Thursday, December 10, 2009

New "Tri-Partisan" Climate Framework Aims to Clear High Senate Hurdle

Originally at the Breakthrough Institute

Promising "we can and will pass climate change and energy independence legislation this Congress," Senators John Kerry (D-MA), Lindsey Graham (R-SC) and Joseph Lieberman (I-CT) unveiled a new framework intended to form the core of a "compromise" climate and energy bill capable of clearing the 60-vote hurdle needed to secure passage.

The framework aims to cut U.S. emissions of greenhouse gases by 17% below 2005 levels in the "near-term," by which the senators apparently mean the year 2020. The three senators brand such a target "achievable and reasonable" and also declare their support for "a long term target of approximately 80 percent below 2005 levels," presumably by 2050.

Los Tres Amigos in action

According to the five-page summary document circulated today on Capitol Hill and published online by EnviroKnow.com, the "tripartisan" framework is meant to "build upon the significant work already completed in Congress" -- a nod to climate and energy bills already crafted by the Senate Committees on Energy and Natural Resources and Environment and Public Works earlier this year as well as the House's Waxman-Markey climate bill, narrowly passed in June.

Details of the new proposal are still scant, in an apparent nod to several Senate committee chairs -- and the numerous swing votes -- who will no doubt shape the final legislation.

Sen. Liberman told reporters today "there are well over 60 votes in play in the Senate, not that we have 60 votes yet." He'll have a steep hill to climb by all accounts.

Will details still vague, we can only get a sense of where the new Kerry-Graham-Lieberman framework is headed, but here's a run-down of notable passages...

The policy is framed around "better jobs [and] cleaner air," with an effort to center the rhetoric around clean energy job creation and pollution reduction, with the latter appearing to be a deliberate effort to blur the boundaries between greenhouse gases and traditional air pollutants. Both economic concerns and traditional environmental pollutants routinely rank as more salient to voters than concern for climate change.

While greenhouse gas emissions reductions have moved out of the rhetoric, they remain squarely at the heart of the policy framework, however, which like all other major Congressional climate proposals, centers around a cap and trade program that aims to limit the output of global warming pollution.

Here's how the three senators summarize their framework:

Our legislation will contain comprehensive pollution reduction targets that are both environmentally significant and achievable. It is our belief that a market-based system [aka cap and trade], rather than a labyrinth of command-and-control regulations, will allow us to reduce pollution economically and avoid the worst impacts of global climate change. It will also provide significant transition assistance to companies and consumers without using taxpayer dollars or driving up the national debt. We believe a near term pollution reduction target in the range of 17 percent below 2005 emissions levels is achievable and reasonable, as is a long term target of approximately 80 percent below 2005 levels. Finally, we believe a robust investment in the development and deployment of clean energy technologies will ensure that as pollution reduction targets become more rigorous, companies will be better equipped to meet their obligations in a cost effective manner. [emph. added]
The senators will have our agreement on that last part of course. But we'll have to wait and see how central a role Kerry, Graham and Lieberman envision for the direct public investments necessary to accelerate the development and deployment of clean technologies and the innovation necessary to make clean energy cheap. If public investment in clean technology and innovation plays the same tertiary role it does in the House-passed Waxman-Markey bill or the Senate EPW Committee's "Clean Energy Jobs and American Power Act" (also partly crafted by Senator Kerry), America will be hard pressed to meet the climate and energy objectives the senators outline above.

The framework provides little detail as to how the senators hope to drive the development and deployment of a suite of improved clean technologies, beyond nods to both nuclear power and carbon capture and storage for coal.

More robust support for nuclear power is central to the new framework and a core priority for Sen. Graham. Support to re-start the U.S. nuclear industry is also considered critical to wooing other key fence-sitters, including a handful of Sen. Graham's potentially interested Republican colleagues. Here's the relevant passage, which, as I read it, seems to mirror many of the policy "asks" outlined by the Nuclear Energy Institute:
Encouraging nuclear power. Additional nuclear power is an essential component of our strategy to reduce greenhouse gas emissions. We strongly support incentives for renewable energy sources such as wind and solar, but successful legislation must also recognize the important role for clean nuclear power in our low-emissions future. America has lost its nuclear technology manufacturing base, and we must rebuild it in order to compete in the global marketplace. Our legislation will encourage the construction of new nuclear power plants and provide funding to train the next generation of nuclear workers. We will make it easier to finance the construction of new nuclear power plants and improve the efficiency of the licensing process for traditional as well as small modular reactors, while fully respecting safety and environmental concerns. In addition, we support the research and development of new, safe ways to minimize nuclear waste. We are working with our colleagues to create incentives for low-carbon power sources, including nuclear, that will complement the Energy and Natural Resource Committee's work to incentivize renewable electricity.
On "ensuring a future for coal," they write:
Coal's future as part of the energy mix is inseparable from the passage of comprehensive climate change and energy legislation. We will commit significant resources to the rapid development and deployment of clean coal technology, and dedicated support for early deployment of carbon capture and sequestration.
These two passages should be no surprise. In the October NY Times op ed announcing their bi-partisan effort to craft a new climate framework, Senators Kerry and Graham wrote that they intended to restart America's stalled nuclear industry and help "America... become the Saudi Arabia of clean coal."

On manufacturing, a touchstone issue for many swing Senators, including a bloc of increasingly well-organized Senate Democrats frequently led by Senators Sherrod Brown of Ohio and Debbie Stabenow of Michigan, the framework states:
Manufacturing is the backbone of our nation's economy, and we refuse to believe that the days of American leadership are behind us. Despite some initial success stories, such as North Dakota's 30 percent growth in clean energy jobs in the last decade, the United States is falling behind. Successful climate legislation will not send existing jobs overseas. Rather, pricing carbon will drive innovation - creating new opportunities for those who develop clean energy technologies, as well as those who build, install, and maintain them. We plan to provide significant assistance to manufacturers to avoid carbon leakage and ensure the continued competitiveness of American-made goods. Our legislation will also provide financial incentives to both large and small manufacturers to improve the efficiency of their processes, which will mean even more new jobs. In addition to employing thousands in the building trades, our envisioned development of nuclear and wind power will also mean jobs and growth for our steel industry. It is time to regain our leadership and create the jobs of the future here in America.
It doesn't appear that Kerry, Graham and Lieberman plan any significant direct support for U.S. clean energy manufacturing capacity, as most of this language seems to focus simply on transition assistance for today's manufacturing base (most likely free allowances and help cutting energy use in manufacturing). While it's clearly important to protect the manufacturing jobs of today, if the Senators rely on "pricing carbon" alone to "drive innovation," we'll see little of those "jobs of the future" appear in America's manufacturing heartland.

Without robust, direct support, America's manufacturers will be hard pressed to compete with the massive direct investments provided by the governments of Asia's "rising clean tech tigers" to aid their domestic clean energy manufacturers. China alone is poised to invest nearly $400 billion in the nation's clean energy technologies and industries over the next five years, with a particular emphasis on the nation's rapidly growing clean energy manufacturing base.

As we make very clear in our recent report, "Rising Tigers," the U.S. will need a significantly more robust clean energy economy strategy to compete with aggressive Asian (and European) competitors. Pricing carbon, quite simply, is not enough. We'll see what Senators Brown and Stabenow think of this framework...

On offsets (and how there will be lots of them, of course), the framework states:
While we are still discussing the details of the offset program with our colleagues, we have reached agreement that we will include significant amounts of real, monitored and verified domestic and international offsets and other incentives in our system in order to contain costs and create opportunities for farmers, ranchers and forest owners to benefit from climate change legislation.
Finally, on an international climate agreement and protecting American competitiveness, the framework states:
Ultimately, climate change must be addressed through a strong international agreement that includes real, measurable, reportable, verifiable and enforceable actions by all nations. American leadership is essential, but action by the developing world is necessary to maximize the benefits of our effort. ... [W]e will include strong measures that are compatible with our obligations under the World Trade Organization to prevent our economic competitors from exploiting the American market if they shirk their responsibility to minimize carbon pollution.
This language mirrors a recent letter from nine swing Senate Democrats released last week demanding similar provisions in any final Senate climate bill.

That last statement appears to opens the door for carbon border tariffs, which will all-but-certianly prove critical to securing the support of key swing Senators, but simultaneously place the U.S. in the middle of an international climate conundrum.

Major developing nations, including China, India, Brazil and South Africa, have vehemently opposed using climate change as a pretext for restricting international trade, and in international climate negotiations now underway in Copenhagen, Denmark, have remained insistent that their pledges to reduce their output of greenhouse gases are strictly non-binding in an international context.

Despite the clear hurdles ahead, the three senators conclude by declaring:
We intend to continue to engage our Senate colleagues in the weeks ahead to develop sensible, effective climate change legislation that will create jobs, ensure our energy independence, restore America to a position of leadership in the clean energy economy and reduce pollution. ... Together, we can and will pass climate change and energy independence legislation this Congress.

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