It’s quite a feat getting 32 business and environmental groups to agree on a proposal for creating a U.S. climate change law, as the United States Climate Action Partnership claimed to do this past week. But it may be getting that many people on the same page is just the easy part.
| Climate change policy: some see blue, some see green, others see red.
Companies ranging from Houston’s own ConocoPhillips to GE to the Environmental Defense Fund gathered first in a press conference and then before the first meeting of the House Energy and Commerce Committee under Rep. Henry Waxman to announce their plans for a CO2 cap-and-trade system last week.
In a nutshell the group supports a mandatory cap-and-trade system under which CO2 emissions from oil refineries, power plants and other industrial operations are limited by a slowly lowered cap. The firms can buy and sell extra allowances through a market system. U.S. CAP supports lowering emissions to 58 percent of 2005 levels by 2030 and 20 percent of 2005 levels by 2050.
“The fact that we got this coalition to coalesce around a set of choices I think is impressive,” said Jeffrey R. Immelt, chief executive of General Electric. “Most businesses prefer to make investments with certainty about what regulations are going to be in place.”
But not everyone is thrilled with the plan. The Union of Concerned Scientists doesn’t like the part of the proposal that involves giving away about half of the pollution allowances (something President-elect Obama has said he is against). And they want the group to do more:
“…. they should go further by actively supporting provisions in cap-and-trade legislation to allocate significant funds for programs that preserve tropical forests and deploy clean technology overseas, as well as to help the most vulnerable countries cope with the mounting impacts of climate change.”
Illinois Republican John Shimkus sounded just plan angry about the plan, vowing to “hold accountable” any Democrats from big coal and oil-producing states who vote in favor of cap and trade. He called it “a shell game designed to hide” the true costs of regulation from consumers.
And Rob Shapiro, who was undersecretary of commerce under President Clinton and is chairman of Sonecon, an economic advisory firm, told the Washington Post, “Cap and trade introduces enormous volatility in the price of permits.” Moreover, he said, “cap and trade is so complex that it allows a lot of mechanisms for gaming the system.”
Exxon Mobil CEO Rex Tillerson said recently he’s in favor of a tax on carbon over cap-and-trade because it’s more transparent, and even ConocoPhillips CEO James Mulva seemed ambivalent about cap-and-trade when pressed on it a day before the announcement during a speech.
“Both can work,” he said. “The devil is in how they are designed.”
Even one of the original members of the US CAP, the National Wildlife Federation, dropped out rather than endorse the final plan. In a statement the group called Climate Action Partnership “a welcome, strong force for action,” but said that it would independently try to “enact a cap-and-invest bill that measures up to what scientists say is needed and makes bold investments in a clean energy economy.”
In other cap-and-trade related news …. The University of Houston’s first carbon trading class starts up next week, a graduate level course being team taught by professors from the business school and law center. And on Jan. 22 and 23 the International Emissions Trading Association will hold a workshop here in Houston.