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Election 2008/Global Warming
A New Leaf
If the feds keep fiddling while the planet starts kindling, state efforts to control global warming may offer the best chance for changing the direction in Washington.

 

Gridlock is a fact of life in Washington, D.C., like lobbyists or marble monuments. For every bill that ekes into law, a dozen others die a quiet death, and policy issues often fester for decades before getting resolved. Even by that standard, though, the stalemate over global warming has reached the point of absurdity.

Just look at what happened earlier this year, when Democrats in Congress tried once again to put together a small package of tax incentives for renewable energy and efficiency upgrades. As a means of curbing fossil-fuel consumption, it was a tiny step. But Senate Republicans blocked the package anyway. The sticking point, it seems, was that the measure would have been paid for by repealing a few tax breaks for oil companies, worth about $1.7 billion per year—or 1 percent of the industry’s profits last year. And that wouldn’t do. Even John McCain, one of the few Republicans who actually considers global warming a problem, opposed the package.

This all comes at a time when dithering over climate legislation looks downright suicidal. Climate scientists are increasingly worried that the clock is winding down, that unless the world very soon gets on a path to reducing its greenhouse-gas emissions by 50 percent or more below 1990 levels by mid-century, it may prove impossible to stop runaway warming. If that happened, millions would be at risk from heat waves, droughts, and floods; rising sea levels would swamp the coasts; whole ecosystems could be wiped out. Yet President George W. Bush has urged a wait-and-see approach, while Congress can’t even pass the smallest piece of climate legislation (save for a long-overdue tightening of fuel-economy standards for vehicles last December).

Still, the situation is far from hopeless. As Supreme Court Justice Louis Brandeis once famously observed about the United States, in the absence of federal action, “a single courageous state may, if its citizens choose, serve as a laboratory, and try novel social and economic experiments.” When it comes to climate change, many states are doing just that, taking steps to curtail their carbon emissions. It makes sense: After all, 34 of the 75 largest emitters in the world are states in the Union. And many governors are now hoping that if enough states start moving, the federal government will have to follow suit. “A federal–state partnership is the only way we can get the job done,” declared 18 governors in a statement signed at a landmark conference on climate change, held in April at Yale University. Indeed, if the feds continue to fiddle while the planet starts kindling, state efforts on global warming may offer the last, best chance for breaking the climate standoff in this country.

 

California has historically led the nation on environmental policy—Los Angeles created the country’s first air pollution agency back in 1947—and climate is no exception. In 2006 Governor Arnold Schwarzenegger emphasized his green bona fides to win reelection, and the following year he signed into law the country’s most stringent climate bill, mandating an 80 percent cut in California’s greenhouse-gas emissions from 1990 levels by 2050. The state has also tinkered with a variety of carbon-cutting strategies, from tough energy-efficiency standards for new buildings to the city of Berkeley’s innovative scheme to help homeowners finance the hefty upfront cost of solar installations. (Another California innovation, signed into law this year, is the “feed-in tariff,” requiring utilities to purchase renewable power from customers at above-market rates—a policy that has had great success in nurturing renewable-power markets in countries like Germany and Denmark.)

Increasingly, other states are following California’s lead. “With the overwhelming positive response [Schwarzenegger] got—being on the cover of Newsweek twirling a globe—all that stuff was good politics,” recalls Terry Tamminen, Schwarzenegger’s former environmental secretary, who now travels the country convincing other governors to adopt climate measures. “So as I went around to other states, doors flung open, politicians were asking me, ‘What’s the secret? How do I get on the front cover and hailed by environmentalists?’ ” One of Tamminen’s biggest converts was Florida Governor Charlie Crist, a Republican who came into office in 2007 and saw that insurance companies in his state were nervous about the possibility that global warming could lead to more intense hurricane seasons. Tamminen showed Crist a map of states taking action on global warming, which had a gaping blank spot in the Southeast. “He saw an opportunity for leadership,” recalls Tamminen. In July of last year Crist signed a series of executive orders to reduce greenhouse-gas emissions 40 percent by 2025 and created a team to follow through.

State climate-change bills are now sprouting up across the country like toadstools on a wet log. Thirty-nine states have signed on to the Climate Registry, which will enable them to take the crucial first step of simply measuring CO2 emissions. At least 26 states now have standards requiring utilities to get a chunk (usually between 10 percent and 20 percent) of their electricity from renewable sources within a decade or two. At least 24 states have issued climate-action plans, laying out a roadmap for reducing emissions; an additional nine are hashing out such plans. A growing handful of states, including New Mexico, Minnesota, and Hawaii, have followed California by making their targets legally binding. And states are trying innovative new approaches, such as figuring out ways to “decouple” the price of electricity from how much energy is actually used, so that utilities have an incentive to conserve.

Although this seems like a piecemeal approach to a colossal problem, that’s part of why states have succeeded. Tamminen observes that one reason many states haven’t been afflicted by the legislative paralysis that’s plaguing Congress is that they don’t try to ram through one big climate bill all at once. “If you look at the wedges”—referring to the different sectors of the economy that can be decarbonized—“you tackle each one individually, with six or eight or ten bills,” says Tamminen. In Florida, Crist was unable to pass a comprehensive bill similar to California’s Global Warming Solutions Act through the legislature, so instead he passed an energy bill promoting renewables and efficiency. “If you score the greenhouse-gas benefits of that bill, he’s halfway to the goal,” Tamminen notes. “Sure, it’s sleight of hand, but that’s what it takes to get it done.” These smaller measures add up: Nationwide, state renewable-electricity standards will force utilities to add 60 gigawatts of renewable capacity by 2025, equal to 15 percent of the projected growth in electricity, according to the Lawrence Berkeley National Laboratory. And the Center for Climate Strategies has estimated that if all 50 states simply adopted policies similar to those in place in 12 “leadership” states—such as Arizona, North Carolina, and New York—the United States could slash emissions 33 percent by 2020 and save about $25 billion in the process.

Another reason states are succeeding where Congress has stalled is that the partisan rancor over climate change isn’t always as fierce as it is in Washington. Jim DiPeso, policy director for Republicans for Environmental Protection, explains that on the federal level, many Republicans just toe the party line and ignore climate issues altogether. “But unlike senators or congressmen,” he adds, “governors are responsible for basic services, water supplies, public health system. Look at Florida—anyone who can look at a map can see that it’s uniquely vulnerable to rising sea levels. A governor like Crist can’t twiddle his thumbs.” (Granted, there are still plenty of conservative states, like Georgia, that aren’t apt to enact much in the way of climate legislation anytime soon.)

Meanwhile, since a solitary state can make only so much headway on a global issue by itself, interstate alliances are now cropping up. Most notably, 10 states in the Northeast have agreed to the Regional Greenhouse Gas Initiative (RGGI), a regional cap-and-trade system for CO2 emissions from power plants. California is exploring ways to link up to the RGGI, while similar regional accords are being negotiated in the Midwest and West. “States are aware that a federal regulatory process will eventually kick into gear,” says Dan Esty, an environmental law professor at Yale who helped organize the April governors’ conference. “So they’ve decided, even if it requires adjustment, there are benefits to get up and running—a first-mover’s advantage.”

At the same time 850 mayors from both parties across the country, representing some 80 million Americans, have signed the U.S. Conference of Mayors Climate Protection Agreement, nominally committing their cities to curbing their emissions, greening their buildings, and tweaking development patterns to reduce sprawl and energy use. The city of Austin, a liberal stronghold in the deep-red state of Texas, plans to make its municipal facilities carbon-neutral by 2020, and its mayor, Will Wynn, has begun exploring plans to replace its fleet of vehicles with plug-in hybrids.

“You have a bunch of mayors coming at this for different reasons,” says Wynn, who chairs the energy committee for the U.S. Conference of Mayors. “But they’re all getting to the same spot: How do we reduce energy consumption? And that’s a conservative message—lots of my Republican colleagues like that idea.” One of them is Patrick McCrory, the Republican mayor of Charlotte, North Carolina, who helped draft the climate agreement and has pushed transit projects in his city over the opposition of the right. He explained his conservative approach to members of Congress last year: “Instead of spending time on debating the concept of global warming and climate change, as mayor, I focus on the merits of clean air, clean water, and open space.”

Like many environmental issues, global warming requires collective action that’s most effectively directed by governments, not individuals. But some private companies are doing their part, too. Wal-Mart has tried to spruce up its image by pursuing various green initiatives, from marketing low-energy compact fluorescent lightbulbs to demanding that its suppliers disclose their carbon output. Starbucks has committed to building stores that are 25 percent more energy efficient. Exelon, an electric utility in Illinois and Pennsylvania that relies heavily on nuclear power, has tried to stay ahead of the curve by reducing its greenhouse-gas emissions and encouraging its suppliers to do so.

Meanwhile, across the country, activists from Georgia to Wyoming are agitating to make sure that plans for new CO2-spewing coal-fired plants never leave the drawing board. (Some state governors, like Crist and Kathleen Sebelius of Kansas, have joined in, forcing state utilities to shelve plans for new coal plants.) Partly as a result, in February three major lenders, Citigroup, J.P. Morgan Chase, and Morgan Stanley, announced that they would closely scrutinize the risks associated with investing in new coal plants that can’t comply with whatever environmental legislation might be in store.

 

It’s easy to exaggerate how much states have accomplished, or can accomplish on their own. Even the RGGI will cover only electric utilities—the source of just 33 percent of all emissions in the United States. And many states have been slow to implement their plans. In May, for instance, the Connecticut legislature decided to pass even tougher new mandates, in part because its initial emissions targets weren’t being met.

Even more important, however, state-level actions are pushing politicians in Washington to take action of their own. “Congress and the federal government are learning how to turn local policies into global solutions from the leaders in state and local government,” says Edward Markey, a Massachusetts representative who chairs the House Select Committee on Energy Independence and Global Warming. At times the pressure is direct: The 18 governors at the Yale conference all pledged to lobby both Congress and the presidential candidates to act on global warming. And in Massachusetts v. EPA, a lawsuit brought by 12 states against the Environmental Protection Agency, the U.S. Supreme Court ruled in 2007 that the federal agency had the authority to regulate greenhouse gases under the Clean Air Act, leading to calls for Congress to step in before the EPA took matters into its own hands. (The current administration has restrained the agency from acting on the ruling, but that may last only until Bush steps down next year.)

At other times, the pressure is more oblique. As state rules get pieced together, often haphazardly, many companies have become convinced that it would make more sense to push for a single federal standard rather than deal with a messy state-by-state approach. The RGGI, for instance, is nonbinding, and states can technically pull out at any time—as Massachusetts did in 2006 as its governor, Mitt Romney, was gearing up for the Republican presidential primary—a fact that can create uncertainty for utilities. Meanwhile, Scott Segal, head of the Electric Reliability Coordinating Council, an industry group, notes that the fact that the RGGI applies only to a few states will create headaches when many consumers try to obtain electricity from nonparticipating states like Pennsylvania—a problem known as “leakage.” Likewise, companies trying to meet renewable-electricity standards are often limited by being restricted to particular states rather than going to where the most cost-effective renewable sources are. “We have incentives to make things happen in Virginia, but there are only so many ridgetops in Virginia [for wind power],” says Jim Martin, a senior vice-president for business development and generation construction at Dominion Resources Inc.

That explains why, in a 2006 speech at the National Press Club, John Hofmeister, president of Shell Oil, embraced federal climate action. “We cannot deal with 50 different policies,” Hofmeister said. “We need a national approach to greenhouse gases.” Shell and 25 other companies—including 19 that are listed on the Fortune 500 list, such as Duke Energy, Exelon, and General Electric—along with a handful of environmental groups, have formed the United States Climate Action Partnership (USCAP) to push for a nationwide cap-and-trade system that would reduce greenhouse-gas emissions 60 percent to 80 percent below current levels by 2050.

There’s precedent for this: In the 1980s, after states had been passing a jumble of different efficiency standards for household appliances, industry groups got together and successfully lobbied President Ronald Reagan to sign into law uniform national standards—something he had earlier vowed never to do.

As that pressure mounts, environmentalists are honing their arguments at the state level, in preparation for an eventual showdown with polluters in Congress. Jim Marston, who oversees the Environmental Defense Fund’s (EDF) state-level initiatives, notes that he’s learned an array of lessons over the years. “Number one, you’ve got to have the ability to respond quickly to industry groups,” he says. “Also, what’s very useful is thinking about the co-benefits of the policy you’re doing. You can’t only talk about saving the planet—that’s important, but it helps politically to offer other reasons for doing this.” In Connecticut EDF lobbied for stricter CO2 controls on automobiles by touting the public health benefits for kids living near highways. And across the country environmental groups are learning how to talk up the fact that climate legislation can create “green-collar” jobs—everything from manufacturing wind turbines to installing solar panels—a theme that could resonate at the federal level.

 

That still leaves the big question: Will Congress ever act? The odds certainly look better than they did in 1997, when the Senate effectively denounced the Kyoto Protocol on a 95–0 vote. In 2003 Senators Joe Lieberman and John McCain forced a vote on an economy-wide cap-and-trade bill that, though defeated, garnered a surprising 43 votes. More recently Lieberman and Virginia Senator John Warner cosponsored an even stronger bill aiming to reduce emissions by 60 percent to 67 percent from today’s levels by mid-century—not as strong as what many climate scientists are urging but something that would have been unthinkable just five years ago. (In June, however, Lieberman–Warner failed to reach the Senate floor after being blocked on a procedural vote by Republicans.) Many Democrats, including Barack Obama, are now calling for an 80 percent reduction below 1990 levels by 2050.

With the debate evolving so rapidly, it’s difficult to predict what legislation Congress might end up passing, though cap and trade looks to be a likely outcome. The details, however, remain contentious. Green groups are paying particularly close attention to how the system doles out its pollution permits. The Sierra Club decided to oppose the
Lieberman–Warner bill because it would have handed out too many permits for free—bestowing a windfall on polluters. By contrast, a system in which the government auctions off the vast majority of its permits would be better able to avoid the distortions that have plagued Europe’s emissions-trading regime. It would also let Congress raise funds that could be used either to assist low-income Americans hurt by higher energy prices or to invest in clean energy and efficiency. (The RGGI states have taken this approach and often get credit for tilting the debate in this direction.)

One issue that receives little press is the fact that after decades of inaction the EPA has little expertise in regulating greenhouse gases. “The EPA has almost the same number of staff it had when it was created 40 years ago—but now has a lot more responsibility,” says Barry Rabe, an environmental policy professor at the University of Michigan. “Suddenly we’re going to hand it a sophisticated new bill with no new resources for the agency?” Others sound even more pessimistic. Allan Zabel, an EPA lawyer who has worked with various emissions-trading regimes since the early 1990s, thinks the agency would be overwhelmed in any case. “It’s not that the EPA uniquely lacks the ability to police a cap and trade,” he says, “it’s that the complexity and the ability to game these systems means that any regulatory agency would have a difficult time.” Zabel and Laurie Williams, another EPA attorney, have begun promoting an alternative plan: a simple, easy-to-levy fee on all carbon.

Meanwhile, some environmentalists argue that we can’t wait for cap and trade to slowly work its magic, and are contemplating more immediate action. James Hansen, NASA’s top climate scientist, has argued that there is no hope of averting catastrophic climate change unless countries impose a moratorium on any new coal-fired plant that cannot safely capture and store its carbon (a technology that’s still in the incubation stage in the United States). In the House, Markey has introduced a climate bill that would, among other things, require all new plants to sequester their CO2 emissions within a certain time frame. As Markey has put it, “If we lose control of coal, we will have lost control of the climate.”

 

Ultimately, though, climate legislation will be only as well crafted as political reality allows it to be. James Inhofe, the Oklahoma Republican who once deemed global warming “the greatest hoax ever perpetrated on the American people,” has vowed to filibuster any climate legislation in the Senate, so the Democratic majority will need to cobble together 60 votes for any given bill. With the GOP largely intransigent, that means carving out provisions and loopholes to entice, for instance, coal-state Democrats like North Dakota’s Byron Dorgan and Montana’s Max Baucus. In the debate over Lieberman–Warner, the bill’s sponsors debated whether handouts for the nuclear industry could peel off fence-sitters like South Carolina Republican Lindsey Graham. “I think nuclear will help with some of them,” says one Senate aide. But it’s a delicate task: adding giveaways to attract votes without weakening the bill too much and losing liberals—a needle McCain and Lieberman failed to thread in 2005 when they stuffed their climate bill with nuclear subsidies and lost four votes.

Congress will also have to overcome hostility from industry. Many trade groups, such as the National Association of Manufacturers and the U.S. Chamber of Commerce, are flatly opposed to strong cap-and-trade legislation. The same goes for the coal industry, which has asked instead for subsidies to research and develop low-carbon alternatives. In the other corner sit USCAP and other companies that would like to see strong federal cap-and-trade legislation.

Even here, though, corporate support can be fickle. Duke Energy, a USCAP member nominally in support of cap and trade, opposed Lieberman–Warner on the grounds that it would hike energy prices to unacceptable levels. Most companies in favor of a cap will jockey for legislation only insofar as they benefit. And the stakes can be astronomical: A recent report by Ceres, an environmental shareholder-activism group, found that changes in how cap-and-trade permits are allocated could mean a difference of hundreds of millions of dollars to major utilities like Exelon. “It’s classic rent-seeking behavior,” says Segal. “Companies will support different approaches depending on the composition of their assets.” An auction-heavy approach, meanwhile, seems likely to antagonize the greatest number of industry players, although Ian Bowles, Massachusetts’s secretary of energy and environmental affairs, says that when his state took this tack under the RGGI, the corporate backlash was surprisingly muted.

Then there are the voters. In April a Harris poll found that 63 percent of respondents wanted a new president to take action on climate change soon after taking office. And during the past few years mainstream evangelical groups and hunting organizations have become increasingly vocal about global warming. Some environmentalists think that this sort of pressure could start to influence conservative politicians. “Lindsey Graham isn’t going to be swayed by a bunch of college kids,” explains Larry Schweiger. president and CEO of the National Wildlife Federation, which has corralled 670 outdoors groups into backing strong climate legislation. (Although, Schweiger notes, the growing campus movements will be important in their own right.) Meanwhile, Republican pollster Whit Ayres has been warning GOP politicians to stop stonewalling on the issue: “Denial is simply not an option. I’m sorry—it makes us seem way out to lunch.”

At the same time, in the face of rising gas prices and an economic slowdown, many Americans may not be too keen on making further sacrifices to prevent a climate catastrophe that’s decades in the future. (A July Pew poll found that most Americans were starting to favor drilling over protecting the environment as an answer to oil supply shocks.) Many opponents of climate action have tried to exploit those fears—last fall the Chamber of Commerce ran ads warning that Lieberman–Warner would impoverish the country by drastically raising energy prices, with one spot showing a family cooking breakfast by candlelight. Such charges are likely overblown—a recent EDF analysis of five respected economic models from academic and government groups found that cap-and-trade policies like Lieberman–Warner would cost only about three-hundredths of a percentage point of the country’s GDP per year. (The size of the U.S. economy, in other words, would hit $23 trillion in April rather than January of 2030.) But ultimately, the strongest tonic, again, may come from the states: If climate initiatives like the RGGI can get under way without causing much economic friction, environmentalists will have a strong counterargument at hand.

 

In the end the most important factor of all may be who sits in the White House next year. “The biggest game changer is having the president on your side,” says Daniel Weiss, the director of climate strategy at the Center for American Progress. “Don’t underestimate the power of that bully pulpit.” All indications are that either John McCain or Barack Obama would use that pulpit very differently than George Bush has. McCain frequently lets Republican audiences know that he believes climate change is real, and he told Audubon that it’s “one of the most important issues facing our nation and the world today.” In May he announced his support for a cap-and-trade regime to curb emissions 60 percent below 1990 levels by mid-century. Obama has gone even further, supporting an 80 percent reduction below 1990 levels by 2050, a full auction of credits, and a variety of additional measures like national renewable-electricity standards. At an April forum at the National Press Club, Obama’s top energy adviser, Jason Grumet, said that if elected president, Obama would make climate policy a top priority and begin attending talks for a successor treaty to Kyoto before he’s even sworn into office.

Of course, the country has been led down false paths before. Back in 2001 EPA Administrator Christine Todd Whitman went on CNN to declare that George W. Bush was “clear that the science was good on global warming” and believed in curbing CO2 emissions—only to get overruled a few days later. And the current candidates are hardly flawless: Obama has often favored the coal industry, as when he voted for a massive energy bill in 2005 that lavished handouts on fossil-fuel interests. McCain, meanwhile, has a spotty environmental record in his 25 years in Congress and, more recently, has both opposed efforts to kick-start the renewable-energy industry and withheld his support from Lieberman–Warner, arguing that it needed stronger support for nuclear power. Still, it seems far-fetched to believe that either candidate would do what Bush did in 2001, when he flatly reversed his campaign pledge to regulate greenhouse gases from power plants. (For a more detailed look at the McCain and Obama environmental records, see “Face-Off.”)

A more hopeful analogy might be 1989, when Ronald Reagan was departing from the White House. At the time environmentalists were lamenting the fact that acid raid had been allowed to continue unchecked for eight years, thanks to stonewalling by both the president and industry groups. “The acid rain problem has gotten dramatically worse,” seethed Senator Timothy Wirth of Colorado. “We have thousands of lakes that are dead, d-e-a-d, dead. But they say we ought to study it more.” Yet just one short year later, Reagan’s successor, George H.W. Bush, signed into law a landmark cap-and-trade bill curbing the sulfur emissions from power plants that were causing acid rain; by 2002, sulfur dioxide levels were down dramatically. It’s a reminder that even in Washington, the fiercest of stalemates won’t last forever.

Bradford Plumer is an assistant editor at The New Republic.

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