Published by National Journal at the Energy & Environment Expert Blog
By Teryn Norris
When future scholars document the history of global warming, one of the watershed years will almost surely be 2010. For over a decade, the primary goal of U.S. climate policy advocates has been to establish a strong carbon pollution cap and a binding global emissions treaty. Armed with large war chests and major electoral victories, climate advocates had one of the best opportunities to achieve these goals.
This agenda has collapsed. In the aftermath of the Copenhagen climate negotiations and recent developments in the Senate, it is clear that carbon caps in the U.S. and globally will not happen for the foreseeable future. Meanwhile, the IEA projects global CO2 emissions will skyrocket 40% above 2007 levels by 2030, and the EIA predicts China’s emissions will more than double over the next 25 years – which would make its emissions greater than the rest of the world combined.
What happens next? The upcoming lame-duck session in Congress could be one of the last opportunities for national reform before 2013. There are a number of incremental proposals worth pushing, from the American Clean Energy Leadership Act, to Senator Alexander and Senator Dorgan’s Electric Vehicle Deployment Act, to Senator Kerry’s latest Clean Energy Technology Leadership Act. Some still hope for a Hail Mary lame-duck pass on cap and trade, but when asked whether it could be revived, Senator Reid recently said, “It doesn’t appear so at this stage. It doesn’t have the traction that a lot of us wish it had.”
But none of these alternative proposals contain one of the most critical elements for reform: a dedicated revenue stream to fund major federal investment in clean energy research, development, demonstration, deployment, and manufacturing, as well as infrastructure and workforce development. The American Energy Innovation Council, including business titans like Bill Gates and John Doerr, has called for an increase of $11 billion per year in federal clean energy RD&D alone – an idea that could attract serious bipartisan support after mid-term elections. This proposal enjoys broad support from groups like Breakthrough Institute, Brookings Institution, Third Way, ITIF, and many others.
These investments are critical for ensuring the clean energy accomplishments of ARRA aren’t imperiled as public investment falls off a cliff. They’re also critical for establishing U.S. competitiveness and driving down the price of clean energy technologies through innovation. If the price gap between dirty and clean energy technology isn’t bridged quickly, the world has little chance of avoiding climate destabilization as countries like China and India develop at break-neck speed.
Cap and trade could have originally provided this revenue stream, but now that it’s off the table, we must find an alternative. Potential sources include reduced fossil fuel subsidies, offshore drilling royalties, an oil import fee, a small fee on fossil fuel electricity, or even a low carbon tax beginning at $5 per ton. Another source outside the energy sector could be a small fee on financial transactions. This idea has been proposed as a way to fund the $100 billion international climate assistance package, and could be applied domestically to reduce speculative trading and support a new growth industry.
Meanwhile, the possibility of achieving a binding global emissions treaty at the upcoming UN climate negotiations in Cancun is all but gone. The new chairwoman of the United Nations climate treaty body recently put it this way: “I do not believe we will ever have a final agreement on climate change, certainly not in my lifetime.” We must therefore put more emphasis on alternative forums like the Clean Energy Ministerial and Major Economies Forum on Energy & Climate. Instead of endlessly debating emissions targets and timetables, the world’s technology policy leaders can break the logjam by identifying specific technical hurdles, creating coordinated technology roadmaps, and mobilizing the resources for rapid implementation.
Beyond the immediate future, climate and clean energy advocates should take the opportunity to fundamentally rethink our strategy. Will we abandon the prospect of major federal reform, or develop a stronger approach for the next Congress? And will we continue focusing on carbon caps, or will we adopt a new approach focused on technological innovation to make clean energy cheaper? These are just some of the questions that will define the next agenda – and our energy and climate future.
Teryn Norris is president and founder of Americans for Energy Leadership.