Beyond the eventual success or failure of any bill overhauling the American health care system, another battle looms in Congress: climate change.
The passage of legislation to limit heat-trapping carbon emissions poses the second great challenge for Democrats, many of whom campaigned last year with promises to take action against global warming. In December, President Barack Obama will head to a United Nations climate summit in Copenhagen, Denmark, and the successful passage of a U.S. climate change bill will allow him much firmer standing in any international agreements.
Yet the lead effort to emerge out of Congress so far, the so-called “cap-and-trade” bill, sponsored by Democratic Congressmen Henry Waxman of California and Edward Markey of Massachusetts, is already generating opposition in Montana – and some of it is coming from the left.
In addition to energy utilities voicing objections to the bill, some prominent left-leaning voices on energy policy, including the Montana Environmental Information Center and Democratic Public Service Commissioner Ken Toole, have come out against it. Gov. Brian Schweitzer, meanwhile, said he is waiting to see what final climate change bill emerges from Congress, but conceded he has “some concerns” with the Waxman-Markey legislation.
The bill, which passed the House 219-212 in June, would impose a cap on greenhouse gases, like CO2. Companies that emit greenhouse gases, like utilities and power companies that burn fossil fuels, would be required to purchase credits equal to the emissions they’re allowed under the cap. Those companies that emit less CO2 than their allowance could sell or trade their excess credits, thus setting up a carbon market.
Over the last several weeks Montana’s two largest utilities, NorthWestern Energy and Flathead Electric Cooperative, have issued statements warning of the hazards posed by the Waxman-Markey bill in its current form. NorthWestern enclosed a newsletter in August bills saying the legislation could raise energy rates by as much as $225 per year for homeowners, and as much as $800 annually for businesses.
A statement issued by Flathead Electric’s board of trustees said they were concerned the co-op would be unduly penalized for the carbon-emitting natural resource investments it would have to make in order to provide backup energy for renewable sources that provide variable output, like wind power.
“These higher prices will show up not just in electricity bills or at the gas station, but in every manufactured good,” officials at Flathead Electric said. “The costs of implementing such measures would be higher than the value of the environmental damage they may prevent.”
The NorthWestern newsletter reportedly incensed some conservation groups who support a clean energy bill, with the Sierra Club’s representative in Missoula, Paul Shively, disputing that cap-and-trade legislation would necessarily be bad for NorthWestern’s customers. Cap-and-trade legislation also enjoys support from the Climate Action Partnership, a coalition of corporations and national conservation groups that includes BP America and ConocoPhillips, as well as the Natural Resources Defense Council and The Nature Conservancy.
But the Montana Environmental Information Center, perhaps the most influential and active environmental organization in the state, does not support the Waxman-Markey bill. Kyla Wiens, energy policy advocate for the MEIC, said her organization prefers an alternate plan known as “cap-and-dividend,” in which a cap is set on carbon emissions and polluters must buy emission credits at market cost, but the revenue from these sales is then distributed to the American public to offset any increase citizens may see on their power bills.
“This idea of cap-and-dividend, in our minds, is much more simple and also much more effective,” Wiens said. “We’re trying to raise awareness that there are other options out there besides just cap-and-trade.”
Cap-and-dividend advocates argue their system helps the utility customer, where the Waxman-Markey bill, at more than a thousand pages, has been so compromised by industries cutting deals to award themselves discounted emissions credits that such legislation ultimately won’t be effective at all.
“We definitely don’t think that it’s better than nothing,” Wiens said. “The cost of inaction is much more than the cost of action, but we need to pass something that’s meaningful.”
Toole, for the most part, agrees with Wiens. Several months ago he began work on a guest column to submit to newspapers in support of cap-and-trade, but said as he researched the Waxman-Markey bill, he realized he could not support it.
“The problem now is there is a lot of game-playing going on,” Toole said. “It is not clear at all how the end-of-the-line guy who is on the hook is going to be able to pay these increased costs.”
He recently distributed a column to newspapers throughout the state in support of cap-and-dividend as a better option, chiefly because it would benefit utility customers, as opposed to industries that had a hand in crafting the Waxman-Markey legislation.
“It’s a much more fair system, it helps the middle class more and it’s simple,” Toole said.
All of which sets up a politically arduous future for Waxman-Markey as the Senate takes it up, and other lawmakers introduce carbon control bills of their own. Republicans have largely opposed any climate change legislation. (U.S. Rep. Denny Rehberg, R-Mont., voted against Waxman-Markey.) So with resistance from the left and Republican opposition, what are Waxman-Markey’s chances?
“I think it’s in big trouble and I think everybody knows it’s in big trouble,” Toole said. “If large industrialists cut a deal, there will be no public support for this.”
In a July appearance on HBO’s “Real Time with Bill Maher,” Gov. Schweitzer, considered a leading Democratic voice on energy issues, startled the liberal host when he called cap-and-trade “the wrong approach.” A subsequent piece in The American Spectator questioned whether Schweitzer’s stance on cap-and-trade had shifted from when he joined Montana in the Western Climate Initiative, which sought to set up a cap-and-trade system among Western U.S. states and Canadian provinces.
In an interview last week, Schweitzer clarified his position, saying he “categorically” believes gasses produced by humans, like methane and CO2, were causing climate change and the U.S. needs to take action to reduce emissions of these gasses. But then added: “Do I believe that the carbon cap-and-trade system is the best proposal? The answer is no.”
As for Waxman-Markey, Schweitzer said, “I have some concerns with it” and that he hasn’t “been able to find anyone who can understand” the bill.
But Schweitzer would not speculate on the political prospects of Waxman-Markey’s passage, saying only that the bill is sure to be altered by the Senate and eventual conference committees, which could result in a much different bill. Nor did the governor say he backed cap-and-dividend. Instead, he said he would like to see some type of policy mechanism where fees on carbon emissions were used to develop new technologies dedicated to a cleaner, more efficient energy system, encompassing everything from carbon capture, to new transmission grids, to wind and solar power. Such a system would allow the market to motivate companies to develop these technologies, whether a carbon cap is imposed or not.
“I don’t know that you need a hard cap if you send clear market signals that you need to decrease carbon dioxide emissions,” Schweitzer said.
While such comments might not bode well for Waxman-Markey, supporters of cap-and-trade in Montana say it’s too early to get discouraged or forecast the fate of any climate change legislation. Jackie Boyle, the state communications director for Repower Montana, said polls show Montanans broadly support some type of clean energy legislation, and no one’s power bills are getting any smaller in the meantime.
“Our focus is to get a good, clean energy bill passed this year in Congress,” Boyle said. “It is not to get the Waxman-Markey bill passed.”
“We haven’t seen the Senate bill yet because it doesn’t exist yet,” she added. “We can have a really big fight about cap-and-trade and then find out cap-and-trade’s not in the Senate bill.”
Boyle remains confident that once the health care debate subsides, in victory or defeat, the priority will be on climate change legislation, and there is enough consensus in Congress on the major features of any bill to get it done.
“We want legislation that includes some some mechanism to reduce carbon, some mechanism to reward efficiency, and support for renewables, and that’s where we all agree,” Boyle said. “I think Congress is going to get that message.”