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What New Coal Plants?

2011-12-12T10:00:00Z

Dave Hawkins, Director of Climate Programs, Washington, D.C.

As EPA prepares the first-ever national standards for carbon pollution from new fossil fuel powerplants, the coal industry is embarking, predictably, on its latest dis-information campaign to try to block these desperately needed public health and climate safeguards. New coal plants are dirty, risky, and expensive. No wonder the smart money won't touch them.

Flacks for the coal lobby have their hair on fire about the rumored content of draft EPA standards that haven't even been released. They say the standards will kill new coal plants. Haven't they been paying attention? No one wants to build new coal plants. Except for a handful already underway, no more are planned for the foreseeable future. We don’t know what the EPA draft standards say but we should all be asking a simple question. Exactly why should EPA write a standard that is gerrymandered to make room for dirty powerplants that the private sector does not want to build?

Let’s look at the facts. Starting about ten years ago, there were waves of announcements for scores of new coal plants. In all, nearly 200 coal plants were proposed. Now only a handful of these projects are technically alive and they are on life support. A small number of proposed plants have permits but like many previous plants with such permits, most if not all of these proposals will turn out to be vaporware. A permit may get a developer a meeting with project financiers but it will not get their money. The finance community understands new coal plants are simply not economic, given the alternatives that are available.

Other than a few plants under construction there is virtually no prospect of new conventional coal plants being built in the next quarter century according to the Energy Information Administration. EIA reports no new conventional coal plants coming online after 2012 and only two gigawatts (GW) of coal plants with carbon capture and sequestration coming online around 2017; then nothing more through 2035, the end of the EIA forecast period.

Are the rumored new EPA CO2 standards responsible for the collapse of the new coal plant boom? No. Market forces have rejected new coal plants. Abundant supplies of natural gas have produced lower prices for that fuel and those low prices seem here to stay. Materials costs have risen substantially and that makes capital-intensive coal plants a bad bet. Energy efficiency is increasingly recognized as the smartest way to balance power supply and demand and is enabling economic growth with lower electricity demand. Cost reductions in renewable resources like wind and solar, along with supportive policies, have resulted in rapid growth of these cleaner energy sources to meet new demand and replace retiring dirty coal plants.

The market is also penalizing proposals for new conventional coal plants due to their very high CO2 emissions. Financiers know that denying the fact of global warming will not make it go away. So a project with high CO2 emissions has a large built-in financial risk that only grows over time. And that risk is unbounded, since without a clear policy roadmap it is impossible to make a reliable estimate of what it will cost to mitigate a conventional coal plant’s high CO2 emissions.

The long lead time for coal plants underscores the conclusion that these projects are bad bets. It takes about ten years to build a coal plant from initial conception to start-up. Then it takes another 15-25 years for investors to get their money back. Even without low gas prices, investors would have to believe that no action to address CO2 pollution will be taken over the next quarter century for them to put their money at risk in new conventional coal plants. This is not a risk that sensible investors are willing to take. So it should be no surprise that plans for new coal plants have been abandoned right and left in the United States.

As for a new EPA standard for CO2, we won’t know what it says until early next year according to EPA Administrator Lisa Jackson. But let’s assume EPA were to propose a fuel-neutral standard for new fossil plants; one that could be met by new natural gas combined cycle plants or by new coal plants with carbon capture and storage (CCS). Such a standard would not prevent the construction of new coal plants (if and when the private sector decides such plants are a better option than alternatives). No, such a standard would just provide a level playing field for the two leading fossil fuels in the power sector: coal and natural gas. (Such a standard would not create a truly level playing field for electric resource investments since it would still heavily favor fossil fuels over zero-emitting options like efficiency, renewables, or nuclear if the latter’s many problems could be solved.)

Such a fuel-neutral CO2 standard would permit a new coal plant designed to capture about 60% of its CO2 to be built. The coal lobby will complain about the cost of CCS but that cost will never get lower if standards are rigged to ensure no new coal plants will ever have to employ CCS. Why spend money to improve a technology for which there is no market?

The bottom line is that it is not the cost of CCS that is blocking new coal plants today; it is the cost and risks of plain old dirty coal plants compared to the alternatives that are shelving these proposals.

Of course, no one should be surprised that the coal lobby thinks that a level playing field standard is the policy equivalent of the swine flu. But should we build new power plants in order to prop up the coal industry? We want new power resources, not to help burn more coal, but to provide heat, light, comfort, convenience and to do so reliably and in a manner that does not send our kids to the emergency room with asthma attacks, our parents to an early death, or condemn our grandchildren to a planet with a climate so disrupted that their lives will be an unending torment.

Despite the coal lobby’s rhetoric, building new conventional coal plants is a bad economic bet for society as well as for individual investors. Even in countries where building a new coal plant appears to be cheaper than investing in cleaner energy, the International Energy Agency reports that going down such a path will produce huge net economic losses. IEA reports that for every dollar “saved” by investing in a dirtier power plant before 2020, countries will wind up spending more than four dollars after 2020 to overcome the impact of those dirty investments.

So let’s have the debate. The market has walked away from conventional coal plants. Should EPA try to hold back the tide of market forces? Should EPA set CO2 standards for new power plants that are twisted to make the coal industry happy? Or should EPA follow the law and good policy and set standards that provide a level playing field for coal and natural gas and avoid locking us into another round of new multi-billion dollar old coal technology that will cost us more and damage our health and the only climate we have?

Scott Brown's Attack on the Truth

2011-05-05T18:26:21Z

Dave Hawkins, Director of Climate Programs, Washington, D.C.

I haven’t met Massachusetts Senator Scott Brown and I am sure he is a nice man but he is definitely on the wrong track in attacking EPA and now the League of Women Voters. Back in April, Senator Brown voted for an extreme measure that would have put Congress, for the first time in the forty year history of the Clean Air Act, on record as forbidding EPA to regulate a pollutant that the agency had found posed a clear threat to public health and welfare. Just as egregious, the amendment Senator Brown supported put elected politicians in the position of repealing a scientific finding of harm made by government scientists. And EPA’s scientific conclusion was not some whim of appointed officials; it was based on peer-reviewed scientific publications and scrutinized in a thorough public comment process.

That’s right; the amendment he voted for tried to repeal a scientific finding. Did you know Senators were so powerful that they could repeal facts? If they get on a roll perhaps Senator Brown and his like-minded colleagues will attempt to repeal the conclusion that cigarettes cause cancer. This is so much easier than actually coming up with solutions to facts they don’t like, isn’t it?

Now the Senator has taken aim at the League of Women Voters for calling attention in a TV ad to Senator Brown’s indefensible vote. In an op-ed in the Boston Herald Senator Brown attacks the League as misrepresenting his vote, engaging in “demagoguery,” and going “into the gutter.” What a shame that the Senator has resorted to one of the oldest tricks in the book: when the facts are not on your side, attack the messenger.

Perhaps Senator Brown is unaware of the League’s role as a defender of the Clean Air Act. The facts are that the League has a long and distinguished record of helping to inform the public about the importance of the Clean Air Act and shining a light on polluter proposals to weaken that Act over the years. For more than three decades I have been privileged to work with the League as it has carried out this work that is so important to American families. The League was a charter member of the National Clean Air Coalition since the 1970’s and has helped educate families since then about the importance of letting elected officials know how vital the Clean Air Act is to their health.

As to Senator Brown’s justification for his dirty air vote, it is thin gruel indeed. He claims his vote was to prevent “giving unelected and unaccountable agencies like EPA the power to bypass Congress.” With all due respect to the Senator, that is nonsense.

The Clean Air Act signed into law by President Nixon was written by Congress and as the Supreme Court has held, that law laid out the authority for EPA to act to control harmful pollutants like carbon dioxide. Ironically, the case is called Massachusetts v. EPA, because, the very Commonwealth that Senator Brown is supposed to represent went to court to protect its citizens by requiring EPA to curtail that pollution, consistent with the law. Following that decision, EPA, under the direction of President George W. Bush, undertook a thorough inquiry into the scope of the threat caused by carbon dioxide and other “greenhouse gas” pollutants. The results of that study were made available for public comment and EPA responded to all of those comments. Is that how Senator Brown describes “unaccountable”?

The truth is that EPA is acting under the letter and spirit of the law passed by Congress and is accountable for every step it takes in attempting to carry out that law. The larger truth is that setting sensible limits on these harmful pollutants will protect the families the League of Women Voters is educating about the issue and will do so without harm to our economy. Senator Brown should be joining the League in its effort to speak truth to dirty power, not attacking it for trying to clear the air.

A Vote to Remember

2011-03-30T11:28:31Z

Dave Hawkins, Director of Climate Programs, Washington, D.C.

Today the Senate is scheduled to vote on a handful of shameful amendments to the Clean Air Act. While the details differ, all these amendments have one thing in common – they aim to block or eliminate parts of the Act that would start the long-delayed process of rolling back the carbon pollution that will bring misery to millions through profound climate disruption.

Promoters of one of these retrograde bills, Senate Minority Leader Mitch McConnell (R-KY) and Senator James Inhofe (R-OK), are quoted in the trade press as saying the vote will put Senators on the record on this important issue. They are right but not in the way they think. Years from now, when historians review why it took our country so long to act to protect the climate on which our health, our economy, and security depends, this vote will figure in the telling of the story.

Nearly twenty years after ratifying a treaty that recognized the serious threat to human interests presented by climate disruption, the Senate considers, not how to get serious about combating that threat, but whether it should block action to cut pollution under existing law.

The Clean Air Act directs EPA to adopt sensible measures that will reduce waste and lead to adoption of modern, efficient technology in our businesses – actions that will make us more competitive in a world that takes protecting the climate seriously. But thanks to fear-mongers and professional liars, there is a mantra echoing in the halls of Congress that enforcing the Clean Air Act to cut carbon pollution will weaken the economy and cost jobs. So the smirking duo of Senators McConnell and Inhofe think they have found a way to discomfit their political rivals by spinning a vote to protect the climate as a vote against economic recovery and jobs.

The fact that this is nonsense ought to be enough for serious men and women to say so and to talk straight about what is really at stake – putting an end to our gambling with the stable climate on which our civilization depends. But today’s politics being what it is, a number of otherwise responsible Senators seem to be motivated by the fear that a lie with a megaphone is more powerful than the truth. Well, that does not have to be. It can happen only if these men and women choose to be cowed by the threats of the McConnell and Inhofe types.

Students of history today examine the landmark Senate vote on the 1964 Civil Rights Act and still wonder how so many Senators could have put themselves so clearly on the wrong side of history by voting against that step to make America great. Today’s vote will not have the same immediate impact on the lives of millions as that 1964 Act did but every day we falter in acting to protect our climate is a day of additional, avoidable suffering that we will inflict on the innocent who do not possess political power today. A vote for any of today’s anti-Clean Air Act amendments is a vote against those innocents.

So yes, Senators McConnell and Inhofe, this vote will put you and others on the record. The claims of economic harm that some will use to justify their votes will soon be consigned to the rubbish heap as the trash all such earlier claims have been shown to be. But the mark that will not be erased from each Senator’s record as he or she recounts their service to their grandchildren in years to come is did they vote to move America forward or did they put themselves on the wrong side of history.

Clean Air Act Phobia

2011-03-18T00:35:54Z

Dave Hawkins, Director of Climate Programs, Washington, D.C.

It’s a sad state of affairs when members on both sides of the aisle in Congress seem to think it is a good idea to attack the Clean Air Act – the landmark law that Richard Nixon signed and George H. W. Bush strengthened. Yet the hits on the Clean Air Act just keep on coming in this Congress in spite of the Act’s incredible record of cutting deaths and illness caused by air pollution – a record that has earned the strong support of the American people and the admiration of others around the world.

Clean Air Act phobia appears to be a strangely contagious disease that keeps showing up in members’ pronouncements and draft bills – a disease impervious to information and common sense. Among the current symptoms of this disease are the attacks on the Act’s provisions that would require some of the world’s largest pollution sources to apply sensible methods to cut the amount of global warming pollution they dump into our atmosphere – the one atmosphere earth has – every year.

Over the past month or so, I and my colleagues have alerted readers to the latest attacks on the Act (here, here, here, and here, to provide just a few examples). The new attacks this week have been happening in the Senate: starting with Senator McConnell’s amendment to add a poison pill to an unrelated small business bill and joined by Senator Rockefeller with his own version the next day.

The latest development comes from Senator Max Baucus of Montana. The trade press reports (subscription required) that the purpose of his amendment is to codify EPA’s rule that exempts small pollution sources from certain Clean Air Act permitting rules. If the Baucus amendment did only that, there is a good case that Congressional action would make sense. But, whether intended by Senator Baucus or not, his amendment contains two very damaging provisions that go far beyond codifying the tailoring rule.

First, the amendment would permanently prohibit EPA from looking at global warming emissions due to changes in land use (like cutting down a mature forest or releasing huge amounts of carbon from soils) when calculating how much global warming pollution would result from a new industrial project. The scientific literature demonstrates that if not produced correctly, biomass energy can increase global warming pollution, not reduce it. In essence, this provision in the Baucus amendment would require EPA to lie to the public about the true global warming impacts of projects like a new power plant that burns trees for fuel.

Putting blinders like this on EPA would create large perverse incentives to pursue damaging projects, knowing that the cop had been ordered to look the other way. The provision would interfere with good biomass projects by preventing EPA from giving those projects credit for increasing the amount of carbon in soils and vegetation. Finally, the provision could prevent implementation of Congress’ renewable fuels standard by preventing accurate calculation of the emissions performance of biofuels. EPA has embarked on a lengthy process to develop scientifically robust methods of calculating emissions from biomass energy production and use. Gathering facts from interested parties and experts in an open, transparent process is the right way to address this issue.

Second, the Baucus amendment contains a provision that would permanently exempt even the very largest global warming pollution sources from the Act’s new source permitting requirements unless the source was also a very large source of other pollutants. While it makes sense to limit the new source program to large pollution sources, it would be a serious mistake to ignore the largest sources of global warming pollution just because they did a good job controlling other pollutants. Other provisions in the Baucus amendment assure that only very large sources of global warming pollution would be reviewed so this additional provision is unnecessary and harmful.

So I ask those in Congress who think that blocking the Clean Air Act’s global warming pollution programs is reasonable, to consider this. The damage from such bills would be inflicted on the truly unrepresented -- Americans and other people around the world. Letting polluters put their global warming wastes in the air today will harm our children and their children and their children’s children. Global warming pollution just doesn’t go away fast –half the carbon pollution we put in the air when our great-grandfathers fought World War I is still in the air today. And 1000 years from now, 15% of the pollution from those years will still be in the air. So Congressional attempts to block EPA from carrying out the Clean Air Act provisions to reduce carbon pollution are no minor missteps, easily remedied by a future Congress. No, these are actions that would condemn generations to the additional damage caused by pollution than can and must be avoided.

Dirty Air Extremism

2011-02-09T19:13:44Z

Dave Hawkins, Director of Climate Programs, Washington, D.C.

Barry Goldwater famously said, “extremism in the defense of liberty is no vice.” Maybe so, but extremism in the defense of fantasy is a tougher sell. Still, that doesn’t stop some members of Congress from trying.

Exhibit A this week is the attempt to legislate an alternate reality, offered up by Congressmen Fred Upton and Ed Whitfield with accompanying cheers from Senator Jim Inhofe. Their draft bill would eliminate Clean Air Act provisions that would allow US EPA to set common-sense standards to cut the pollution from large industrial polluters that causes climate disruption. Mr. Whitfield chaired a hearing on this bill today. (You can find my full statement on this bill here. The authors call their bill the “Energy Tax Prevention Act of 2011” but a better name would be the “Reality Prevention Act.”

The novel idea in this bill is that Congress can simply vote out of existence, scientific facts that a majority does not like. That’s what this bill would do. It would “repeal” (yes, the bill really says “repeal”) a scientific determination by the US EPA that carbon dioxide and other “greenhouse gas” pollutants are a threat to human health and welfare. Interesting concept: EPA scientists, after studying the work of thousands of other scientists, conclude that global warming pollution threatens our health and welfare. And Congress responds, “no it doesn’t and we have the votes to prove it!

Why didn’t we think of this before? All those threats in the real world that concern us? Let’s just vote them away.

Let’s vote that cigarettes do not contribute to lung cancer;
Let’s vote that lead and mercury are not brain poisons;
Let’s vote that diet and lack of exercise have nothing to do with being overweight;
Let’s vote there is no flu virus on the way (we can save all that spending on vaccines);
Let’s vote that the threat of terrorist attacks on America is over (hooray, no more airport pat-downs).

Gosh, voting away the science we don’t like is so much easier than actually thinking about these problems and deciding what to do about them.

“Ahh,” you may think, “wasn’t that EPA report just an Obama administration invention?” But you would be wrong. EPA’s study was actually the result of a Bush administration program, started in 2001, to study the science of climate change. Jump to 2007, when the Supreme Court told EPA to decide whether greenhouse gas pollution is a threat to public health and welfare and if it is, to do something about it using the tools in the Clean Air Act. So in May 2007 President George W. Bush directed EPA to respond. After nearly three years of work, including two rounds of public comment on draft reports, EPA concluded in December 2009 that the science does indeed demonstrate that carbon dioxide and other greenhouse gas pollution endanger public health and welfare. Following additional challenges to this final report, EPA published yet another voluminous report that responded to all those critiques. And all of these findings are now being reviewed by the courts.

But, maybe Congressmen Upton and Whitfield commissioned their own independent expert scientific review that shows EPA’s conclusions were flawed? Well, noooo….actually there is no contradictory independent report. The reality is that EPA’s conclusions are completely consistent with reports of other scientific studies in the US and around the world. But if you can create your own reality by voting it into being why waste all that time considering the facts?

Which brings me to the second novel aspect of this bill. As well as inventing their own science, the authors have invented their own version of the existing Clean Air Act rather than the real one that Congress enacted. You see, in addition to repealing EPA’s science decision, the bill also overturns the Supreme Court’s ruling that carbon dioxide is a pollutant under the Clean Air Act and it repeals all of EPA’s authority to limit this pollution (or to think about it any manner) in order to protect against climate disruption. The authors argue these extreme measures are needed because the current Clean Air Act gives EPA enormous power to do deep harm to the American economy. That’s where the authors’ second alternate reality comes in. In the real world, the existing Clean Air Act does not allow EPA to set rules that would create economic disruption.

There are three provisions of the Clean Air Act that EPA could use to cut carbon dioxide pollution and each one of them explicitly requires EPA to prove that any pollution standards it sets are technically feasible and economically reasonable. For example, last year EPA, working with automakers, set tailpipe standards for new vehicles. The Act allows EPA to set those standards only if EPA demonstrates there is available technology to meet the standards, considering the “cost, energy, and safety factors” associated with using the technology. (CAA, Sec. 202 for you budding lawyers)

Next, EPA has issued rules requiring large new pollution sources (as well as existing sources that are modified so pollution increases) to apply options that are technically feasible and affordable to reduce greenhouse gas pollution. This requirement has been in operation for other pollutants for over thirty years under a provision that, you guessed it, requires EPA or state agencies to determine, on a case-by-case basis, that any standard they set must be “achievable,” “taking into account energy, environmental, and economic impacts and other costs.” (CAA, Sec. 169)

Finally, EPA plans to adopt emission standards for coal, oil and gas power plants and for oil refineries (and maybe other large industrial sources in the future). As with EPA’s other authorities, the Clean Air Act limits what EPA is allowed to do: any emission standards it adopts under this part of the law must not only be technically achievable but the technology must be “adequately demonstrated,” “taking into consideration the cost of achieving such emission reduction, any nonair quality health and environmental impact and energy requirements.” (Sec. 111) (Yep, some inventive scribe actually stuck “nonair” into the Clean Air Act. Hey, English is a living language, right?)

So, while the imaginary Clean Air Act of the Upton-Whitfield-Inhofe world would allow EPA to run amok, the real Clean Air Act already does what they claim they want to do, which is to make sure that EPA is not able hurt the US economy as it requires polluters to clean up their act.

But maybe the Clean Air Act is like the old Soviet Constitution – looks good on paper but in the real world it sucks. Noooo…here too the real world puts the scare claims to rest. A peer-reviewed study comparing all the compliance costs imposed by Clean Air Act rules from 1970-1990, to the economic benefits produced by these rules in that period, concluded that benefits amounted to $22 trillion, while compliance costs were $525 billion – a 40-to-1 payoff ratio for the American economy. A later study for the period from 1990-2020 finds that updated Clean Air Act pollution-cutting standards will continue to deliver benefits far in excess of compliance costs.

All this would just be the stuff of dark humor if the stakes for real human beings were not so high. Climate disruption is a problem that can sneak up on you, especially if you hold beliefs that make you want to look the other way. Our best hope is that there are people of good judgment who can reach the politicians who believe that the threat is not real or that we can afford to wait even longer before acting. The basis for the Upton-Whitfield-Inhofe bill is fantasy but it would do huge damage in the real world if it ever became law.

40 Years of Clean Air Progress

2010-09-15T21:47:08Z

Dave Hawkins, Director of Climate Programs, Washington, D.C.

I attended the celebration of the 40th anniversary of the Clean Air Act at EPA yesterday.

It was a breath of fresh air (sorry) to hear so many speakers from industry as well as health groups and from across political divides to give concrete examples of how much good this landmark law has delivered for Americans. I arrived in Washington as a newly minted lawyer in 1970 and I have personally seen this progress happen.

In 1970 air pollution was recognized as a blight and a serious public health problem but aside from a handful of municipal ordinances and even fewer state programs, it was largely ignored.

The national pollution load was heavy.

In 1970, US sulfur oxides pollution was over 31 million tons per year. Now it is less than 11.5 million tons.

US hydrocarbon pollution was over 34 million tons per year. More than half of that from cars and trucks. Now it is less than 16 million tons.

Nitrogen oxides pollution was nearly 28 million tons per year. Now it is about 16 million tons.

Carbon monoxide pollution was over 200 million tons per year; nearly all from cars and trucks. Now it is less than 78 million tons.

These large cuts in pollution are all the more significant considering the fact that our economy grew so much from 1970 until now.

In 1970, US GDP was $3.8 trillion (2000 $). It is now $13.2 trillion, a 3.5 fold increase.

In 1970 there were 108 million vehicles on the road, driving about 1.2 trillion miles a year. In 2008 there were nearly 250 million vehicles on the road, driving 3 trillion miles a year.

In 1970, tailpipe controls were in their infancy. So much so that one car company met the government limit on pollutant concentration by adding an air pump to dilute its exhaust.

Back then, dilution as the solution to pollution was the preferred approach for SO2 at coal-fired power plants too. It took more than a decade to outlaw the practice of allowing power companies to build tall stacks instead of actually reducing emissions. Now SO2 scrubbers are in place at over half the nation’s coal plants. And if EPA is allowed to do its job, the remaining unscrubbed coal plants will either get controlled or shut down in the next handful of years.

In 1970 there were no controls on lead in gasoline. Thanks to the CAA lead is now banned here and countries around the world have followed our example

In 1970, the basic rule for preventing smog-forming hydrocarbon leaks from refineries was a requirement to paint storage tanks white, or floating roof tanks in some places. Today, that pollution from the chemical and refining industries has been cut in half.

There is no mystery about how this came about. Plain and simple, the Clean Air Act made it happen. The combination of programs for ambient air quality standards and emission performance standards made this cleanup occur. These two tools, complemented by the annual cap on SO2 emissions from the 1990 Act have proven their effectiveness. They work. They have made the air cleaner and have done it without hurting economic growth.

Without the Clean Air Act, EPA has recently estimated that today –

60 metro areas in the U.S. would have had higher total suspended particulate concentrations than Moscow
7 metropolitan areas would be worse than Bangkok
6 metropolitan areas would be worse than Bombay.

But the job is not finished. Pollution from power generation still shortens the lives of an estimated 13000 people per year and sickens many more. Many of our major cities still have air quality that is unhealthy. And of course, we have done nothing to address what might be called the mother of all pollutants, carbon dioxide.

As we see renewed claims from polluters that new EPA rules for the largest remaining pollution problems will cost jobs and raise energy prices, it is important to remember they said the same things about every rule EPA adopted in the past 40 years. They were wrong every time. Fortunately for all of us, past cleanup efforts went forward despite these claims. Let’s highlight these facts as we work to bolster EPA and state efforts today and secure continued support from Congress for this remarkable law.

Photo by Dorothea Lange, courtesy Library of Congress, Prints & Photographs Division, FSA-OWI Collection, LC-USZ62-70697 DLC.

CCS: a piece of the puzzle

2010-02-19T16:08:14Z

Dave Hawkins, Director of Climate Programs, Washington, D.C.

In his recent blog, David Sassoon calls President Obama's creation of a task force for a Carbon Capture and Storage Strategy a big victory for the coal industry. Let me offer a few thoughts on why I believe this task force actually is a step forward for all of us who want to put an end to investments in new polluting coal plants, increase our reliance on energy efficiency and renewable energy, and prevent disastrous climate disruption.

Our community uses several tactics to block new polluting coal plants. We intervene in permit proceedings and bring lawsuits to challenge coal plant permits. NRDC has actively used this tactic, joining the outstanding efforts by the Sierra Club and others. Another tactic, that NRDC also has pursued, is advocacy with Wall Street investors to convince them that investments in new polluting coal plants are a bad bet. A third is advocacy for performance standards that would make it legally impossible for new polluting coal plants to be built. NRDC worked hard to get such a law enacted in California and is seeking such standards in federal legislation. A fourth is to create a broad consensus that no new coal plant should be built unless it captures its carbon.

This last approach, which NRDC has pursued as well, is controversial in our community because it does not call for an absolute bar on new coal plants regardless of environmental performance and it lends legitimacy to carbon capture and storage (CCS) technology. I certainly understand the controversy--after all, if the coal industry seems to be supporting CCS, there is good reason to suspect something nefarious. And Mike Brune is right that the coal industry has a perfect record in speaking with a forked tongue on CCS--claiming that it is an essential technology, arguing that it is not ready, and then working to block any policy that would require it to be used. But the coal industry's duplicity should not keep us from assessing for ourselves whether CCS can help us stave off climate destruction and increase our use of cleaner energy.

As a community, we have achieved great success in blocking new coal plants one by one but we need a comprehensive coal policy as well. Showing CCS is an available tool helps us to convince policymakers that they should oppose construction of coal plants that do not capture their carbon. Is such a policy as attractive to many in our community as a law that says no more coal plants, period? No. But we need to ask ourselves -- what are the realistic odds of getting Congress or any significant coal-using state to adopt a "no new coal, period" policy in the next handful of years? I have fought the coal industry for 40 years and in my judgment the odds of a total ban on new coal plants are not large.

But we do have in our grasp the adoption of policies that will bar the construction of new coal plants unless the plant operates CCS. Securing the votes to get these policies enacted will require convincing some members of Congress that coal plants with CCS could in fact be built. I know that this is objectionable to many in our community but which is a better outcome: leaving the door open to building new coal plants with no CO2 controls at all or leaving it open only to coal plants with CCS?

Right now, the coal industry uses the claim that CCS is not ready as a weapon to fight mandatory CO2 requirements. Those of us who talk to members of Congress know that these claims are influential in far too many offices. The Obama CCS task force is a way to take that argument away from the coal industry.

Some in our community seem to fear that if we admit that CCS might become a tool in the climate protection toolbox that we will lose the battles to deploy truly clean resources like efficiency and renewables and to end atrocities like mountain-top removal (MTR). With respect, I think that view is a mistake. What CCS will do, in addition to cutting carbon pollution, is to internalize one cost of coal use that is currently ignored. That is a huge step forward in ending the distorted market that has allowed coal to dominate electricity production until now. A policy requiring new coal plants to use CCS dramatically improves the economic competitiveness of cleaner alternatives overnight. It is true that CCS will not stop MTR; neither will SO2 scrubbers, NOx controls, mercury controls, or baghouses. But that has never caused us to oppose those vital life-saving control measures in the past. To fight MTR we need to take it on directly, as many are doing brilliantly. NRDC is proud of its work to end this scourge and we won't stop until MTR is history. As NRDC’s President Frances Beinecke makes clear in her recent blog, supporting CCS does not mean condoning the damages that coal, as it is mined and used today, inflicts on us all.

CCS may also be an additional tool to cut carbon emissions from existing plants. We all want to use efficiency and renewables (and, more controversially, natural gas) to back out coal and carbon pollution from the more than 300GW of existing coal plants. But that won't happen without strong policies. The reality is that we have not yet made the sale with critical members of Congress that a coal-free energy system is feasible in the near term. However, we can make the sale that CCS can become a real option, with a serious effort and supporting policies. Our community should not be afraid of having an additional tool to go after emissions from existing coal plants. If CCS is shown to be feasible for existing coal plants it will become harder and harder for those plants to justify operating without it. That helps level the playing field for alternatives to coal.

Nor is CCS just about coal. CCS may also turn out to be something we need to get more rapid reductions in greenhouse gas pollution. We all know we should have started a serious climate protection program decades ago. Instead, our "leaders" have let carbon pollution build up at an accelerating rate with a lot more in the pipeline. Most of us fear that we are in for some disastrous impacts just due to what is already in the atmosphere along with the added amounts we cannot prevent in the next few decades. We may well need to pull CO2 out of the air by applying CCS to sustainably produced biomass. Using the politics of coal to prove out CCS so it is available for broader applications may be seen in a decade or so as a smart move.

The energy penalty projected for first-generation CCS systems is a legitimate concern. But we need not worry about a future of massive deployment of high energy penalty CCS systems. If CCS designs do not achieve substantially better efficiencies than the first versions, other low-carbon options will win in the marketplace.

What about the risk that CCS subsidies will enable coal to crowd out superior energy choices? Well, the key feature of the CCS subsidy provisions in the House and Senate climate bills is that payment is tied to actual capture and disposal of CO2. This is a huge change from past subsidies, including those in the stimulus bill, where the payment is not tied to actual tons of pollution avoided. While our community still may not like these CCS subsidies, keep in mind that they are part of a package that will put in place a steadily tightening cap on carbon pollution and a CO2 performance standard for new coal plants. That is a radically different policy environment than the status quo--one that will dramatically increase the prospects for efficiency and renewables. So whether you think, as NRDC does, that pay-for-performance CCS subsidies are an appropriate hedging strategy or that it’s just the price to pay to get the US off the dime on cutting carbon pollution, the odds are that CCS can play a positive role in helping us achieve our goals of moving the US and the world to a cleaner energy future.

Senate Moving Forward on Climate

2009-10-29T17:10:14Z

Dave Hawkins, Director of Climate Programs, Washington, D.C.

This has been a busy week for the Senate Environment and Public Works Committee. Hearings on the Clean Energy Jobs and American Power Act (S. 1733) began on Tuesday and by the end of the day today, EPW will have heard from over 50 witnesses on 10 panels. I will be testifying later this afternoon on S. 1733 and the potential for a clean energy future. Here are a few highlights.

The Clean Energy Jobs and American Power Act will put America on the path to clean energy. This path will lead to a growing economy with more jobs created here and fewer dollars shipped overseas to chase increasingly insecure supplies of dirty energy. We will also harness America's enormous talent in business, labor and our wealth of resources to shape our future and not just cope with it.

We must act now to begin making serious emission reductions if we are to avoid truly dangerous levels of global warming pollution. Climate scientists warn us that we face extreme dangers if global average temperatures are allowed to increase by more than 2 degrees Fahrenheit from today's levels (equivalent to 2 degrees Celsius over pre-industrial levels).

The policy framework contained in S. 1733 is overdue. The International Energy Agency estimates that each year of delay in tackling the threat of climate change will cost the global economy about one-half a trillion dollars annually. We cannot regain those lost years but we can avoid losing more time by acting now.

S. 1733 sets long-term limits that are consistent with the science, reaching a 42 percent reduction in global warming pollution by 2030 and an 83 percent reduction by 2050, from 2005 levels.

According to the Environmental Protection Agency the average per household cost of S. 1733 would be less than $120 per year. NRDC's research shows that under the House bill American households will save $6 per month on their electricity bills in 2020. Similarly, EPA's analysis of the House bill found that household energy expenditures would decrease 7% in 2020. Meanwhile, NRDC's analysis found that the cost of owning and driving a vehicle will decline by $14 per month. EPA's analysis of S.1733 concluded that household costs would be very similar to those under the House bill.

Both the House bill and S. 1733 will create more jobs -- a net increase of as many as 1.9 million jobs with effective policies to capture available cost-effective energy efficiency opportunities. These savings and job numbers are detailed on a state-by-state basis in the maps appended to this testimony.

S. 1733 and the House bill contain a large biomass loophole in carbon accounting by ignoring the global warming emissions related to biomass production and combustion when determining if the bills' emissions caps are met. The loophole could dramatically diminish the emission reductions achieved by these bills, undermining actual reductions in 2020 achieved by capped sources by as much as 6 percentage points. Getting the accounting wrong means that more CO2 is going into the air than is being acknowledged; and that worsens global warming. The atmosphere doesn't care if CO2 comes from burning coal, burning trees, or grasslands plowed up because of expanded biofuels production.

The common sense solution is to close the loophole now by ensuring that covered entities that burn or process biomass report the full net carbon impacts of that fuel, capturing net emissions reduction benefits from the most sound biomass sources and accounting for emissions increases associated with other types of biomass.

Time is short and the Congressional calendar is crowded but make no mistake, we are moving forward. Swift action on a bill to secure a beneficial economic, energy and climate future is critical.

Climate Bill Slanders

2009-09-16T22:36:53Z

Dave Hawkins, Director of Climate Programs, Washington, D.C.

Climate Bill Cost Claims: "Correspondent" Falls Down on Job

It seems that more and more opponents to action on clean energy and climate protection are succumbing to a virus more virulent than swine flu: the inability to tell the truth from fiction. Today's episode begins with a blog post by Declan McCullagh, who is billed as a "correspondent" for CBSNews.com (an operation not to be confused with the CBS News of Murrow and Cronkite).

Blogger McCullagh's post is headlined "Obama Admin: Cap and Trade Could Cost Families $1761 a Year." Well, with a headline like that you might think there was a new report by the Obama administration calculating the costs of a cap and trade bill on U.S households. But you would be wrong...

Here is the truth, as old-fashioned as that concept might seem to some.

What blogger McCullagh was actually writing about are five memos written by Treasury department employees that were provided in response to a Freedom on Information request filed by the Competitive Enterprise Institute, a conservative, Washington-based advocacy group. Most of the memos are undated, but some appear to have been written by Treasury Department employees in the final months of the Bush Administration as part of the transition. One must have been written after Obama took office since it refers to a February 2009 speech he made.

To provide suitably sinister mood music, McCullagh leads with a claim that the "Obama administration has privately concluded that a cap and trade law would cost American taxpayers up to $200 billion a year..." (my emphasis) and refers to one of these memos as "a previously unreleased analysis prepared by the U.S. Department of Treasury."

Well, here are the facts:

1. The first memo referred to by McCullagh is undated but obviously was written after Obama's Joint Congressional Session address of Feb 24, 2009, which is mentioned in the memo. It is one page long and was written by a Treasury Department employee, Judson Jaffe, probably for a higher-up's briefing book. It is neither an analysis nor a summary of one. It contains a statement that if all allowances from a cap were auctioned it "could generate federal receipts on the order of $100 to $200 billion annually." The memo does not assign a household impact cost (because it does not address what might be done with the receipts). Blogger McCullagh is the one who generated the "cost per household" number (by dividing $200 billion by about 113 million households).

So this memo is not an Obama administration estimate of the impact of a legislative proposal on consumers; it is a simple statement of the revenues that might be received if all allowances in a cap program were auctioned (as Obama's budget was then proposing). Nor was this estimate a secret. At the time the Obama budget was sent up there were numerous back of envelope calculations making estimates of revenues in the same ballpark under the full auction approach.

But the key falsehood in McCullagh's blog is his claim that this memo was an administration estimate of impacts of a climate bill on families. It was nothing of the sort since there was no mention of how the revenues could or would be used to provide benefits to households through tax cuts or other programs to lower energy bills.

In fact, the bills actually before Congress do not employ a 100% auction and they distribute allowance value so that the poorest households actually would have more money in their wallets. According to several credible, non-partisan sources, like the EPA, EIA, and CBO, the average household impact is less than the cost of a postage stamp a day.

2. The second memo cited by McCullagh is a draft of a transition memo dated 11/6/08, with no author indicated. It states that some future US climate policy could have "economic costs likely on the order of 1% of GDP." Again, this is not an analysis of any policy; just a ballpark indicator of the economic scale of possible climate policies.

The estimate of "on the order of 1%" is a typical number that is thrown around and is in no sense a bombshell.

Other actual analyses have projected total cumulative impacts on GDP over a 30-40 year period at 1% or less. And, what does that size impact mean? It means that 40 years from now the average household will have an income level twice today's average but it will be reached in June of 2050 rather than in January of that year.

Fossil Fuels 101?

2009-09-09T22:51:58Z

Dave Hawkins, Director of Climate Programs, Washington, D.C.

Well, my comments in a New York Times piece about natural gas have certainly provoked a lot of reaction, including some who thought I was arguing that coal is a better fuel from a climate standpoint than natural gas. Not what I said, for sure. Nor what I think.

No, the point of my statements to the Times reporter is that to protect the climate we need to keep cumulative CO2 emissions over the coming decades below amounts that will produce disastrous disruption of the climate. That means we need a game plan that keeps emissions from all fossil fuels in check---no fossil fuel that is abundant can be given a free pass. A ton of fossil CO2 that goes to the atmosphere does the same damage to the climate, whether it comes from oil, or coal, or natural gas.

Does that mean we can't make use of natural gas to help limit emissions? No, we can. Done right, natural gas has many advantages. It is a tool that can help or hurt our climate protection goals depending how it is used. If natural gas backs out the use of dirtier fuels, like coal from uncontrolled power plants, it helps. But if natural gas displaces opportunities to invest in energy efficiency or renewable energy, it hurts.

That means clean energy advocates need to push for policies that prioritize clean energy options like efficiency and renewables and assure that natural gas and any other fossil fuels we consume are used in a way that minimizes their CO2 emissions.

LIVE COVERAGE of July 7th Senate testimony on clean energy and climate legislation

2009-07-07T16:00:00Z

Scott Dodd, Editor, OnEarth.org, New York City

NRDC's David Hawkins is among the experts -- along with Energy Secretary Steven Chu, EPA Administrator Lisa Jackson and Agriculture Department Secretary Tom Vilsack -- scheduled to testify on Tuesday, July 7 before the Senate Environment and Public Works Committee.

The committee, chaired by Barbara Boxer of California, will begin considering the issue of clean energy and climate legislation following last month's historic passage of the American Clean Energy and Security Act by the U.S. House of Representatives. NRDC supported the bill, which would cap global warming pollution and create clean energy jobs, and has urged the Senate to strengthen and pass similar legislation.

Follow live coverage of the Senate testimony here on Switchboard.

&amp;amp;amp;amp;amp;amp;amp;lt;a href="http://www.coveritlive.com/mobile.php?option=com_mobile&amp;amp;amp;amp;amp;amp;amp;amp;task=viewaltcast&amp;amp;amp;amp;amp;amp;amp;amp;altcast_code=e87951c2c9" mce_href="http://www.coveritlive.com/mobile.php?option=com_mobile&amp;amp;amp;amp;amp;amp;amp;amp;amp;task=viewaltcast&amp;amp;amp;amp;amp;amp;amp;amp;amp;altcast_code=e87951c2c9" &amp;amp;amp;amp;amp;amp;amp;gt;NRDC's David Hawkins Testifies to Senate Committee on Clean Energy and Climate Legislation&amp;amp;amp;amp;amp;amp;amp;lt;/a&amp;amp;amp;amp;amp;amp;amp;gt;

I love it when you talk carbon taxes!

2009-02-18T23:11:15Z

Dave Hawkins, Director of Climate Programs, Washington, D.C.

In the Odyssey, Odysseus had to be tied to the mast to resist the call of the Sirens, who tried to lure his ship onto the rocks. These days the siren song of a carbon tax fills the ear of many commentators who urge us to recognize its beauty and steer our ship in its direction. A Washington Post editorial is a recent example.

The premise of the Post editorial is that cap and trade regimes are complex, vulnerable to special pleading, and do not guarantee success in reducing emissions, while a tax is simple and sure in its effects. But this is grass-is-greener thinking. The Post compares a flawed version of one approach (cap and trade) to an idealized version of the other (tax) and not surprisingly, the idealized approach wins.

The fallacy in this argument is that the same political body (our Congress) that, we are assured, will insist on putting special interest features into a cap and trade bill, when presented with a tax approach, will vote only for the purest proposal, firmly rejecting all lobbyists' pleas.

Those who argue that a tax approach is less likely to be designed for special interests than a cap approach simply are ignoring the tax code. We have decades of empirical evidence in the U.S. that when Congress designs tax policies it rarely resists the entreaties of special interests.

It is worth reading the history of recent (Nixon onward) energy tax proposals done by the group Tax Analysts. It is hard to see anything in that history that suggests a carbon tax would be successful (or if something called a carbon tax were enacted that it would actually accomplish anything).

The fate of the 1993 BTU tax proposal by Bill Clinton is instructive. It had its origins with then Vice President Gore's support for a carbon tax. That idea never got out of the Administration because of the impact it would have had on coal. Instead the Administration proposed a tax based on BTUs so that the tax on coal was the same as on natural gas per unit of delivered energy even though coal's carbon emissions were twice as high. Before the Administration bill was introduced, further concessions to coal were made. The BTU tax just squeaked through the House, thanks to the addition of lots of exemptions required to get the votes.

The Washington Post summarized the exemption feeding frenzy in David Hilzenrath's May 28, 1993 piece (purchase required):

"Some opponents of the energy tax have already been accommodated with exemptions proposed by the administration itself or the House Ways and Means Committee.

"For example, Clinton proposed exempting grain alcohol used as fuel, a concession to grain growers, and the House tax-writing committee proposed exempting much of the electricity consumed in the production of aluminum. But such concessions seem to have fueled the demand for even more changes in the tax.

"Both Boren and Breaux come from states with considerable oil and natural gas production. For Breaux, however, the greater concern may be Louisiana's energy-intense industrial base, including chemical, glass and plastics makers that export products."

But the BTU tax was stripped completely in the Senate, being replaced by a small gasoline tax that had only modest revenue raising benefits and almost no carbon or energy security benefits. More on this cautionary tale can be found in this New York Times news analysis and this paper from the Center for a New American Security.

A major public policy problem with the tax approach is that the debate quickly becomes all about money. A proposal that is initially designed to achieve another purpose like energy efficiency or greenhouse gas reduction is analyzed over and over again by every interest group and member of Congress based almost entirely on its economic impact on constituents. Economic impacts will be an important topic in a cap approach to be sure but the supporters of a cap proposal have something that tax advocates do not have: the ability to keep the focus on the direct and intended effect of the legislation - how much does it cut pollution? In a tax bill, the effects on pollution are indirect and run a much larger risk of being submerged in the more easily calculated impacts of the tax provisions on various fuels, consumer energy expenses, and different regions of the country.

The Post editorial also cites results from the European Union emission trading system (EU ETS) to argue that cap approaches do not work. What about that? Well, phase one of the EU ETS was intentionally a pilot program: it was short-term, lasting only a few years, and it was put in place quickly, before either the government or industry had a good idea of what actual emissions were. Since it was a pilot, governments decided to err on the side of being generous with allocations and spent no time seriously considering longer-term allocation policies. Allowances were not allowed to be carried forward from the pilot phase to the later phases, making them almost worthless as the end of the pilot phase approached. None of these flaws is inherent to a cap system and none of them is being ignored as real cap programs are being designed.

Politicians certainly can design a flawed version of a cap, though the one example of a national cap enacted by Congress (the 1990 acid rain program) fully achieved its emission reduction objectives. It was flawed in giving away all allowances for free but because reduction requirements were substantial, continuous emission monitors were required on all sources, and most power companies were still operating in regulated markets, the windfalls and market distortions that occurred in the pilot phase of the EU emission trading system did not happen here.

There are some issues that are unavoidable with either a cap or a tax approach that is designed by real-world politicians. One of them is an awareness of regional and interest-based impacts.

There is nothing magic about a tax frame that makes these issues of distributional politics disappear. A cap program will be not be immune to these considerations, to be sure. But there is no evidence that a tax approach has a greater potential to avoid special interest deals.

Meanwhile, the now solid awareness of the importance of allowance allocation design is causing special interests to retrench in major ways from their earlier positions seeking free allocations of allowances. For example, while just a year ago, many firms in the coal power sector were arguing for free allowances for all coal generators based on the "model" of the acid rain law, they have abandoned that and are now proposing allocations to electric distribution companies with a stipulation that all of the value of those allowances be passed through to customers. This is the approach proposed in the USCAP Blueprint. An exception for unregulated coal plants is proposed only for the portion of compliance expenses that cannot be passed through to customers. Even the Edison Electric Institute has proposed that nearly all allowances for the power sector be provided to distribution companies with the same requirement of pass-through of benefits to customers. Similarly, the USCAP Blueprint (joined in by three major oil companies) does not call for any free allowances to oil and gas fuel providers to cover the emissions from the fuel they sell, a departure from what the oil industry has proposed in the past.

Cap proposals are criticized for allowing offsets and there are real problems with many offsets proposals. But offsets are in cap proposals to deal with claims that the cost of a reduction program will otherwise be "too high" for certain interests. Those same interests are not going to say "never mind" just because the cost is imposed in the form of a tax rather than an allowance price. No serious observer thinks a tax bill that moves through Congress would forbid offsets. The carbon tax bill introduced by Rep. John Larson (D-CT), H.R. 3416, includes a wide open offset provision, creating a tax rebate for firms that implement offset projects. The bill also provides for tax proceeds to be dedicated for purposes similar or identical to those found in cap and trade bills ("clean" energy investments; negatively affected industries). These provisions reflect the political realities that are recognized by the drafters of such bills but are typically ignored by commentators who laud the apparent simplicity and certainty of hypothetical tax approaches.

What about the claim that a tax will enjoy broader political support? It's a statement of historical fact, not a partisan comment, that Republicans in Congress, particularly when a Democratic President has been in the White House, have overwhelmingly opposed taxes put forward for energy or environmental policy purposes. In 1993 not a single Republican voted for the Clinton BTU tax bill in the House, nor in the morphed gas tax version in the Senate. These materials on the RNC website from the 2006 and 2008 campaigns make for interesting reading by those forecasting a post-partisan embrace of a carbon tax. The unfortunate fact is that such tax policies are red meat for demagogues. It is very likely that a decision to actually attempt a tax approach to climate protection would be walking into a political trap. That is too big a risk to take when so much rides on enacting climate legislation without further delay.

It is perfectly possible for Congress to craft a good climate bill that relies on a cap and includes complementary policies to drive carbon intensity improvements in the key sectors of electric power, vehicles, fuels, and buildings. The fact that it is possible does not guarantee it will happen. But rather than dismiss a cap as an inherently flawed approach, is it too much to hope that commentators would resist the calls of the tax sirens and recognize that both approaches can be implemented well or poorly? Then we could focus on the real issues that we need to address to achieve a good policy result in time to protect the climate.

Cleaner Cars are on the Way!

2009-01-26T02:07:58Z

Dave Hawkins, Director of Climate Programs, Washington, D.C.

Less than a week into office President Obama is acting to show the country and the world that the U.S. is back as a leader in the fight to protect the climate by taking on global warming pollution. The Washington Post and the New York Times are reporting that on Monday the President will direct EPA to approve the right of California and at least 13 other states to set global warming pollution standards for new cars and direct the Department of Transportation to set higher national fuel efficiency standards.

With these actions our new President is not just stepping up to the threat of climate chaos. The cleaner cars he will help put on the road will show us the way to reduce our dangerous dependence on oil and will push automakers to make the cars that the world will want and need in the 21st Century.

We at NRDC are thrilled that the President is acting quickly to follow-up on his campaign promise to stop the pattern of global warming denial and delay that we have lived through in the past eight years. In 2002 California enacted the world's first law to cut global warming pollution from automobiles. The response of the automakers was to hire lawyers instead of turning their engineers loose to make cleaner cars. Court after court shot down the auto company lawyers' claims but the Bush Administration threw yet another roadblock in the path of the cleaner cars that California and at least 13 other states were trying to put in the hands of their citizens. Overruling the advice of career agency staff, the Bush Administration EPA for the first time since EPA was founded 38 years ago, denied the right of the states to set tougher vehicle pollution standards under the Clean Air Act.

By directing his EPA to reverse this unlawful obstructionism and approve the states' efforts, President Obama is preventing years of additional delay in getting these cleaner cars on the road. If the automakers would take their eyes off the rear view mirror in developing their business plans, they too would be applauding the President's action for it is the kick they need to turn out a better product-better for the planet, better for consumers, better for ailing auto companies, and better for the American economy.

I've been watching Presidents come and go in Washington since 1970 and this is the best and fastest environmental start of any Presidency I've seen. Bravo to the President and bravo to the American voter for bringing all of us this breath of fresh air!

Climate, Congress, and USCAP

2009-01-18T17:30:00Z

Dave Hawkins, Director of Climate Programs, Washington, D.C.

Joe Romm posted a pretty scathing comment about the USCAP Blueprint on his Climate Progress blog a couple of days ago. Here is my response.

Joe,

You are and will remain a respected friend. As an author and blogger, you call it as you see it on what needs to happen to emissions and our energy system if we are to avoid a climate catastrophe. And you do a great job at it.

We at NRDC have another job. We must do what has to be done to move this Congress to enact climate protection legislation that will change overnight the kinds of energy and other investments that are made, start the innovation engine spinning, bend our emissions down without further delay, and show the world that the U.S. has emerged from its cave of inaction.

We are buoyed by President-elect Obama's commitment to act but we will need action from Congress as well. The new Congress contains a growing number of climate protection champions but it also contains a core of obstructionists bent on using every tactic to block any action, other members who think global warming is not enough of a problem to warrant any real change, and members who are inclined to be helpful but not if it involves spending much political capital as they see it. We don't have time to change who the members of Congress are; we need to change the way current members think about this issue.

There are a number of ways to move Congress to act and NRDC is pursuing all that we believe will help. One important way is to engage deeper and broader support for action from the U.S. business community-a community that until recently was dominated by outspoken opponents of any action to cut global warming pollution. The USCAP Blueprint you attack is an effort to get major American business leaders, joined with a number of U.S. NGOs, firmly committed to working to get this Congress to pass climate protection legislation. It is part of a process designed to make good legislation possible.

This past Thursday the business members of USCAP testified to Congress that action by Congress is urgent, not only to protect the climate but to provide a foundation for economic recovery. Their testimony powerfully challenged those members of Congress whose mindset is still that we cannot afford to act now because they think climate protection means economic sacrifice. The business leaders' testimony was "yes we can" take action to protect the climate and it will help the economy, not hurt it. The members of USCAP will be a strong force and voice for action in the weeks and months ahead. Without those voices NRDC believes action in Congress would be slower and less effective than it has to be to protect the climate.

Your comment that the Blueprint amounts to "unilateral disarmament" by the NGO members is telling. The political equivalent of mutual assured destruction threats will not protect the climate; it will protect only the status quo. To make change happen we need to realign the players, not just attack them. You seem to think that in the political process only the position of the NGOs matter and the positions of the "bunch of companies" in USCAP don't matter. If that were true we would have enacted strong climate protection laws in the Clinton Administration.

Your critique of the substance of the Blueprint focuses on emission targets, offsets and allowance distribution (I have already responded -- here and here -- to your incorrect description of the coal provisions), so let me say a few words on those topics.

Emission Targets

On emission targets, you point out that the science justifies a target tighter than a 20% reduction from today's levels by 2020. Of course it does. The science justifies having kept emissions well below today's levels starting 20 years ago!

But just saying what the science justifies does not ignite the engine of policy change unless it is coupled with a serious political strategy for overcoming the claims and anxieties about the costs of doing what the science justifies. The targets during the first decade of a climate protection program are among the most important and most challenging of a bill's design features. Since the U.S. is late in cutting emissions, we need to make up for lost time and that argues for faster, not slower, reduction schedules. But too many actors in the political debate are still concerned about the cost and feasibility of meeting deep emission reduction targets, particularly in the early years. Changing these views is the challenge we face.

As a blogger you have the responsibility of stating what the science justifies without needing to be concerned about formulating a strategy to overcome the political obstacles to effecting change. Keep at it but don't ignore the fact that we will need more than the truth as you see it to make change happen.

You know that since the election President-elect Obama talked of returning emissions to 1990 levels by 2020 and was silent about targets for the crucial years between then and the long-term 2050 target. The Blueprint targets that NRDC supports will require reducing emissions to 7% below 1990 levels by 2020 and all of the USCAP members, including the 26 major business members, support reductions at least as strong as those mentioned by President-elect Obama for 2020 and all support reductions of 42% by 2030 as well as 80% reductions by 2050. Yet you say that the Blueprint, which commits these business leaders to support nothing weaker in the near-term than what the President-elect mentioned and contains a call for even stronger reductions supported by NRDC and others, will move "the center to the right and vitiate the results of the election." That is a strange interpretation!

And focusing only on the near-term targets for the cap component of the climate protection program, while ignoring the power of additional policies to drive reductions further, is a mistake. The Blueprint contains a sweeping set of additional polices that I'll say more about in a moment.

Offsets

On offsets, you argue that today's offsets markets are rife with fraud and if compliance with the cap were achieved only with the offsets potentially allowed under the Blueprint's maximum limits, that we would not see the reductions in industrial and energy sector emissions we must have if we are to protect the climate. NRDC has no argument with you that if fraud is not prevented and if offsets are the dominant means for compliance, the outcome would be unacceptable.

But the Blueprint calls for sweeping complementary measures in addition to the cap to drive emission reductions and those measures operate independently of whatever offsets are authorized. The Blueprint calls for specific programs that will drive emission reductions in all of the major sources of industrial, transportation, commercial, and residential sources of global warming pollution:

CO2 emission standards for new coal-fired powerplants and financial incentives to speed commercial use of carbon capture and storage;
GHG performance standards for the entire transportation fuel pool, replacing the piecemeal renewable fuels standard of current law that ignores emissions from fossil-based transportation fuels;
A structured process to improve GHG performance standards for vehicles;
A suite of requirements and financial incentives to improve transportation system efficiency that will reduce VMT growth, reward smart growth policies, and provide more and lower-polluting alternatives to meet transportation needs for people and goods;
Codes, standards and financial incentives to reduce global warming pollution resulting from running our buildings and appliances-the source of about half of America's CO2 emissions.

Since the recommended emission targets in the Blueprint are for both capped sectors and the U.S. economy as a whole, a combination of the cap, the complementary measures mentioned above, and other policies designed to achieve additional reductions outside the cap will be needed to achieve both of those objectives. The Blueprint also calls for a reserve price for the auction of allowances "set at a level that helps to avoid prices that are too low to encourage long-term capital investments in low- and no-carbon technologies." These provisions are designed to prevent a scenario of an "offsets-only" pathway that you and we agree is not acceptable.

It's also important to reflect on why offsets are included in many climate protection proposals, often in amounts that concern many of us. The most powerful driver of this appetite for access to large amounts of offsets is, in NRDC's opinion, the continuing anxiety among many policymakers that the transition to a low-GHG economy will be "too costly" unless such offsets are available. Many of us believe these anxieties are unwarranted and that deployment of cleaner energy alternatives can be achieved at much lower overall costs (indeed with net cost savings when all impacts are considered) than conventional economic models suggest. But we need to be honest with ourselves and acknowledge that we have not yet persuaded enough actors in the policy process that our assessment is correct.

It is not sufficient as a political strategy to simply point out the perils of an excessive reliance on offsets. To create a comfort level that lower levels of authorized offsets will provide an effective cost-containment mechanism requires doing a better job of persuasion that the conventional estimates of costs are not correct and that there are superior approaches to hedging against the possibility that costs could be higher than estimated.

Fortunately, persuasion is a renewable resource and it has not been tapped out with the release of the Blueprint. I would urge you to devote more of your considerable analytic and communications skills to making the case in a persuasive fashion that not only are excessive offsets bad for the health of a climate protection program but that there are reliable and robust alternative approaches to address the anxieties of those who believe large offset supplies are needed.

Distributing Allowance Value

Finally, a few words on distribution of allowance value. Note the term "allowance value." It is the term used throughout the Blueprint's discussion of this issue and it does not specify whether the method of distributing such value is by auction or statutory allocation of allowances. While much public discourse has employed the shorthand of "auction" versus "free" distribution of allowances, the real policy debate is over the purposes of allowance value distribution rather than the method of distributing that value.

The Blueprint recommends these priority purposes for allocating allowances in the first decades of the program:

transform our economy;
modernize our nation's energy infrastructure;
smooth the transition for consumers to a low-carbon economy; and
adapt to the impacts of global warming.

If you think these purposes are off-base or missing something major, share your views. If you think the Blueprint does a flawed job in implementing these purposes, point out the flaws.

You quote another group's claim that the Blueprint "would reward corporate polluters with hundreds of billions of dollars of giveaways." That's wrong. The entire emphasis of the Blueprint is on distributing allowance value to protect consumers and achieve the other purposes listed above. The largest and most specific recommendation for use of allowance value calls for distribution, not to pollution sources, but to local electric and gas distribution companies with the explicit requirement that all of the value be passed through to end-use consumers both directly and through energy efficiency programs. Other recommendations call for distribution of allowance value to protect low-income consumers, for worker transition and training, to drive the technologies we need to operate a low-carbon economy, and to provide resources to assist managers of vulnerable resources and vulnerable communities here and abroad to respond to and reduce the damage resulting from climate change that is unavoidable.

The Blueprint's recommendations for allowance value distribution to pollution sources are the exception, not the rule, and are temporary. Thus, there is a recommendation for some allowance value to be directed for transitional purposes to energy-intensive industries with trade-exposed commodity products. If U.S. firms that make trade-exposed commodity products shift that production overseas we will not achieve the emission reductions we need. Providing some allowance value to prevent this is not "rewarding polluters;" it is aimed at protecting the emission reduction objectives of the program. The Blueprint explicitly calls for eliminating this distribution as the competitive imbalance disappears. Another exception is the recommendation for a temporary distribution of some allowance value to competitive power generating sources for the portion of compliance costs that cannot readily be passed through to customers. This recommendation calls for phasing out this distribution in a manner that will provide strong incentives for timely investment in low carbon alternatives.

There is room for debate on the specifics of these exceptions but it is important to recognize that the Blueprint represents support by 26 major U.S. businesses for principles and specifics on allowance value distribution that are miles away from those who are calling for allowances to be given primarily to emission sources. Bank that progress, don't ignore it.

The business members of USCAP have come a long way in just a bit over two years and the positions they have committed to advocate have evolved strongly in the right direction. The Blueprint represents the state of that evolutionary process as of the start of the new Administration and Congress. The Blueprint's signers say "we want to be clear that this is not the only possible path forward and we stand ready to work with the Administration, Congress, and other stakeholders to develop environmentally protective, economically sustainable, and fair climate change legislation."

Joe, you are a brilliant analyst of what has to happen in the real world to protect the climate. But you need a new yardstick to evaluate policy proposals--not just how they match up to what you and I would like to happen but what they do to increase the chances of enacting serious legislation by this Congress this year. I and NRDC's leadership believe that engaging a large number of major firms in a committed effort to enact climate legislation now poses far fewer risks for the planet than demanding an outcome that is not supported by a serious strategy to overcome the real obstacles that we still face in Congress.

"A Manifesto for a New Environmentalism" Misses the Mark

2007-09-27T21:41:09Z

Dave Hawkins, Director of Climate Programs, Washington, D.C.

Two passionate but confused individuals, Ted Nordhaus and Michael Shellenberger lead the current issue of The New Republic with "A Manifesto for a New Environmentalism". They lambaste "environmentalists" for being fixated with a "pollution paradigm" that operates by "limiting human power" and by "increasing the cost of dirty energy." This approach, they argue, will not solve global warming and what is really needed is a five to ten-fold increase in government expenditures on "breakthrough" energy technologies.

While their opinions are strong, their grasp of the facts is not. Unquestionably, we need to shift from dirty energy to clean in order to solve global warming. Groups like NRDC and others most active in the fight to prevent global warming are supporting legislation that will speed this shift. We call for a rapid embrace of already developed clean energy resources, spurred by a smart program that guarantees reductions in U.S. global warming pollution. What Nordhaus and Shellenberger fail to grasp is that such technologies exist but are hobbled by the fact that businesses today still make more profits by supplying dirty energy than clean.

The authors are wrong in their claim that we have to wait for new "breakthrough" technologies before we can move away from dirty resources. And they are wrong in claiming that a big government funded program is the critical missing piece to make the shift to clean energy happen.

Their claim that a "consensus" exists that we cannot cut global warming pollution substantially with clean energy solutions that are ready today, is refuted by Socolow and Pacala’s seminal 2004 "wedges" paper in Science. The Intergovernmental Panel on Climate Change’s reports released earlier this year also document the very large potential of existing energy technologies to meet growing energy needs without increasing global warming pollution.

Between now and 2030 over $20 trillion will be invested globally to meet the growing demand for energy services. Nearly all of this will be spent on fuels and conversion methods selected by private sector actors chasing profitability. The challenge is to focus the incredible power of these private sector actors on energy investments that minimize carbon emissions. To move at the pace and scale required to prevent the worst impacts of global warming we need policies that make clean energy products and services a superior business proposition.

Policies that require a clear and steady reduction in emissions will make the market that will move the private sector in the right direction faster than any government funded program by itself. With a schedule of declining caps on emissions as the law of the land, entrepreneurs in firms large and small will know there is a growing market for clean energy innovations. They will help the nation meet targeted emissions reduction at the lowest possible cost.

Nordhaus and Shellenberger ignore the reality of the energy marketplace when they argue that the most important policy to drive new technology is a large government funded program. While incentive funding measures can be an important complementary strategy for clean energy deployment, by themselves they will not move the private sector at the required pace.

In arguing for "breakthrough" technologies rather than deployment of today’s clean energy solutions, Nordhaus and Shellenberger are peddling a false choice of the kind that the Bush administration has used to justify its retrograde policies for the past seven years. The convenient truth is that with intelligent policies to make clean energy more profitable we can get started today and we can set in motion the forces that will also deliver the additional breakthroughs we will need in the coming decades.

This is not an "environmentalist" pipe dream. It is the judgment of the leaders of 27 of the largest American businesses who have joined with NRDC and others in the U.S. Climate Action Partnership (USCAP), calling for a mandatory declining cap on U.S. global warming emissions. Its members include large energy producers and consumers such as Shell, Rio Tinto, and Duke Energy and Alcoa. These Fortune 500 companies recognize that their future business model depends upon the shift to low carbon technologies and efficiencies made possible through a national program of required emission reductions.

While necessary, it is also true that an emissions cap on carbon isn’t sufficient to drive the more profound technology changes we need to harmonize economic growth and climate protection. That is why USCAP has called for a program that combines emissions caps with complementary policies and measures to speed the deployment of big change technologies in critical areas like power generation, vehicle design and new fuels. Such complimentary policies that NRDC supports include setting standards for renewable energy, high mileage vehicles, low carbon fuels and energy efficiency.

As a closing example of the sloppiness of the Nordhaus and Shellenberger polemic, consider this sentence that appears near the end of their essay: "To be sure, the effort to reduce and stabilize global greenhouse gas emissions will require a major regulatory effort to make sure that everyone is playing by the same rules, provide a stable investment environment for nations and businesses, and increase the cost of fossil fuels relative to cleaner energy sources." A "major regulatory effort"? Is this the same effort earlier dismissed as not the most important priority? "Increase the cost of fossil fuels relative to cleaner energy sources"? Is this the agenda the authors earlier claimed (incorrectly) that environmentalists were misguidedly pursuing?

Nordhaus and Shellenberger have had some useful thoughts to contribute to the topic of how to best align human goals for economic well being with the reality that all economies depend on a healthy and well-functioning set of complex ecosystems. But this latest broadside misses the mark by a mile.