Interesting NYT article about how key Congressional members are beginning work on Cap & Trade

[beachmom]

http://www.nytimes.com/gwire/2009/03/19/19greenwire-dems-crafting-bicameral-strategy-on-cap-and-tr-10219.html

Democrats crafting bicameral strategy on climate, energy bill

By DARREN SAMUELSOHN, Greenwire
Published: March 19, 2009

Democratic leaders began House and Senate strategy sessions this week in advance of major energy and global warming legislation sought by President Obama, several senior lawmakers said today.

There have been face-to-face meetings with House Energy and Commerce Chairman Henry Waxman of California, House Energy and Environment Subcommittee Chairman Ed Markey of Massachusetts, Senate Environment and Public Works Chairwoman Barbara Boxer of California and Senate Foreign Relations Chairman John Kerry of Massachusetts.

"The parties I've been meeting with all believe cap and trade is the right way to go," Boxer told reporters.

"They all understand that there's regional issues that we have to deal with," she said. "So I think what we're learning is that because I had a trial run, I know which colleagues I need to sit down with. It's very helpful."

Boxer added, "So I think a strategy is developing to see how this bill comes together."

And, of course, they mention that "moderate" Democratic caucus, which in fact (in my view), is trying to kill cap & trade, or at least weaken it enough to render it ineffective.

Anyway, it is great to see that Sen. Kerry is part of this top group working on the issue.

[karynnj]

1. This is interesting

Stabanow's comment was interesting in that it seems she has moved a bit closer as she was totally against the idea a few weeks ago. I don't see a problem with giving some of the credits for free. It seems that by "giving" some of the credits, rather than selling them all, you can accomplish what needs to be done. The fact is that those credits will put a cost to something that is now free. That is a lever to make people produce less carbon than when it was free. That is true whether they are given credits equal to - say some percent of the carbon that the best practices would produce to make whatever they are making or if they need to buy credits starting at the first emission.

Note that the marginal cost for carbon over the best practices level would be far higher than the fixed cost over all emissions. For the same initial total carbon cost, it would do better at rewarding good behavior and penalizing bad behavior.

Dumb example
Assume that a power plant produces an amount of power that the best plants we have can do with 50 units of carbon, but they now use 75.

Fixed Price - says they pay $100 for every unit - so they pay $7,500. If they improve to the best plant level they would pay $5,000 - a savings of $2,500.

Marginal - here only units above the best procedures pay. Some plants will pay nothing. Assume the current levels are such that the cost per marginal unit is $400. The cost to this plant is $10,000 which is higher then the fixed cost, but by improving to the best plant level they would save that entire $10,000.

One big difference is that the fixed price will produce a bigger income stream into the future, where the second shrinks as usage becomes more efficient.

[beachmom]

2. Cap & trade won't happen this year, if we are to believe this report:

http://blogs.abcnews.com/george/2009/03/scorpions-in-a.html

As the Wall Street Journal and Washington Post have reported, House Democrats (backed by the White House) plan to write a budget resolution that allows health care to be passed by a simple majority (through the so-called "reconciliation" process) if a bipartisan compromise isn't reached by September.

Cap and trade will not get the same budget protection, and there are nowhere near 60 votes for it. Keeping it out of the reconciliation process recognizes reality: Congress can't pass it in the middle of a recession.

Health care is different.

...

If the bipartisan talks eventually fall apart, the White House believes President Barack Obama will still get credit for trying to reach out, which will soften the blow if the reconciliation hammer comes down in September.

I hate to say it but this makes sense. The GOP is already calling cap and trade an "energy tax". As I said, speaking to relatives who have lived through carbon cap and trade in Europe it DOES raise energy prices, and God -- this recession has hurt so much, I just don't see how it is politically possible to get it done this year. Or how Americans could take that increase in cost (which the tax cuts were supposed to offset, but have now become a lifeline for survival).

Thoughts?

[karynnj]

3. The real question is whether we can afford not to do it

It is a tough question. On the one hand, the costs are real and in the past, there was talk of the developed countries even aiding the third world to do what they need to do. The economy is really bad. I would like to believe the Senator when he speaks of how innovation on this front could be a win for the economy as well as the right thing to do for the environment. He was and is a fantastic cheerleader for that - which was one reason I liked his approach with its love for science and innovation - over the more somber Gore prescription. It is though very possible that the effect would not be as healthy for the economy as he says - though in the past major technological advancement did come with economic gains.

The problem is that the for many - the costs are real and will definitely occur and the economic benefits are not as certain. But the need to do it was NOT because it would stimulate the economy, but to deal with a real looming environmental problem. That means believing scientific projections that we can not - ourselves test. I liked what Kerry spoke of in 2007 - which was to compare the down sides of being wrong in each case. This would have to be updated to consider the immediate toll on the economy.

If you genuinely believe the science, it still falls on the side of doing it.

[beachmom]

4. Unfortunately, that argument will not resonate with a majority of Americans

The reason is because this is a nation that focuses on the short term. And in the short term people don't know how they are going to pay their household expenses. The long term threat of global climate change seems very vague and unclear. After Hurricane Katrina it became more clear. Since, however, the hurricane seasons after that horrible year were milder, people are not going to buy the science so easily.

Other than environmentalists and folks in the blue states on the coasts, there simply is no large movement to stop global climate change outside of environmental groups. Most people I know who volunteered for Obama were not big into the environment. The only message that WILL resonate is energy issues -- the skyrocketing gas prices that came out of nowhere and worsened the economy. I think that is the way to sell the plan.

[Mass]

5. You cannot sell the plan this way, because you end up with people

proposing more drilling, more natural gas, and you have dropped your best argument to fight us: that it is killing the planet.

Energy policy and fighting global warming HAVE TO go together. If they do not, we will stay where we have been for 20 years: doing nothing because Democrats are frightened, once again, to tell the truth.

May be everything cannot be done in one day, but, if people stop trying, nothing will ever be done, or it will be done in other countries and the US will become a second zone country, because their leaders are afraid to tell the truth.

[TayTay]

6. What does it cost for that asthma prescription for your kid?

How much does it cost to care for cancer that someone got from being too close to a toxic dump site? What is it worth to people to actually be able to eat fish without fearing mercury poisoning? Burning coal creates mercury. Eat fish with enough mercury from burning coal and you can get brain cancer or neurological diseases. It can kill you.

How much does it cost to fill the prescriptions, lifetime, of someone with asthma? Asthma is related to what goes on in the environment and plant emissions. An aunt's breast cancer could be related to global warming and cleaning up the planet. That kid down the street that got leukemia is the 5th unusual cancer in this neighborhood in 5 years. What is the cost of that?

I agree. There are better ways to explain this that don't sound so eggheady. We should use them.

[beachmom]

7. Nobody gives a damn about the water shortage here in Atlanta, and that

directly affects people!!! So you think that some obscure concept of global climate change in the future is going to move these folks? No way. I am just warning you guys there are a lot of "Who gives a ****" types in America. They don't care. And they don't want to pay the higher energy bills.

I realize my views are skewed by the wingers I live amongst. The other day, I had to listen to a neighbor go off on unions: "I HATE Unions", she said. Saying it several times. I mean, I don't know what to do with attitudes like that. I guarantee you she and a lot of the other college educated neighbors of mine think global climate change isn't real.

[TayTay]

8. This is the cold reality.

Climate change impetus is not coming from the Southern States. Those states are, by and large, represented by Republicans who have a vested interest in not doing anything about the environment. They are in the pay of Big Coal and Big Energy concerns. It is in their financial interest to look the other way. That is how it is. But, that is how it has been, nothing has changed there.

Getting a decent cap and trade program is going to be an ugly process. It is going to involve some political horsetrading among those who really want this and those who are mushy on it. (The opposition is going to remain the opposition.) I think this is not going to be done in a bold stroke but over the course of 3-4 years. There is enough movement in the country to do this. There is enough movement in Big Business to do this. (When WalMart starts talking about how "green" they are becoming, you have a friggin movement.)

Politics is a messy damn process. It does not run on unanimous consent and it never will. But progress can be made without it.

[beachmom]

9. Then clearly my geographic location renders me unable to

"take the temperature" of the country. There is no interest whatsoever in my area to combat global climate change. The Republicans represent the people here.

[TayTay]

10. And there is no interest whatsoever in my area in water rationing

So, you think maybe we should get together and horsetrade on that?

That is the point of having a federal government. We bring together people with different interests from different states and trade based on those interests. That is what federal government politics is all about. Unless you are under the Bush Administration which believed in moving resources from donor states to other states as a political reward. The South benefited greatly from that arrangement over the last decade or more.

I understand that there is little desire for environmental change where you live. There is little desire for some issues dear to people in your area where I live. So, what do we do about that? The Republican solution is to do nothing and protect the status quo because that benefits the monied interests.

[beachmom]

12. I thought there was an issue of Mass. water turning everyone gay?? :)

Well, the water thing may well be related to global climate change, although that can never be proven scientifically (only global trends, not particular incidences of drought). Pres. Obama actually said "Atlanta may run out of water" when talking about global climate change at that Business Forum. I was like, "WHAT??? WHEN??". The problem is the Governor set up commissions on the problem and appointed zero environmentalists. That is a problem.

[TayTay]

15. Yes, it is a problem.

And if the people will not deal with it, then they will suffer the consequences. (Different shit, same thing for the problems we face here. Face them, deal with them or get stuck under them.)

What percentage of people showing up for events constitute a tipping point? I happen to think it is a surprisingly low number. I just saw a flash of a C-Span program about US Energy that was held last week. The representative from one of the big oil companies came out for Cap and Trade. Yeah, it will be Cap and Trade with consessions, but a rep from Big Oil came out for Cap and Trade. That might be a tipping point.

[karynnj]

11. I can see that you are right and that this is why it will be very very hard

to get something done on this. That was what I was trying to say. It might mean that Obama has to use his political capital and his ability to speak to the country to make people see why they need to change. That is real leadership. For all Obama's charm and charisma, I am less certain he either will or can do this than I was that he could get elected.

[beachmom]

13. Actually, Obama was channeling Kerry at that Business Forum

But it was funny because he was trying to remember Kerry's story about acid rain, but he had to think a moment. I could imagine in his head he was thinking -- now what the heck did Kerry tell me about that program? Although he was a bit inartful in how he told the story, it was indeed Kerry's story.

So, you never know -- sounds like he respects Kerry's views on the subject, if he has already internalized some of the "Kerry stories".

[karynnj]

14. That's good to hear

I think that no one has done as good a job as Kerry did in making the case that there will be positive side effects and that, with acid rain, it cost less and improved faster than expected. (I think Gore deserves enormous credit for educating people and making this a bigger issue, but Kerry is far more upbeat in making the case for it.)