In Defense of 'Energy-Only'

Over at NRDC, David Doniger writes a last-ditch defense of a diminished, utility-only cap and trade proposal while categorically rejecting any "energy-only" legislation -- e.g. legislation lacking a cap and trade component.

Unfortunately, Doniger, NRDC (and EDF) wind up clinging onto a "cap" on carbon they have already given away while at the same time standing opposed to a new clean energy strategy that could still salvage a substantive win despite what little time remains on the Congressional clock.

A flawed case against "energy-only"

Doniger's case for rejecting any legislation without a carbon "cap" rests on this central argument:

Unless the overall Senate bill includes a cap on stationary source emissions, some energy bill provisions would actually make carbon emissions worse.

Doniger cites four examples -- policies promoting new power lines, electric vehicles, synthetic fuels, and biofuels -- that he says could potentially result in an increase in emissions absent other regulations on carbon.

Some of his examples are just plain flawed; an NRDC-sponsored report on emissions from electric vehicles directly contradicts Doniger's assertion that EVs powered by coal-fired electricity would raise emissions (in reality, even a coal-powered EV would be a marginal win from a GHG perspective). Others are more legitimate concerns; coal-to-liquids synthetic fuels should clearly be off the table from a GHG perspective, for example.

But the specter of an "energy-only" bill doing more harm than good could be addressed in several simple ways -- GHG standards could be established for qualifying biofuels, and transmissions lines qualifying for incentives or expedited siting could be required to carry a certain percentage of zero-carbon electricity, for example. If NRDC is worried about bad outcomes, they could easily push for smart fixes to these policies, rather than categorically rejecting legislation that might include critical steps forward, including expanded transmission access to renewable energy zones, a vehicle electrification push, or the promotion of advanced, non-grain biofuels.

Furthermore, Doniger inexplicably ignores the fact that the EPA is already moving forward with efforts to limit carbon pollution from stationary-sources like power plants and is set to forge ahead in the absence of Congressional cap-and-trade legislation. Even in the face of likely litigation, the resulting regulatory uncertainty surrounding new EPA regulations will put the damper on any investments in new major emissions sources for the time being, including new coal-fired power plants.

Clinging to an illusory carbon "cap"

The real nugget though is that while NRDC et al. keep rejecting any substantive steps forward that lack a "binding cap" on emissions, they long ago ceded anything resembling a hard, binding emissions cap in their negotiations with industry stakeholders and Congress critters.

The Waxman-Markey bill passed the House loaded with enough offsets to render the cap completely non-binding on covered sectors. (What's the problem with offsets? See here). The Kerry-Lieberman draft bill is the same. And any utility-sector only bill is likely to include just as many offsets, yet cover only about one-third of U.S. emissions, making matters even worse.

The truth is that we've never been debating a real, binding "cap" on greenhouse gas emissions, just an emissions target and a (pretty modest) carbon price signal. Call it "visor-and-trade" not "cap-and-trade." And with that as the bar set by "cap" and trade legislation, it is certainly possible to get even better outcomes -- faster transformation of the U.S. energy sector, faster clean energy innovation, and even faster emissions cuts -- with a new clean energy strategy.

Snatching a win from the jaws of defeat

A series of proactive clean energy policy measures still have the chance to move the ball substantively forward before time runs out this year, while avoiding major concessions such as ceding EPA regulatory authority (something NRDC et al. was happy to give up in exchange for the deeply-flawed House-passed "cap" and trade bill, a fact Doniger fails to mention in his post). And if done right, such an effort could even start building a new bipartisan clean energy consensus, positioning things for a new strategy in the next Congress that marries a low but steadily rising carbon price to raise critical revenues with a series of proactive and comprehensive investments in energy technology innovation and deployment.

Alternatively, we can keep chasing the failed USCAP strategy down the rabbit hole...

"Do no harm" is a fine guiding principle

In the end, Doniger's case for a climate/energy bill that "first does no harm" is something I can agree with wholeheartedly. Doniger writes:

[In crafting energy/climate legislation] there are some things that the Senate absolutely must avoid - things that would actually dig a deeper carbon pollution hole. The Senate bill must not include measures that increase carbon emissions, take away the laws already on the books to cut those emissions, or weaken other protections for public health and the environment.

The reality is that there are bad "energy-only" bills and good "energy-only" bills. The good ones are hardly "energy-only" at all, and will make substantive progress towards a low-carbon energy system -- even without a "cap" on stationary source emissions.

The best chance of seeing a good energy bill pass Congress this year and drive America towards a clean energy future is if climate advocates, like NRDC's Doniger and EDF's Fredd Krupp rally behind a new play call to salvage clean energy victory from the jaws of impending defeat. Time is nearly up.