Riedinger, a spokesman for utility group the Edison Electric Institute (EEI), industry also supports the amendment. If the amendment survives, it will mark one of the first times the House of Representatives has really acknowledged that climate change is a problem. "It would be a big step forward for the House if it acceded to the Senate on the Hagel amendment," says Roy of the Pew Center. Whatever the case, climate change legislation has a new and vigorous life in the Senate. "My hope is that when a Senator stands up and says 'I'm in favor of a mandatory policy,' then Domenici and Bingaman can go back to that Senator and say 'What do you need to pass this proposal?" RFF's Pizer says. "The battle line should be over what the price is and how hard we push, recognizing that the harder we push on emissions, the more pressure we put on natural gas markets." "The Senate seems engaged in a way that they haven't been engaged before," he adds. Importantly, this new engagement is drawing the attention and support of a growing number of observers. "There's a lot of things on the table right now, ranging from McCain-Lieberman, to Carper and Jeffords four pollutant approaches, to Hagel and the Sense of the Senate, and now Bingaman and the NCEP proposal," says EEI's Riedinger. "They're spending a lot of time looking at climate change and the best way to approach it from a policy point of view." "The number of Senators who will attack the science has dwindled to two or three and even the President is making noises that he accepts the science. Schwarzenegger is ready to do it. States and cities are developing real programs that will cut emissions," NRDC's Doniger says. "The sand is slipping out from under the foundations of the denial policy." David Biello is US Editor for Environmental Finance magazine and a freelance writer based in Brooklyn. He can be reached at First posted: July 14, 2005