Kerry-Lieberman: Thoughts

Posted: Dec 15, 2019

Senator Graham pulled out, so it is no longer a tri-partisan effort, more like a Frankenstein of good intentions and unrealized ambitions. What was supposed to be comprehensive climate change legislation for the U.S. has turned into a joke. I mean, come on, the new Kerry-Lieberman climate change bill (The American Power Act) has provisions for expanding off-shore oil drilling. Really? I don’t know much about politics but even I can tell that will go over like a lead balloon in the Senate. With a BP rig in the Gulf of Mexico hemorrhaging 5000 barrels of oil a day, politicians want to include offshore oil drilling in a climate change bill. Really? And that begs the question as to why incentives for offshore oil drilling are in a climate change bill in the first place. Aren’t we supposed to find ways to wean ourselves off the teat of fossil fuels and carbon dependence? Also, Senator Graham cites the importance of the immigration debate as another reason for his withdrawal. All of this highlights the shortsightedness of American policy makers. Understandably, climate change deals in timelines that are more expansive than a single election cycle, or even the life of a single politician, but these are problems that need to be addressed now. We think the immigration debate is at a fever pitch right now, just wait until millions (if not billions) are displaced by rising tides and natural disasters. Climate change refugees on a global scale will make Arizona border jumping look like child’s play. I think that Senator Graham saw the writing on the wall and wanted his name off of this bill of concessions.

I am not saying that America needs its own private Kyoto, not even close. What it does need is an honest effort to address the problem. A problem that is not just America’s. We are starting to become the laughing stock of the world. And why not, I ask? When Fox News leads off its Earth Day coverage with the headline that insinuated that climate change was a hoax. There is no denying that climate change is upon us and that it is anthropogenic. Now the issue needs to be how to stop it. How to stop sea level rise, how to stop increasing storm intensity, how to stop ocean acidification, how to stop loss of biodiversity. The problem lies in the time horizon. A popular adage in the environmental community is that a good economy breeds green, and guess what… we are far from a good economy. Our focus now is on cheap energy, finding jobs, and immigration. We can’t even be bothered with fixing the mess BP has created in the Gulf. I am not saying we are approaching another era of flaming rivers, Love Canals and Silent Springs… I am saying that it could be worse.

Kerry-Lieberman claims to be THE comprehensive climate change bill, and they released it without Senator Graham. While this can be viewed as an act of defiance, it isn’t. It seems to be the fastest way to kill the bill. The target is 60 votes. That is not going to happen with a key Republican backing out of his own bill. What kind of message does that send? It sends the message that America has other concerns. Immigration. That America doesn’t want to play ball with the rest of the world. Byrd-Hagel. That America likes its oil.

Other stumbling blocks (besides the offshore provision that would essentially give states a 37.5% share in the revenues from drilling in Federal waters) in the Act are nuclear power, offsets, and allowance allocation. The problem with nuclear is that Kerry-Lieberman is for it, but not in a smart way. The Act has provisions that would expedite the permitting and construction of new nuclear plants. This is both dangerous and necessary. The last nuclear power plant built went online in 1996 and there have been no new orders for plants since the 1970s. This is a problem. Some European nations, such as France, are almost 80% nuclear. The Act also calls for billions in loan guarantees to build new plants. This is a problem because we still have no place to store the waste. Yucca Mountain is out—Harry Reid has made sure of that. So now we are looking at on-site storage and that is toxic for politicians. No one wants a potential nuclear accident in their state even if it means cheap, clean power.

Another problem is the offsets. If there is one adage in American environmental politics, it is don’t mess with agriculture. Kerry-Lieberman is yet another example of agriculture getting its way. It gets the offsets. To put a finer point on it, the USDA gets oversight over all offset crediting from agriculture and forestry. Also, the cap for offsets is set at 2 billion tons of carbon per year, which is way too high. Offsets are essential for a cap and trade system to work effectively and efficiently. They allow flexibility and allow covered entities to come into compliance in the cheapest manner possible- either clean up your act or pay for offsets. Simple. Except for the fact that these offsets can lack environmental integrity and to allow so many in could bust the cap and lead to no real reductions in CO2 levels. If the offsets come from projects that generate no reduction in carbon emissions, the integrity of the cap will be compromised. Kyoto has struggled with this, as has the European Union-Emission Trading System. It seems like we are next.

The last problem is that only 25% of allowances are to be auctioned. Ideally, 100% of allowances should be auctioned to send a proper price signals as to the true value of carbon in the market. As it is designed, the government gets to pick winners (utilities and heavy manufacturers). While this amounts to windfall profits to utilities, they are to pass on the benefits to consumers. This is a problem because it creates a perverse incentive for consumer to keep consuming. The goal seems to be cheap power, not clean power.

There are problems. Lots of them. Some that could be worked out in committee, others that might sound the death knell of the Act in its entirety. However, this should not mean that America isn’t ready for energy reform. We are. Past due, actually. Changes must be made and this is a notable step in the right direction, it just seems that something has gotten lost in translation. While there are aspects of the bill that are not ideal, I understand that politics is like sausage making. What you want is the end product, you don’t want to know how it’s made. Kerry-Lieberman may be like that. Lets see what we get when it gets out of committee. Hold your breath (just because soon you wont be able to breathe the air).

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