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From
the earliest days of the Obama presidency, there was 1 crucial fact and
1 crucial question about the administration’s ambitious plans to create
a New Energy economy. Fact: To get anything through Congress, there
would have to be big compromises with conservatives. Question: After
the compromises, would there be anything worth legislating?
The question’s answer began to take shape with the passage by the House of Representatives of H.R. 2454, the Amercian Clean Energy and Security Act of 2009 (ACESA), last Friday before Congress left Washington for its July 4th recess.
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An
effort to forge successful compromise was approved at a March Oval
Office meeting between the President and one of ACESA’s chief
architects, Representative Henry Waxman (D-Calif), Chair of the
powerful House Energy and Commerce Committee. At the time, many
considered the chance of such significant change being enacted highly
unlikely. The President told Waxman to proceed.
ACESA, says
veteran environmental warrior Representative Ed Markey (D-Mass), Chair
of the House Energy Subcommittee and the bill’s co-author, could
fundamentally change the way the U.S. uses energy by – finally –
attaching a price to the generation of greenhouse gas emissions (GhGs).
Waxman
and Markey have long been engaged in the fight for New Energy and
championed efforts to make a better place for it in the 2005 and 2007
energy bills. With the Democrats’ victory in 2008, they began preparing
to do something they hoped would be really important.
Before the
inauguration, Waxman and Markey met with farm groups, oil and natural
gas executives, coal producers, manufacturering industry leaders and
CEOs of the big utilities. The discussions centered on the Holy Grail
of New Energy: Putting a price on GhGs. They also covered the Holy
Grail of climate change: Putting a cap on GhGs.
The
Waxman-Markey plan was built on 3 cornerstones: (1) The plan advocated
by President Obama during his presidential campaign that called for
requiring U.S. utilities to obtain 10% of their power from New Energy
by 2012 and 25% by 2025 and called for cutting U.S. GhGs 20% by 2020
and 80% by 2050; (2) the European Union ((EU) Emissions Trading Scheme
(ETS), which capped EU member nations' GhGs and provided a market
through which those nations' emitters could maximize returns for using
New Energy, installing Energy Efficiency and reducing their emissions;
and (3) the successful cap™ system through which the U.S. and other
nations successfully solved the acid rain problem of the 1980s.
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The
problem: Waxman, Markey and the Obama administration officials who
joined them in strategy talks came to understand the problem clearly.
Business and industry saw their plan as extremely – threateningly –
expensive.
The solution: Veterans of Washington, Waxman and
Markey knew the solution. Deal making. Success in the political world
is entirely based on the understanding of one and only one aphorism. Politics is the art of the possible.
Activists
on the left clamored for stronger New Energy subsidies and tighter cuts
in GhGs. Conservatives on the right recoiled in horror at the changes
and complexities of the Renewable Electricity Standard (RES) requiring
utilities to use New Energy and of the cap™ system limiting GhGs and
establishing a whole new trading system.
Spurred on by an
administration it is now clear wants accomplishments more than it wants
ideological absolutes, Waxman and Markey searched out the sweet spot of
support, where big business, big agriculture, big industry and
prominent environmentalists could come together behind legislative
action.
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In
early May, President Obama had anther meeting with Waxman and Markey,
compared the issue of energy to the issue of emancipation for President
Lincoln and told them to keep negotiating.
With the White House behind them, Waxman and Markey crafted H.R. 2454.
To bring agriculture on board, they gave concessions on biofuels.
To
bring coal-burning utilities, oil refineries, automakers and
manufacturing industries on board, they cut the auctioned emissions
trading allowances from 100% to 15% and gave 85% away free, making the
cost of cap™ in its early years affordable enough so the businesses’
leaders believed it would not compromise their ability to compete China
and India.
To bring coal on board, they provided big funding
for the development of “clean” coal and – probably not coincidentally –
a large number of coal mining operations were greenlighted by the
Environmental Protection Administration (EPA) during May and early June.
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Many
big business leaders bought in. Nike Inc., Starbucks Corp., Exelon
Corp., Symantec Corp. and PG&E Corp. as well as the huge
multinational corporations in the U.S. Climate Action Partnership (US
CAP) like Alcoa, Caterpillar, Conoco Phillips, General Electric, Rio
Tinto and Shell called for an RES and cap&trade. Environmentalists
like The Center for American Progress, Sierra Club, the Environmental
Defense Fund and the Natural Resources Defense Council also accepted
the deal, as did New Energy industry adovcacy groups like the American
Wind Energy Association and the Solar Energy Industries Association.
Opponents
of H.R. 2454 included the U.S. Chamber of Commerce and the American
Petroleum Institute as well as Greenpeace, Friends of the Earth and
most of the anti-coal activists leading the movement to stop coal
burning and mountaintop removal coal mining. One of the many historic
aspects to the legislation was that it brought together the American
Petroleum Institute and Greenpeace.
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Al
Gore championed H.R. 2454 in a high profile appearance before Waxman’s
committee and in behind-the-scenes phone persuasion with fence-sitting
House members in the days leading up to the historic vote. James
Hanson, the NASA climate scientist Gore made famous when he brought him
to Washington in 1989 to testify to a Senate committee and become the
prophet of climate change, staunchly opposed the bill. Hanson was
arrested protesting mountaintop removal coal mining the day before the
bill was passed.
The struggle to turn the H.R. 2454’s proposals
into a first-ever U.S. New Energy standard and a landmark,
game-changing U.S. mandatory GhG cap™ system did not end with the House
vote. ACESA's provisions only become law if the Senate approves them
and the accompanying measures in its own bill and if a House and Senate
conference committee can reach accommodation over whatever differences
there might be in their bills.
In other words, look for more compromising.
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COMMENTARY
Putting
a price on GhG generation has been the Holy Grail of New Energy since
the fight began in earnest in the 1970s. Solar, wind and geothermal
energies got a foothold when the price of oil and natural gas rose due
to the Arab oil embargoes and other international tensions. The New
Energies had a chance at getting a significant place in the U.S. energy
mix until the Reagan administration cut off funding to New Energy
R&D in the early 1980s.
Breakthroughs nevertheless came,
albeit slowly. By the end of the 1980s, wind turbines had become more
efficient and solar power plant technology had emerged. But the price
of oil went down to $10 per barrel in the 1990s and the price of
natural gas followed. New Energy could not compete but, with an
incipient awareness of global climate change giving it far more
credence, producers renewed the 1970s pioneers’ message: If the fossil
fuel industries paid for the harms they do to health and the
environment, they would be much more expensive, expensive enough to
make the nearly consequenceless New Energies into a great bargain.
Now,
in 2009, Democratic leaders have compromised audaciously to get ACESA
through the House of Representatives and put a price on emissions. In
the greatest test of her leadership she has yet faced, Speaker of the
House Nancy Pelosi (D-Calif) promised she would get it done by the July
4th recess and she did.
Pricing
emissions will raise fossil fuel costs but revenues from the auction of
permits will be used to compensate ratepayers and overall energy costs
will go up little. (click to enlarge)
Opponents question the
real importance of this historic accomplishement. Does it have anything
more than marquee value? An EPA analysis showed H.R. 2454 might not
significantly alter U.S. oil imports. A Union of Concerned Scientists
study showed there might be more New Energy without the weakened RES in
the bill than with it.
Still, ACESA takes U.S. energy policy
into new frontiers. It institutes a New Energy standard and a cap™
system despite the incredible recalcitrance of House conservatives and
the enormous lobbying monies spent on behalf of vested interests.
Activists would have liked to see the Democratic leaders call the bluff
of the conservatives by putting stronger measures in their bill but it
is hard to believe veterans like Pelosi, Waxman and Markey would leave
anything on the table that it was possible to take in the final pot.
In
the wake of the House's passage of the Waxman-Markey bill, hailed by
those with long memories as a landmark accomplishment, Progressive
Representative Dennnis Kucinich (D-Ohio) published an op-ed explaining
why he was against the legislation. He detailed the giveaways to coal
and nuclear, the weakness of the New Energy standard and the
potentially corruptible complexities of cap&trade.
Kucinich
was quite right in almost every point he made. If the majority of his
Democratic colleagues had agreed with him, there would be no energy and
climate legislation on its way to the Senate. Maybe that's good and
maybe that's bad, but that's certainly politics. Waxman, Markey, Pelosi
and the President did what was possible.
In the fall, Senate
Majority Leader Harry Reid (D-Nev) and Senate Chair of the Energy and
Natural Resources Committee Jeff Bingaman (D-NM) will try to carry the
ball further down the field. If Senators Reid and Bingaman are
successful against the power of the filibuster weilded by the
recalcitrant conservatives in the Senate, U.S. energy policy will never
be the same. Mr. Kucinich, whose seat in Congress is secure, can come
back next year and see if it is possible to make U.S. energy policy
even better.
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QUOTES
-
Henry A. Waxman (D-Calif), Chair, House Energy and Commerce Committee:
"[The President] realized [in March] that this was a very tough bill to
get through…"
- Elaine Kamarck, Harvard/Kennedy School of
Government, former advisor to Al Gore: "There's a point at which you've
got to ask yourself, what are we doing here? What's the point?"
-
Emily Figdor, federal global warming policy director, Environment
America: "We think there's a lot of problems in the bill…[but] we need
to take that first step. We're so long overdue."
- Edward J.
Markey (D-Mass.), Chair, House Energy Subcommittee: "[If it becomes
law] we will have fundamentally changed our relationship with energy
and how it's generated in this country.. There is a new political
recombinant DNA…working with business and consumer interests to create
a pathway that works for both. This bill demonstrates that."
The
compromises rendered the final proposal as weak as the weakest of those
studied by NREL. But is it stronger than no action? (click to enlarge)
-
Waxman: "That was an essential compromise…It would be very disruptive
to the economy had we not recognized that certain regions of the
country were heavily dependent on coal."
- Representative Melissa
Bean (D-Illinois), a “yes vote on the bill: "Many of the folks who are
supporting the bill now from the private sector, that I know, said they
didn't think they'd be here today…And they're surprised at . . . how
their concerns were listened to."
- Dan Weiss, environmental advocate, Center for American Progress: "They know what price the political market will bear…"
-
Greenpeace: "[Waxman-Markey is] a victory for coal industry lobbyists,
oil industry lobbyists, agriculture industry lobbyists, steel and
cement industry lobbyists."
- Carol Browner, director, White House
Office of Energy and Climate Change: "It's a strong bill…It's a good
bill. And it happened because everyone was able to keep their eyes on
the prize while still making some concessions."
posted by Herman K. Trabish
Climate
bill shaped by compromise; Facing a mood unfriendly to sweeping changes
in energy policy, House Democratic leaders and Obama had one thing that
made interest groups more receptive: They were willing to negotiate.
Jim Tankersley, June 28, 2009 (LA Times)
and
Dennis Kucinich Lays Out Why He Voted Against Clean Energy Act
June 27, 2009 (The Cleveland Leader)
