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Cap and Less Crap

The mammoth cap and trade, Waxman-Markey (ACES) bill has stalled for now in the Senate due to attention being paid to passing a health care bill and due to all the complexity and uncertaintity built into the bill in the House. Earlier this month, a vote on the bill was delayed for up to a month due to a perceived lack of support. The bill ballooned from 600 pages to nearly 1,500 pages in the House, mainly from adding subsidies and protections for large polluters. It barely escaped the House on a 219-212 vote.

So, how about this? Senator Maria Cantwell (D-WA) is shopping around a much smaller climate bill that can be understood by everyone. The 32-page bill is being called the Carbon Limits and Energy for America’s Renewal (CLEAR) Act. CLEAR is a reworking of a cap and dividend bill that was introduced in the House in April by Chris Van Hollen (D-MD). At only 20 pages, that bill floundered under the attention paid to the ACES bill as ACES became a generous give-away for energy producers.

The Cantwell/Van Hollen approach promises “simplicity, transparency and equity“. The basic idea is simplicity itself. CLEAR focuses on limiting carbon inputs rather than the much more complex ACES approach to regulating each emission source. By shifting to sources of carbon where it enters the economy at the wellhead, mine or port, CLEAR would only have to deal with a few thousand firms rather than the hundreds of thousands covered by Waxman-Markey making regulation much simpler and more transparent.

The focus of both approaches is to set a value on carbon emissions and progressively “cap” or limit emissions. Polluters would buy “carbon credits” to allow them to spew a certain amount of CO2 into the sky. Due to provisions written by energy lobbyists into ACES, polluters would be given 85% of the initial credits for free, making them virtually worthless to the American public. It would also create a hugely complex and profitable system of carbon-credit trading that has Wall Street drooling. Waxman-Markey politely asks polluters who receive the free credits to use those benefits to limit price hikes. Yeah, like that’s going to happen…

from capanddividend.org

from capanddividend.org

Under CLEAR, carbon credit trading would be more limited although still allowed. There would be frequent, smaller credit auctions and the credits would expire after two years to prevent hoarding. All carbon transaction data would be publicly available under CLEAR. Benefits of the carbon auctions would go directly to the American public rather than to the polluters or carbon traders. 75% of the auction proceeds would be distributed to legal U.S. residents on a per capita basis. The remaining 25% would go into a permanent fund to support clean energy development, displaced worker compensation and climate-change mitigation. CLEAR provides an incentive for the public to reduce their carbon footprint. The less energy they use, the higher will be their income from the fund. Also, as the price of carbon goes up, so does the amount dispersed by the fund to you. By distributing the credits for free, Waxman-Markey assumes that large corporations have a right to pollute at certain levels. CLEAR takes an opposite stance, assuming that the public has a right to limit pollution. Another dandy provision of Waxman-Markey would be to ban EPA from regulating greenhouse-gas emissions under the Clean Air Act. Wonder who wrote that provision? CLEAR has no such ban. Waxman-Markey provides billions of dollars to industry to subsidize the pie-in-the-sky idea of carbon sequestration. CLEAR has no such provision.

The CLEAR bill is a bit weak on greenhouse-gas emission standards in the early stages and does not dedicate money directly to clean energy development, but those are small things that can be strengthened when the bill is introduced. At 32-pages, it is simple and concise. It achieves the main objectives of the best of the clean energy bills without enriching polluters and Wall Street speculators. It will cost far less to administer and will create far less confusion and obfuscation. The Cap and Dividend idea has been supported by Scientific American,  the Montana Environmental Information Center, by Ken Toole, vice-chairman of the Montana Public Service Commission and by many environmental organizations. Waxman-Markey will surely explode to over 2,000 pages as the Senate adds more industry give-aways. Please encourage Senator Cantwell and your legislators to at least take a look at this bill as a much simpler way to achieve reasonable climate-change goals.

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