A POLITICAL COMMENT ON ...
A Change in Climate in Congress: To Act or Not To Act
The nascent 110th Congress has a new Democratic majority in the House and the Senate, and among the top priorities of both the majority and many in the minority is global climate change. With the general public, state and local governments, and even industry calling for some form of federal action on this issue, Congress is beginning to consider what should be done and how it will affect the economic engine of the United States, which is driven in large part by our energy supply and demand.
In their first month in office, Democrats formed new committees and subcommittees that focus on climate change and are holding more hearings to consider how to move from a low-cost energy market to a low-carbon energy market. At the end of January, the Senate Environment and Public Works Committee held a hearing entitled “Senators’ Perspectives on Global Warming,” in which 33 senators testified and most called for action on climate change.
Many senators cited the newly released report by the Intergovernmental Panel on Climate Change and other assessments as sufficient evidence for policy action. The recent “call on the federal government to quickly enact strong national legislation to require significant reductions of greenhouse gas emissions” by the U.S. Climate Action Partnership, an alliance of business and environmental groups, is another cited example of the disparate groups that are working together.
To answer the public’s call to action, Congress decided to try taking small steps through a series of targeted bills rather than trying to mandate a broad national policy in one large piece of legislation. Among the climate change bills introduced in January, proposed efforts toward direct or indirect reductions in greenhouse gas emissions included varied mechanisms, such as increasing vehicle efficiency standards, developing a market-based system of cap and trade for emissions, and amending the Clean Air Act to include carbon dioxide as a regulated pollutant.
In other bills, policymakers proposed increasing the use of cleaner alternative fuels and enhancing renewable fuel development. Still others proposed eliminating tax incentives for oil companies, adding an excise tax on non-alternative fuel vehicles, or restricting price gouging of energy resources.
Senators at the hearing and other members of Congress have expressed concerns about the economic impact on industry and consumers that even these small steps would have. Indeed, Congress must face the difficult task of applying proposals that would directly impact market prices, taxes and federal incentives. The bills are not about establishing some new, large government program that taxpayers would pay for but be less aware of — lost in the annual few trillion dollar budget — but instead, the bills would call upon producers and consumers to pay more of the real costs for their energy use on a daily to weekly basis.
But what are the real costs of transitioning from a low-cost energy market to a low-carbon energy market? Who should determine the costs and how should the costs be distributed? While the public has become more united in calling for action, their reasons remain variable and include business needs for uniform regulations and stable markets, environmental interests in protecting ecosystems, military interests in enhancing energy security to mitigate conflicts, and even faith-based interests in our moral obligation to protect the planet.
Disparate reasons and uncertain outcomes make policy formulation difficult. Congress must consider what the public values the most and find appropriate solutions for distributing costs fairly without significantly hindering the economy.
Regardless of the federal quandary, states and local governments are already moving forward on policies to reduce greenhouse gas emissions by distributing costs to producers and consumers in their jurisdictions. A new California law sets a mandatory cap on carbon pollution, including a 25 percent reduction from projected levels by 2020, and Gov. Arnold Schwarzenegger’s Executive Order aims for an 80 percent reduction in greenhouse gases from 1990 levels by 2050.
Because some state and local governments are taking action, Congress will need to set some federal standards in the near term. The nation can ill-afford a hodge-podge of regulations and policies on climate change across the country. Nonetheless, congressional leadership alone will not solve the problem. It will require the cooperative and coordinated help of industry, state and local governments, and consumers. The 110th Congress, by its action or inaction, will be the first of many congresses to begin to grapple with the political and economic complexities of climate change. And the consumers and businesses now are just the first wave of people to face the challenge of paying for those changes.