Paul Krugman concludes in “It’s easy being green” (NY Times Opinion, 9/24/2009) that “the claim that climate legislation will kill the economy deserves the same disdain as the claim that global warming is a hoax.” Indeed, but the notion that the Waxman-Markey legislation is about “saving the planet” (Krugman’s words) is equally inscrutable. Even Joe Romm’s Climate Progress blog, one of the most ardently supportive voices in favor of Waxman-Markey, asserted in May that if the law is enacted there would only be a “10% to 20% chance of averting catastrophe.” Are those the best odds that Waxman-Markey’s cheap emission reductions can buy?
Waxman-Markey’s faults notwithstanding, it could be a positive step forward if it does not impede complementary efforts to achieve further emission reductions and to set precedents for more effective federal action. And yet the House bill would perversely impede and undermine such efforts. How so?
Suppose, for example, that you wanted to install photovoltaic panels on your home to reduce your carbon footprint. By reducing your dependence on coal-powered electricity, less coal would be burned, and your personal contribution to greenhouse gas emissions would be diminished — you would hope. But with cap-and-trade it doesn’t work that way.
Under Waxman-Markey’s emission trading system, your local electricity distribution company would be required to hold and surrender allowances for its greenhouse gas emissions, including the emissions resulting from your electricity consumption. But even if you reduce or eliminate your consumption of grid-supplied electricity, the allowances that would have been used to cover your emissions will still be allocated, and will be available to allow more emissions elsewhere. Those additional emissions would not have been allowed without your action, and will nullify any environmental benefit of your action. Unless there is some mechanism for capturing and retiring the surplus allowances resulting from your action, you will have accomplished nothing more than to marginally reduce industry’s compliance costs by increasing the supply of surplus allowances.
Complementary greenhouse gas reduction actions by companies and local governments would similarly be subverted by emission trading. The Waxman-Markey law makes a feeble attempt to address this issue in a singular provision allowing states to “require surrender … of emission allowances” from regulated entities (HR2454, p. 1018), but this authority is only granted in the context of states’ own cap-and-trade programs and is apparently intended to be exercised only for the purpose of demonstrating compliance with such programs. States could use this authority to ensure that their cap-and-trade regulations achieve emission reductions that are additional to what the federal program alone would achieve. However, states are barred from implementing such programs between 2012 and 2017, and the provision does not address the additionality problem in the context of other types of programs such a vehicle emission regulations and photovoltaic financing programs.
A practical resolution to this problem would be to authorize the U.S. EPA to set aside and retire (or allow states to retire) the surplus allowances resulting from states’ complementary greenhouse gas reduction programs. There is a growing awareness of this issue among some state governments and public interest groups (even though the press and the public are largely oblivious to the problem), and the Senate will soon have an opportunity to formulate a legislative remedy.
Yes, “it’s easy being green,” but saving the planet is harder. Congress might not be able to pass climate legislation if it isn’t as cheap and easy as Krugman says it will be, but the law should not deter and diminish the efforts of those who are able and willing to do more and to pay more to help avert climate catastrophe. The fundamental question before the Senate is this: Should individuals, corporations, municipalities, and states have the ability and the right, under federal cap-and-trade legislation, to take action to further reduce their carbon footprint without their action resulting in, and being nullified by, increased emissions elsewhere?
