By Marc Korman.
In Part One, we discussed CCAN founder Mike Tidwell’s concern with the Waxman-Markey cap-and-trade bill and his advocacy for Chris Van Hollen’s alternative. Today we will take a closer look at the Van Hollen proposal and what Maryland is already doing on climate change.
Before diving into the Van Hollen proposal, it should be noted that Congressman Van Hollen voted for Waxman-Markey and advocated for its passage, despite having an alternative proposal of his own.
The Van Hollen bill would place a cap on emissions that would be reduced over time, the same as the Waxman-Markey bill. The cap would be enforced by requiring permits to be purchased “upstream,” meaning those introducing greenhouse gas emitting fuels into the economy would need to purchase permits, as opposed to those actually causing emissions by using the fuels such as utilities. Unlike Waxman-Markey, 100% of these permits would be sold and none would be given away. The proceeds of the permit sales would be divided up equally among each American as a dividend.
As Tidwell said, Congressman Van Hollen’s proposal has the benefit of being simple and transparent. But the shortcoming is that it does not prepare emitters to reduce their emissions as the cap lowers. Tidwell said the invisible hand of the market would help emitters figure out how to cut emissions, since the price of energy would rise due to permits. In his view, those rising prices would lead to innovations by the emitters. The hands off approach is in contrast with the vast efficiency requirements and dedicated funding for research and development provided for in the Waxman-Markey bill.
The problem with the market-driven approach is that due to the presence of the dividend returning any increased costs to electricity consumers, there will not be heightened energy costs to encourage innovation. If an upstream provider of fossil fuels, for example a coal mine, is required to purchase permits for its coal, they will in turn raise the price of that coal when they sell it to a coal-fired power plant. The power plant will, in turn, raise its rates (different states regulate their electricity sectors differently and in many cases power plants would have some constraint in their ability to immediately adjust rates). That would be tough on electricity consumers, except that each year the proceeds of the permit sales, minus a small amount for administrative costs, would be sent to them in the mail. In fact, the dividend could even be structured to be credited right to their power bill. So everyone in the supply chain is paying more up front, but that is being compensated for by higher prices for the coal mine and power plant, and the dividend for the electricity consumer. So where will the market drive for increased efficiency come from?
Maybe the reality of a steadily lowering cap will encourage someone in the supply chain to seek better efficiencies or new technology, or it could just convince them to raise prices to decrease demand. That may bring down emissions, but it probably makes less sense then serious investments in new clean energy technology and increased efficiency standards. Ironically, Tidwell criticized these type of command regulations in federal legislation, while praising California for such policies which have left California using 50% less electricity per capita than Maryland. In a way, the cap-and-dividend approach is also essentially a command regulation, in that it sets a cap on emissions but provides no tools for consumers or utilities to reduce emissions or shift to alternative energy. Waxman-Markey is not perfect, but it gets this general concept right. Congressman Van Hollen probably understands it too, which is why he has other pieces of legislation providing financing for green projects.
Tidwell also gave some credit to Maryland for having some useful policies in place. Surprisingly, he did not praise himself or his organization for their commendable work in passing some of these policies. Maryland is part of the only functioning cap-and-trade program in the United States, the Regional Greenhouse Gas Initiative (RGGI). Along with other states in the mid-Atlantic and Northeast, Maryland has a cap on carbon emissions from power plants. Two other regional plans are being developed around the country, the Western Climate Initiative and the Midwestern Greenhouse Gas Reduction Accord. But only RGGI has been put into effect. Maryland also has a renewable portfolio standard, which requires a percentage of the state’s energy generation to come from renewable sources. A renewable standard is another piece of the Waxman-Markey legislation.
A national plan is needed, but happily Maryland is not just waiting for one but continuing to move ahead with state or regional transformative programs. That’s partly thanks to CCAN and other state leaders.
Friday, September 11, 2009
Tidwell, Chris Van Hollen and Global Warming, Part Two
Thursday, September 10, 2009
Tidwell, Chris Van Hollen and Global Warming, Part One
By Marc Korman.
On a recent morning, the Bethesda-Chevy Chase Breakfast Club heard from Mike Tidwell, the founder and director of the Chesapeake Climate Action Network (CCAN).
CCAN was founded in 2002 to address climate change and its effects. When the organization began, their primary mission was one of education. As time has gone on and the general populace has learned more about climate change, CCAN has shifted to a solutions oriented mission. Tidwell points to multiple reasons the public has woken up about climate change: Al Gore’s documentary An Inconvenient Truth, Hurricane Katrina, and All-State’s decision to no longer furnish new home insurance properties for coastal Maryland due to the threat of rising seas and increased hurricanes. In Tidwell’s view, the multiplier effects of addressing climate change include improvement to the environment, reduced costs of healthcare due to better health due to cleaner air, a stronger economy, and improved national security.
Taking a page from Bethesda-resident Tom Friedman’s Hot, Flat and Crowded, Tidwell said that the proliferation of magazine articles about going green and lists telling people ten ways to be green are not enough. Transformative legislation is needed to stop climate change. Comparing climate change to civil rights, Tidwell asked if anyone told George Wallace when he stood outside the University of Alabama to prevent its integration that there were ten easy ways he could integrate. Rather, the country responded with transformative legislation such as the Civil Rights Act and the Voting Rights Act. Tidwell wants to see a similar response to climate change. Voluntary and independent action is good, but it is not enough.
Tidwell’s goals are ambitious as he looks to Congress for national action. He wants a ban on new coal-fired power plants, which according to the Energy Information Administration provide almost half of US electricity today. Although he believes the cap-and-trade proposal, known as Waxman-Markey, passed by the House of Representatives earlier this year is better than nothing, he is not enamored with it. In his view, pressure by utility companies led to a convoluted bill with lots of protections for legacy generators, is unfair to the middle class, and does not appear to be built to last. Tidwell also condemned the length of the bill, which was 1,428 pages.
Instead of Waxman-Markey, Tidwell supports Congressman Chris Van Hollen’s Cap and Dividend Act of 2009, which Tidwell happily told us was only about twenty pages. Apparently, the length of legislation has some type of relevance to its effectiveness. We will take a look at the Van Hollen bill and why Maryland is already a leader on climate change policies in Part Two.
Thursday, February 12, 2009
Clean Energy Town Hall Meeting with Congressman Kratovil
From the Chesapeake Climate Action Network:
Clean Energy Town Hall Meeting with Congressman Kratovil
Join concerned citizens, community organizations, and advocates to discuss clean energy, global warming, and other environmental issues with newly elected Congressman Frank Kratovil (1st district) and guests:
Dr. Kevin Sellner (Executive Director of the Chesapeake Research Consortium)
Bracken Hendricks (Senior Fellow with the Center for American Progress)
Rep. Steny Hoyer (5th District), Majority Leader of the House of Representatives (invited).
Contact: Keith Harrington, 240-396-1985 keith@chesapeakeclimate.org
Date: 2/18/2009
Time: 7 pm - 8:30 pm
Location: Broadneck High School
1265 Green Holly Dr
Annapolis, MD
21409
Register: http://salsa.democracyinaction.org/o/423/t/8191/event/index.jsp?event_KEY=47347
Tuesday, January 06, 2009
Chesapeake Climate Action Network Announces Possible Deal on Global Warming Bill
In an email sent to supporters this morning, the Chesapeake Climate Action Network announced a potential deal on this year's version of the Global Warming Solutions Act.
The email states:A hard-won consensus appears to be near between environmentalists, manufacturers, and union leaders concerning Maryland's historic Global Warming Solutions Act. With the state General Assembly set to begin in mid January, leaders within the Maryland climate movement spent several days in December participating in facilitated talks to work out an effective, fair agreement with union and business leaders. A final consensus agreement is expected on January 7th. The bill would mandate a 25 percent reduction in statewide greenhouse gas emissions by 2020.
The organization is holding a conference call on Thursday night to announce the details of the new bill.
Update: The Baltimore Sun has more.
