Climate Legislation Showdown

This week, the U.S. Senate opened discussion of the Lieberman-Warner Climate Security Act, which would institute a system of carbon trading in which emitters would buy or sell allowances, having received an initial allotment partly for free, partly in an auction. Though the bill is not likely tp pass Congress this year and is sure to be vetoed even if it does, it's considered almost a foregone conclusion that the new Congress will enact some kind of carbon trading bill next year and that the newly elected president will sign it. McCain cosponsored a lineal ancester of Lieberman-Warner, and Obama promised in his victory speech on Tuesday night, June 3, to forecefully address the climate issue.

Precisely because it seems so clear that climate legislation is on its way, business and labor are squaring off, seeking to influence and mold the bill that finally makes it to the president's desk. Yesterday, June 4, the U.S. Chamber of Commerce sent a letter to the Senate's members saying that Lieberman-Warner "fails to preserve American jobs and the domestic economy, does little to address the international nature of global climate change, and does not sufficiently promote accelerated technology development and deployment."

Citing six macroeeconic studies (without actually naming them), the chamber--the U.S. business community's main political representative--said that on any reckoning the bill would cost the United States "a staggering amount of money." It said the bill could cause the GDP to decrease as much as 3.4 percent, and that the average annual household cost of the bill could be between $1,000 and $6,700.

Those claims are not going unchallenged. The Natural Resources Defense Council has issued a study assessing "costs and opportunities " under Lieberman-Warner arguing that higher energy costs will be offset by improvements in energy efficiency, aggressive deployment of renewables, and--starting about 2020--extensive carbon capture and storage. "Lieberman-Warner CO2 recuction tarets are achievable with mimla increase in total discounted energy system costs," the report says.

The NRDC cooperated on a second report with CERES--an organization representing major institutional investors with assets that would be affected by carbon regulation--and two top California utilities. The report, an analysis of how the country's 100 largest electric utilities would be affected by carbon legislation, argued that auctioned allowances would provide funds for energy efficiency programs, clean energy technologies, and consumer benefits offsetting higher electricity costs.

On Tuesday this week, June 3, University of Massachusetts economists also issued a report taking issue with the chamber's claims. "Job Opportunities for the Green Economy," an analysis done in cooperation with the United Steelworkers and the Center for American Progress, evaluates six climate-fighting strategies in terms of how many workers in existing occupations could find new opportunities. For example, more rapid deployment of high-performance wind turbines could provide work for the country's 168,000 sheet workers. Affordable solar energy will increase employment for 150,00 "electrical engineers"--technicians, presumably, not, sorry to say, the engineers who read and support IEEE Spectrum magazine!

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