Weathervane: A Climate Policy Blog from Resources for the Future

Jun09

Indiana Senator Unveils 'Practical' Energy Plan

Set in the frame of increasing American energy independence and improving energy efficiency across the board, Sen. Richard Lugar, R-Ind., released his plan (summary and entire bill) to increase national security and reduce greenhouse gas emissions today.

The Lugar Practical Energy Plan sets out to, by 2030, reduce American’s foreign oil consumption by 1.75 billion barrels. It also aims to cut energy use by 11 percent and reduce greenhouse gas emissions by 20 percent, when compared with business as usual, without putting a cap on greenhouse gas emissions.

Ezra Klein describes the gist of the bill as, “picking the low-hanging fruit on reining in carbon emissions,” and chatter about the plan centers largely on its general passibility. The Deepwater Horizon accident has put a spotlight on U.S. energy policy and, to use a lame metaphor, the public support pump is primed for the passage of energy legislation. Gossip has it that an energy-centric bill, like the one Lugar has proposed, may get a concerted push with the more ambitious climate plan from Sens. Kerry and Lieberman added as an amendment.

However absent a (say it with me now) price on carbon the environmental benefits of the bill will take a back seat to energy efficiency and security. But at least it’s a start. It seems the question before Senate Majority Leader Harry Reid is is a good start good enough?

Other highlights from the Lugar Practical Energy Plan:

Efficiency standards for medium and heavy-use vehicles
Energy savings from newly-constructed buildings of 30 percent by 2012 for residential and commercial properties
$2 billion in funding to retrofit existing buildings with technologies to improve energy efficiency
Clean energy standards—including nuclear power and ‘clean coal’ technologies—increasing to 50 percent of the nation’s energy portfolio by 2050
Voluntary retirement program for coal-fired power plants and additional $36 billion in nuclear loan guarantees

Published: Jun-09-10 | 1 Comment

Mar15

U.S. Climate Policy and the Shape of International Agreements, Part 4

COP-15, International, United States

What’s Next for U.S. and International Climate Policy

The nations of the world came together in Copenhagen this past December to continue a process begun in 1992 at the Rio Summit to address the causes and consequences of climate change. The ultimate goal of that process is to reach an international agreement that will limit global greenhouse gas (GHG) emissions to “safe” levels while at the same time ensuring the nations most vulnerable to the impacts of climate change are provided the financial and technical means to adapt to a changed climate.

As I mentioned in my previous posts (here, here and here), this series will provide a view of Copenhagen from a distinctly American perspective, blending global economics with domestic U.S. politics. The outcome of Copenhagen and the international process that now follows is shaped largely by the domestic politics of all the major emitting countries with U.S. domestic politics playing a particularly large role.

In this post, I’ll take a look at where international negotiations are likely to go after Copenhagen and what role the U.S. will play on the international stage going forward.

International Negotiations Post Copenhagen

One can argue that Copenhagen marked a substantial shift in the dynamics of global climate policy development. A good deal of that shift is due to the renewed presence of the U.S. in international negotiations. Copenhagen moved the development of global policy further away from a Kyoto-like agreement, not closer. And, Copenhagen perhaps signaled a move further from the UN 190+ nation process and closer to a process taking place at venues like the Major Economies Forum (MEF). Certainly, this is the desire of the U.S.; however, it remains to be seen whether the BASIC countries (Brazil, South Africa, India and China) will agree to this radical shift in negotiating venue. Regardless, it seems almost certain issues like the Clean Development Mechanism (CDM), sectoral offsets, Reducing Emissions from Deforestation and Degradation (REDD), adaptation, and finance will likely remain within the UNFCCC negotiating structure.

Copenhagen made clear the goal of a comprehensive, legally binding agreement setting emission reduction targets for developed countries while requiring no action on the part of major developing economies ala the Kyoto Protocol, is not achievable. What is achievable is a process of bottom-up pledge and review where the major developed and developing countries agree to take domestic actions to limit their emissions, agree to some form of monitoring, reporting and verification (MRV), review these actions after a suitable period of time to see if everyone is abiding by their pledges, then pledge again. Pledge and review is not as elegant as Kyoto, but is a whole lot more practical.

While the Copenhagen Accord does include language setting an aspirational goal limiting emissions to 2 degrees C, one doubts whether anyone with a sense of politics finds that fact comforting. The GHG concentration at which we will eventually stabilize—and therefore the temperature rise that will be achieved—will not be predetermined neatly by science, but rather, by the messy business of politics and the reality of economics.

Adapting to New Negotiating Framework

As the major economies take the lead in forging agreements, and to the extent the venue for those negotiations moves beyond the UNFCCC to other processes, the interests of poor nations in issues of adaptation can become overlooked. The primary concern of the major economies in international negotiations is their emissions, not adaptation. Interest in adaptation and other issues particularly salient to developing countries are secondary concerns, largely due to the fact that most of the major economies (emitters) are reasonably developed (or well on their way) and will be able to adapt. Once the major economies take their mitigation negotiations out of the UNFCCC, the poor countries who will suffer climate impacts might end up talking to themselves about adaptation.

If the U.S. does not pass comprehensive legislation establishing a domestic cap-and-trade program that admits international offsets, a broad and deep global carbon market may fail to materialize. Absent such a market, the amount of wealth that will be transferred from the north to the south will be small and will get smaller over time. Without private sector money flowing to developing countries to purchase offsets the transfer of wealth will have to come from government tax revenues. In the U.S., and I expect elsewhere, it will be a very difficult political challenge to get these flows up to the levels needed and even more difficult to maintain those flows over time.

Long-term funding for adaptation will be particularly difficult to amass. While mitigation lends itself to a carbon market, there is not a private market analog for adaptation. Many adaptation projects look to the financier as straightforward economic development projects, where the risk tends to be high and rate of return low. Without private capital interest in these projects poor countries are left relying on highly uncertain developed country government funds.

U.S. Negotiating Position Post Copenhagen

If, as I believe, Copenhagen signals a very different process for reaching global climate agreements, the roles of the major economies will grow and the U.S. will have more opportunity to exercise leadership. Understanding the U.S. negotiating position going forward is aided by the simple fact that domestic climate policy and politics will form the proper foundation for foreign policy with respect to climate change. The Clinton administration let the formulation of climate foreign policy precede the development of domestic climate policy. Those actions angered the U.S. Senate and doomed the Kyoto Protocol in the U.S. The Obama administration will not make that mistake.

The U.S. negotiating stance going forward can be summed up with a few short sentences. The U.S. will attempt to establish the MEF as the venue for future mitigation agreement negotiations. The general form of the agreement sought will be pledge and review of Nationally Appropriate Mitigation Actions (NAMAs) by all MEF members with suitably strong MRV requirements. The Kyoto track within the UNFCCC will not be supported. Mitigation NAMAs for the U.S. will be identical to those passed by the U.S. Congress (whatever those actions might be). Since the U.S. NAMAs will be written into domestic law, the U.S. will hold these are legally binding on their own and therefore do not need to be included in a treaty; however, the U.S. would not block such a treaty should one be developed. If the U.S. Congress passes cap-and-trade legislation with international offsets, the U.S. will be able to deliver funds to developing countries for mitigation. REDD+ and sectoral offsets will be supported by the U.S. If domestic cap-and-trade legislation with international offsets is passed, REDD+ will be high on the negotiating priority list.

Raymond J. Kopp is a senior fellow and director of Resources for the Future’s Center for Climate and Electricity Policy.

Published: Mar-15-10 | 1 Comment

Mar10

U.S. Climate Policy and the Shape of International Agreements, Part 3

COP-15, International, United States

How the U.S. Approached Copenhagen and What Came of it

As I mentioned in my previous posts (here and here), this series will provide a view of Copenhagen from a distinctly American perspective, blending global economics with domestic U.S. politics. The outcome of Copenhagen and the international process that now follows is shaped largely by the domestic politics of all the major emitting countries with U.S. domestic politics playing a particularly large role.

In this post, I’ll take a closer look at where the U.S. stood in the run up to Copenhagen and how that led to some positive and negative outcomes from the conference.

Copenhagen Accord: The U.S Position going into Copenhagen

The U.S. negotiating position at Copenhagen reflected domestic political concerns. The foundation for the position was the constraint imposed by the White House that under no circumstances could the negotiating team appear to be pre-empting the U.S. Congress in setting emission reduction goals. The negotiators were free to utilize the reduction goals in Waxman-Markey (17 percent below 2005 levels in 2020, and 83 percent below 2005 levels in 2050), but they could not enter into negotiations over more stringent the goals. Thus, the U.S. team did not go to Copenhagen prepared to negotiate targets nor was it authorized to do so.

If the U.S. is to be a signatory to a new treaty serving as the successor to the Kyoto Protocol the new treaty would have to be ratified by the U.S. Senate. Ratification of international treaties requires 67 senators to vote in favor. As I said in my previous post, it is politically challenging to amass 60 votes to pass domestic climate legislation; clearly, it’s more difficult to amass 67 votes. Therefore, the negotiating team was prepared to make it clear that U.S. ratification of a Kyoto successor was highly unlikely. The U.S. negotiating position, developed over the past several years, sought the abandonment of the Berlin Mandate (the Mandate serves to exempt non-Annex 1 countries from any responsibility to reduce GHG emissions) and an agreement requiring all countries, and particularly countries participating in the Major Economies Forum (MEF), to agree to undertake a series of domestic mitigation actions and bind themselves legally to execute those actions. These actions, termed “Nationally Appropriate Mitigation Actions” (NAMAs) are of the countries’ own choosing. The binding international commitment would be reflected in the domestic enforcement of these actions under a country’s own laws. In addition, some sort of agreed to monitoring, reporting and verification (MRV) of the NAMAs would be required as part of the agreement.

Given the U.S. interest and focus on an agreement built around NAMAs, combined with the fact the U.S. is not a party to the Kyoto Protocol, progress along the Kyoto track (Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol (AWG-KP)) was not a part of the U.S. negotiating objectives. The U.S. was and is placing all its effort on the Ad Hoc Working Group on Long-Term Cooperative Action (AWG-LCA).

Since a handful of nations can block a UNFCCC agreement—as we saw at the end of COP-15 negotiations—the U.S. sees the process as severely dysfunctional with respect to global agreements to limit GHG emissions. The U.S. much prefers the MEF as the venue for collaboration and cooperation on international climate policy. Indeed, a “MEF Plus” that includes an additional half dozen or so representative developing countries giving the MEF a bit more international credibility would likely be welcomed by the U.S.

U.S. negotiators were supportive of policies to incentivize the conservation of forests to reduce emissions, known as REDD+, the establishment of a credible and efficient sectoral offset policy to accompany the Clean Development Mechanism (CDM), funds for developing countries to finance GHG mitigation and adaptation, and a robust global carbon market. Indeed, the carbon market is the primary mechanism by which U.S. funds (private sector dollars) would flow to developing countries for mitigation efforts. The U.S. was also supportive of the flow of government funds to aid mitigation and adaptation efforts; however, it is unlikely the U.S. would agree to the distribution of these funds via a process solely administered by the UN.

The Copenhagen Accord: What Went Well

From the U.S. perspective the Copenhagen Accord produced many good results. Perhaps the most important outcome was the agreement hammered out by the U.S. and the BASIC countries (Brazil, South Africa, India and China) to put forward NAMAs, enter those into an agreed upon registry, and the inclusion of some MRV language in the final agreement. While the actions contained in the registry at the current time are not enough to solve the climate problem, they are a step forward.

A 2 degree C maximum mean global temperature increase goal was agreed upon, providing an important long-term objective. Importantly, significant pledges of near and longer-term finance for mitigation and adaptation were made, even approaching the lower end of what is generally believed to be necessary. Pledged near-term finance (2010-2012) amounted to $30 billion while longer term pledges (2012-2020) were $100 billion.

What Went Poorly

On the negative side of the ledger six countries (out of the 190+ participating in the negotiations)—Sudan, Venezuela, Bolivia, Nicaragua, Cuba and Tuvalu—rejected the Accord and prevented it from being adopted as an official decision of the Conference of the Parties (COP). Parties agreeing to the Accord could only officially “take note.” This leaves a great deal of ambiguity with respect to the manner in which progress toward further development of the Accord can take place with the context of the UNFCCC.

Perhaps more worrisome, the negotiations almost certainly would have failed without direct intervention from heads of state. The severe dysfunctionality of the UNFCCC/COP process was clear, as ministers and countries’ representatives failed to make any progress in advance of the COP and the arrival of heads of state.

From a U.S. perspective key elements were missing from the text, specifically, 80 percent reduction target by developed countries by 2050, 50 percent global reduction by 2050, due primarily to developing country resistance, specifically China. Moreover, developing countries were unwilling to make the outcomes (NAMAs) legally binding and it is unclear whether they would ever do so.

Lots of discussions moved forward without having text adopted, including forestry, technology, adaptation and finance. These tracts needed more time and high-level engagement to be completed. Forestry seemed to move the furthest along; technology and intellectual property issues still need more development and thought, and the Copenhagen Green Climate Fund needs a good deal more elaboration prior to COP-16 in Mexico.

Raymond J. Kopp is a senior fellow and director of Resources for the Future’s Center for Climate and Electricity Policy.

Published: Mar-10-10 | 0 Comments

Jan19

Show me the Money (in the Context of Meaningful Mitigation Actions and Transparency on Implementation)

COP-15, Congress, International, United States

Money image courtesy lillit via Flickr Post-Copenhagen, securing and managing financing for adaptation, mitigation and technology transfer could well become the most prominent issue in international climate negotiations in 2010, and become a much bigger issue domestically than it was in 2009 legislative discussions.

Internationally, financing is likely to be one of the issues that sees the most action in 2010 climate negotiations for several reasons. First, the Copenhagen Accord calls for immediate activity on structuring and distributing funds, and work may be able to proceed on this front while talks are stalled on broader issues. Second, making good on the $30 billion short-term fund will be critical to rebuilding global cooperation that has been threatened by the divisive Copenhagen conference. Third, the host of this year’s main climate summit, Mexico, has always been a leader on financing. They are likely to want a deliverable from the conference on their flagship issue.

At home, President Obama now has to ask Congress to help make good on their part of the $30 billion commitment—likely to be $6-7.5 billion from 2010-2012—with a substantial portion dedicated toward a $1 billion 2010-2012 pledge for reducing deforestation. He will also need to ensure that any comprehensive domestic effort includes enough long-term financing to support the $100 billion Secretary of State Hillary Clinton pledged to help mobilize in the context of a global agreement (with a likely U.S. share of about $20 billion). This will require action on two fronts: substantially ramping-up appropriations for international climate activities from their current level of approximately $1 billion, and, more importantly, placing one of his biggest bets yet on cap and trade.

Indeed, if legislation similar to Waxman-Markey or Kerry-Boxer were enacted, the private financing mobilized through offsets would easily allow the president to reach his financing goals. However, under various “Plan B” scenarios being discussed, financing will be the loser. While it is likely that a more limited climate bill, a so-called “energy only” bill or even the Clean Air Act would allow the United States to meet its 2020 mitigation pledge, it is unclear how these mechanisms would mobilize dedicated streams of international climate financing on the scale of economy-wide cap and trade.

While the appropriations process may be able to handle a short-term bump over three years for the Copenhagen prompt-start funding, it is likely to buckle under the strain of an attempt to double the U.S. foreign assistance budget solely for international climate activities. Under these “Plan B” domestic policy scenarios, this could lead to three outcomes: 1) Robbing from Peter to pay Paul (i.e. diverting large amounts of foreign assistance from some other activity to climate), 2) Failure to secure a binding international agreement (the fragile Accord would never have been reached without Clinton’s $100 billion pledge), or 3) The introduction of a new mechanism to raise dedicated public or private financing under an alternative U.S. climate policy scenario.

Since the first two outcomes are clearly unsuitable for those looking to pursue international climate agreements, this should create a major push among supporters for the international aspects of economy-wide cap and trade, specifically the set-asides and offsets that have taken a backseat thus far to domestic economic concerns. Either that, or policymakers need to begin the process of thinking through alternative mechanisms to raise funds under other possible comprehensive climate and energy policies. Given the likely increased focus on financing internationally in the immediate future, time for both is short.

Andrew Stevenson is a research assistant at Resources for the Future and regular contributor to Common Tragedies.

Published: Jan-19-10 | 0 Comments

Jan13

2010: A Climate Odyssey

United States, Cap and Trade, Congress

Crystal ball image courtesy Mr. Muggles via Flickr It seems clear to those tuned to federal climate and energy legislation that 2010 will see tons of action – Clean Air Act pronouncements, controversial amendments and bills introduced and debated, litigation plentiful – but modeling the final outcome is far from clear. But that hasn’t stopped policy watchers, wonks and pundits from trying to figure out why. So as members of Congress pack their bags for the trip back to Washington, here’s a look at the issues that are likely to weigh heavily on climate and energy policy in the coming months.

J-O-B(s): The readers of policy tea leaves seem to think the nation’s double-digit unemployment will consume the time, efforts and energy of Congress in 2010. ClimateWire’s Darren Samuelsohn leads his roundup (via NYT) of climate legislation’s hopes bluntly:

Advocates for comprehensive climate legislation should look no further than the nation's unemployment rate as they ponder their chances for success this year.

But there seems to be plenty of room under the “climate and energy” umbrella. While some, like Massachusetts Sen. John Kerry, feel separating the two notions would slow the growth of a green economy, others see eschewing the climate elements and pushing toward energy efficiency and renewables as more politically palatable. Regardless, as the Pew Center on Global Climate Change’s Eileen Claussen puts it, “whatever it is that's done has to be done in the context of jobs."

Speaking of Jobs: What about all those members of Congress who’ve got to return to their constituents for the grueling interview process known as an election? Will vulnerable moderate Democrats be able to stomach another divisive debate and vote? Not to mention the already contentious votes many will have to own on bailouts, health care and stimulus funds.

Plus, nose counters say getting a climate bill through the Senate will require at least five GOP votes.

With political calculus weighing heavily on Washington, many states and regional coalitions are taking it upon themselves to craft plans to keep greenhouse gas emissions in check.

California chews on cap and dividend: A state panel convened Monday in California to kick around the idea of offsetting projected increases in energy costs under at state-wide emissions cap through direct rebates to consumers. Sounds a bit familiar to Weathervane …

Though the panel didn’t reach a consensus, about what to do with auction revenues once the state caps emissions in 2012, the consideration of a cap-and-dividend program may be a bellwether for Senate progress. With a simplified climate proposal from Washington’s Sen. Maria Cantwell introduced shortly before Congress’ December recess, it would seem that cap and trade may not be the only path under consideration.

Leakage precedent in the Midwest: It looks like North Dakota is ready to pick a fight with its neighbor to the east, Minnesota. The Land of 10,000 Lakes (that’s Minnesota for you coasties), plans to charge a carbon fee for energy transported across state lines when it implements its law requiring utilities to factor future energy costs into consumer fees. North Dakota, a huge provider of coal-fired energy to Minnesota, isn’t taking too kindly to the prospect of higher costs.

ClimateWire’s Evan Lehman brings some context (via NYT) to the tiff:

The Midwestern dispute is sharpened by its timing. It comes as 13 other states and several Canadian provinces are designing sprawling financial programs intended to put a price on carbon dioxide released from sources like electricity plants, industrial processing sites and vehicles.

Those states, clustered in the West and Midwest, intend to include imported voltage in their climate programs. So utilities would be required to buy pollution permits, or allowances, for every ton of carbon released during the production of power they use, even if that occurred in a state without carbon laws.

If that didn't happen, climate programs would spring leaks, and power from states without carbon prices could come flooding in, experts believe.

Emissions leakage, something RFF researchers have spent plenty of time looking into, would be a detriment to the environment and the economies of states/countries that have put prices on carbon.

Tiffany Clements is managing editor of Weathervane.

Published: Jan-13-10 | 0 Comments

Jan08

Will Senator Murkowski Block EPA Action on Climate?

Congress, EPA, Obama Administration, United States

Capitol image courtesy Cliff1066 via Flickr An amendment Senator Murkowski (R-AK) is likely to introduce is getting some attention in climate policy circles. The measure—expected to be added to important legislation needed to raise the debt ceiling, due to be considered by the Senate this month—would strip the Environmental Protection Agency of much of its authority to regulate greenhouse gases (GHGs) during 2010. Despite the attention, I don’t think the amendment is at all likely to become law. Even if it did, it probably wouldn’t have much effect on what the EPA will do over the short term. I’m not even sure that the impetus behind it is a desire by Sen. Murkowski to block EPA regulation.

Before explaining why I think those things are true, let’s take a quick look at what the amendment would actually do. Sen. Murkowski hasn’t introduced it yet, but she introduced a similar measure to an environmental bill last fall. It was defeated. The new amendment will probably be very similar or identical. It will likely be very short, and do only one thing: remove the EPA’s authority to regulate GHGs from stationary sources under the Clean Air Act (CAA). It will only block this authority for one year, and it will not touch authority to regulate mobile sources.*

Practically, this wouldn’t have a big effect on EPA regulations. The EPA is only moving forward with mobile source regulations right now (at least publicly), having made its mobile source endangerment finding last month and plans to introduce fleet emissions standards in March. Nobody outside the agency knows for sure what the EPA will do with stationary source GHGs, assuming Congress does not do something first. In any case, a program is not likely to be in place before the end of 2010. One exception to this is the CAA permitting process (NSR and Title V)—but the EPA is also trying to restrict that process to big GHG emitters that already have to go through it for other pollutants. Even if this “tailoring” runs into trouble in the courts, it too would probably be able to survive 2010.

Sen. Murkowski has also made some noise about the recent GHG endangerment finding. She doesn’t like it and is apparently trying to get some legislation to block it. I don’t really understand this move, though—the debt ceiling amendment would leave mobile source authority to the EPA. That authority is meaningless without the endangerment finding (remember that it applies on its face only to mobile source GHG emissions, and is required for the EPA to regulate those sources).Congress has generally been OK with the EPA regulating mobile-source GHGs. None of the climate bills (as far as I know) supplant EPA regulation of mobile sources. Murkowski therefore seems to be making two separate moves, one aimed at EPA authority to regulate stationary-source GHGs, and the other aimed at authority to regulate mobile-source GHGs. It’s not clear whether this is a broadside attack on EPA authority cleverly broken in to two parts, each of which might be more likely to pass, or an alternative approach—maybe she would only push one option if the other failed.

Moreover, I don’t think the debt-ceiling amendment will become law. There are four reasons for this: first, it requires 60 votes to pass, like most other Senate measures. Sen. Murkowski would have to get every Republican and 10 Democrats to vote for the amendment. This isn’t totally implausible, but it won’t be easy. Moderate Democrats or supporters of one or the other climate proposals in the Senate might be convinced that giving Congress more time is a good idea. Most Democrats will oppose the amendment, though.

Second, even if Sen. Murkowski gets the amendment into the debt ceiling bill, that bill itself will have to pass the Senate. The last increase in the debt ceiling passed just before Christmas by a single vote, almost exactly along party lines. The Murkowski amendment would throw a giant spanner into that balance, with the possible result that the measure wouldn’t pass at all. Republicans would be torn between opposition to increasing the ceiling and support for the amendment, and Democrats the reverse. If the bill were to pass, the coalition voting for it would have to be very odd. I have a suspicion that this is the intended result of the amendment—it might be a poison pill for the debt ceiling increase, as much or more than a move aimed at the EPA. That’s reasonably clever, but it’s also dangerous. Republicans might get into trouble at the polls either for voting to increase the deficit or failing to block EPA regulations—when if they had kept the bills separate they could have had both votes on their record.

Third, any bill that did pass the Senate would have to go through consolidation with the corresponding House measure. I’m not an expert on legislative process, but I do know the House is less likely to include a Murkowski-style amendment.

Finally, even if all these other hurdles are passed, the president would have to sign the bill including the amendment. I don’t think he would do this—it would take away significant authority from the executive branch on an issue he has publicly claimed is important. It would also undermine U.S. international credibility on climate, which is currently based on the promise of EPA action in lieu of congressional moves. Congress surely does not have the 2/3 supermajority to overcome a veto.

Would such a veto trigger a Clinton-Gingrich-style standoff and potentially shut down the government? Maybe, but I don’t think so. The debt ceiling is important in the long term, but the government can operate without it. In 1995, Congress did not pass a budget, so the government could not spend money to operate. Here, it can operate, just not borrow. This could cause all kinds of problems, but it wouldn’t necessarily cause a shutdown. It would also be politically dangerous to risk any kind of shutdown during a war, and the 1995 experience is evidence that Congress would get the blame.

The difficulty of getting the Murkowski amendment through illustrates the problems faced by climate legislation generally. Since the CAA already gives the EPA authority and she is trying to take it away, all of the institutional and political forces that have made it tough to get a climate bill would work in the opposite direction.

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*Specifically, the September amendment would have denied funding to the EPA for any regulation of GHGs under the CAA except under §202(a) – mobile sources. It would also have overturned the Mass v. EPA finding that GHGs are CAA pollutants, again except under §202(a). This is weird, since there is no separate definition of pollutants in different sections of the CAA, but it’s not unprecedented for a term to mean two different things in the same statute. Congress has the power to define it differently. Both of these changes would expire after one year. The result would be that the EPA can’t use any part of the CAA except §202 to regulate GHGs for one year – in other words, no NAAQS, no NSPS, no permitting (and therefore no tailoring), no stationary-source regulation at all.

Nathan Richardson is a Visiting Scholar at RFF.

Published: Jan-08-10 | 1 Comment

Jan07

Post-Holiday Post-Mortem: Surveying the Wreckage of COP-15

COP-15, International, China, United States, REDD

Pony image courtesy Cheesy42 via Flickr

If I may, I’d like to start with a holiday-appropriate metaphor. Let’s pretend that you are convinced you’re getting a pony for Christmas. You’re absolutely sure of it; the momentum built up from the Christmas presents of years past is too strong for this year’s gift to be anything but a pony. As the year creeps closer to Christmas morning, you see warning signs that suggest you might not get your pony this year. Mom and Dad are struggling to make ends meet, the pony market is down overall, and you live in a high-rise apartment. Regardless, you keep thinking that pony is coming because it has to. This is the year of the pony.

When Christmas comes, you rush downstairs to find … no pony. All you got was a pair of socks. They’re nice socks. Thick and warm, they’re made of SmartWool, so they’ll keep your feet dry. They will be great socks to wear the day when you eventually get a pony. Your friend, who wasn’t expecting to get anything for Christmas got the same socks and is actually pretty stoked, considering he didn’t expect to get anything. It doesn’t matter to you, though, because you had your heart set on a pony and all you got was a stupid pair of socks. Worst December ever.

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When people ask me how Copenhagen turned out, I tell them it depends on what they were expecting going in. For some, expectations for the conference were huge, a-pony-for-Christmas huge. So, it shouldn’t be a surprise that many of them view the results as a dismal failure. Negotiations on text for what would have become the Copenhagen Agreement or Protocol (or whatever official sounding name for a document you prefer) did not progress well enough over the course of the year to produce a great outcome at COP-15.

The U.N. tried to lower expectations in the preceding months, and after meetings in Bangkok and Barcelona, it was pretty clear Copenhagen was not going to deliver on what many were hoping for, namely legally binding emissions targets. The Copenhagen Accord, the result of two weeks’ worth of brain-numbing negotiations and some impressive ad hoc diplomacy by President Obama, to turned out to be something like (to stick with the metaphor) a comfortable pair of warm socks: underwhelming and perhaps disappointing to a lot of people, but still useful, probably more helpful than we realize, and something on which we can stand in the future.

What actually came out the meeting? The Copenhagen Accord, a three-page document that reiterates the international community’s commitment to reduce emissions enough to prevent a 2 degree Celsius rise in global temperatures. It asks developed and developing countries to commit to mitigation actions under the basic structure of the Kyoto Protocol (and submit them by January 31), and establishes a framework for monitoring, reporting, and verifying nations’ emissions reductions. Along with recognizing the importance of reducing emissions for deforestation and forest degradation (REDD) and market approaches to emissions reductions, it also establishes mechanisms through which developed countries can provide financial support to developing countries for adaptation purposes.

The Accord, while not officially adopted by the Conference, will help move the process forward. Before you start making hotel reservations in Mexico City for December, let’s take a look back on some the important things we saw in Copenhagen and how they might affect the process moving forward.

Do we need to scrap the COP? – If there was one thing that was pretty clear after two weeks in the snow and fog of Copenhagen, it’s that the current structure for international negotiations is very limited in what it can achieve. It would be difficult to get 193 nations to agree on something trivial like who was the best Bond (quite obviously Connery), so getting them to agree on how best stop a global catastrophe is not going to be a walk in the park. The UNFCCC structures and processes, however, make progress painfully difficult at times.

The final result of the COP is a perfect example. After weeks of arguments, stalemates, and walkouts, it took five heads of state trapped in a room together (President Obama and the leaders of Brazil, China, South Africa, and India, also called BASIC) to come up with three pages of somewhat vague agreements to be solidified at a later date. Most of the plenary was happy enough to have some kind of outcome and voted to approve the politically binding (not legally) Accord. To adopt an accord, however, requires a unanimous vote of approval from the delegates. Venezuela, Bolivia, Nicaragua, Cuba, and Sudan all felt that the Accord developed by the big kids did not include their particular interests or they were not properly consulted, and at least four of them voted against the Accord. Thus, instead of adopting it, the COP took note of the Accord, meaning that it acknowledges its existence and COP members can voluntarily comply with it, but it currently has no legal authority. None of this means that the Accord is not significant, but it shows how fragile COP proceedings can be. All it takes it one cheesed-off country (or one that is scared of economic specters) to stand between the world and a binding international climate agreement.

So are there alternatives? Indeed there are and they may become more attractive as nations look to move forward from Copenhagen. It’s clear that the complexities of climate change are a bit overwhelming for the UNFCCC process. Parallel conversations need to happen to more effectively address major issues and disagreements. As I said before, the Accord was written between the U.S. and BASIC. Those nations represent more than 50 percent of the world’s CO2 emissions. Throw the EU, Japan, and the rest of the world’s 17 largest economies and you have over 90 percent of emissions represented in one room that is much smaller and more manageable than the Bella Center. Dialogues between these critical nations can help break some of the loggerheads encountered in the COP discussions. There are two possible avenues through which parallel negotiations can help:

Bilateral and multi-lateral talks: What if the U.S. and China went into Copenhagen with a semi-formal agreement for technology sharing and measurement, reporting and verification (MRV)? Or if the EU worked out a deal with Brazil, South Africa, and Indonesia for funding programs for REDD and adaptation that could easily be plugged into UNFCCC institutions? Major emitters working directly with each other to smooth out differences and reach understandings before entering COP negotiations may help cut down on the static and grease the skids for legally binding outcomes that robustly address major issues.

Major Economies Forum: About that smaller room I mentioned earlier. The MEF can play a substantial role in advancing COP discussions if it wants to. It can provide a more intimate setting in which the U.S. and EU can talk about monitoring emissions and trade restrictions with China and India without the chaos and pressure of the COP negotiations. The MEF also does not have entrenched categories of Annex I and Non-Annex I countries that were established by the Kyoto Protocol, so the distinctions between developed (US, EU, Japan, etc.) and emerging (BASIC and others) are more flexible and can better reflect the economic realities in each nation.

These suggestions are not advocating a total dismantling or abandonment of the UNFCCC process. Instead, these negotiations can occur outside the process, but the end results can be designed so they can easily plug into on-going COP discussions. There will likely be issues regarding equity for developing countries and many of them will probably resent not being actively involved in the process. But going outside the COP may lead to significant progress on climate change and could also spur action within the COP as well. If you don’t want to take my word for it, you can listen to Rob Stavins and Joe Romm instead.

Et tu, China? – Going into Copenhagen, it looked like the U.S. was once again going to end up looking like the bad guy. Leave it to China to beat us at our own game. Without the U.S. to hide behind anymore, China—and India to a lesser extent—stepped forward to block huge progress. For the two weeks of the COP, China stonewalled and refused to budge on its demands for the developed world. Then in the final hours, when things got real with the various heads of state, China showed the proceedings exactly how serious it was taking things by sending a mid-level official to talk to the leaders of the other nations. Even after Obama managed to track down Chinese Premier Wen Jiabao and get him talking, China still vetoed the inclusion of language requiring a 50 percent reduction in total global emissions and 80 percent reduction from developed countries by 2050. Following the meeting, British Climate Secretary Ed Miliband called China out for trying to hijack the conference and being an obstacle to progress.

China’s actions, while discouraging, are not entirely surprising. It had all the leverage in this situation. Unlike other countries like Brazil and, to some extent the U.S., there was no domestic political pressure for the Chinese to reach a deal. The Chinese know they are key to any international agreement, and they know how big a role they play in U.S. domestic climate debates. Why should they move when they hold all the cards? It is also pretty clear that the Chinese have no desire to be an international leader on climate change. They have announced what they consider strong reductions (45 percent reduction in carbon intensity by 2020) and they have been going nuts on the renewable energy front, but they don’t want to commit to anything that’s going to cut into their economic growth over the next few decades. If the U.S. and EU are looking to form some kind of coalition of the willing for climate change, they’d be better off going after Brazil, Indonesia, and other emerging economies first. Everyone else might have to be on board first before the Chinese decide to play.

The more things change, the more they stay the same – The Obama administration entered 2009 looking to reclaim American leadership on climate change. The U.S. was engaged and negotiating in good faith for the first time in eight years. But, ever the realist, Obama wouldn’t sign anything that has no chance of passing the Senate. Consequently, U.S. negotiators would not commit to anything that was not laid out in domestic legislation. What domestic legislation am I talking about? Well, uhh …

It’s pretty simple. The world can’t take effective action without the U.S., and the U.S. can’t act effectively without domestic legislation. Things cannot move forward until the Senate acts. Obama cannot make “transformative and inspiring commitments” that will not pass a filibuster vote, let alone the 67 votes needed to ratify an international treaty. Copenhagen may have some effect on the Senate debate in 2010, and that debate will loom very large over future COPs just as it did in Copenhagen.

REDD in the face – If you followed our on-the-ground reporting, then you know the silver lining in all the chaos and tomfoolery was the advances in REDD and protecting tropical forests. The negotiations regarding the REDD text were consistently the most promising. While a final agreement was not reached, there were some promising developments. First, the U.S., Australia, Japan, Norway, Britain, and France pledged $3.5 billion for REDD programs over the next three years. Second, the Accord acknowledged how important REDD is to achieving robust emissions reductions and discussions are going to continue into the future. There are still some issues to iron out, like national vs. sub-national monitoring systems, but saving the forests was one of the rare things on which almost everyone could agree. Insert tree-hugging hippie joke here.

Copenhagen was a disappointment in a lot of ways, and a disaster in some ways (I’m not going to talk about logistical problems here), but it had real outcomes that matter. It is not the solution many were hoping for, and the world is currently a long way away from keeping temperature rises from 2 degrees Celsius. But things are moving forward. Think of Copenhagen as a baby step, with really nice wool socks.

Daniel F. Morris is a Research Associate with Resources for the Future and a regular contributor to Common Tragedies

Published: Jan-07-10 | 2 Comments

Dec31

Looking to 2010

United States, Congress, International

With 2009 waning and 2010 revving up, it’s an opportune time to reflect on the stories, issues and ideas that shaped the climate debate in 2009 and look forward to its evolution in 2010.

Put a cap on it. Capitalizing on a democratic majority and working with interests across the ideological and economic spectrum, House Speaker Nancy Pelosi—with undeniable assistance from Rep. Henry Waxman—managed to pass historic climate and energy legislation in the House in June, 2009.

But since its passage, the bill has struggled to move forward in the Senate, taking a back seat to financial and health care reforms. And despite a tri-partisan effort and momentum from Copenhagen, late last week, Sen. Mary Landrieu, D-La.—speaking on behalf of some half-dozen moderate Democrats—said she can’t stomach a fight over cap-and-trade legislation.

Meanwhile, compelled by a 2007 Supreme Court ruling and recent endangerment finding, the EPA is moving concurrently to mitigate emissions of some six dangerous greenhouse gasses. Many, including business leaders and even EPA Administrator Lisa Jackson, say this regulation is less than ideal. But in the absence of congressional action, the agency will proceed with its policy development. Still, plenty expect the outcome to be different than expected.

The shifting scales of global leadership. The United States is no longer the world’s top emitter. Consequently, the U.S. doesn’t stand at center stage alone any longer in climate talks. With China growing, elevating its population to a new standard of living and searching for a green path forward, international dynamics are changing.

Finger pointing seems to have dissipated slightly in the wake of this month’s climate change conference in Copenhagen. However, blame for the conference’s flop has been lobbed in China’s direction. As the country straddles a line between developing nation and world superpower, it finds itself with new responsibilities and challenges.

Putting up green to green the planet. This year saw some lofty commitments from world leaders who have undertaken responsibilities to not only transition their developed economies to low-carbon futures, but also assist developing nations in growing their economies in a green way.

But with unprecedented economic woes at home, how can U.S. officials convince Congress and the public the investments being made are good ones?

As for the big questions of 2010, Financial Times’ Energy Source has pulled together some thoughts. Meanwhile, Grist recaps the biggest environmental stories of the ‘00s. You can expect Weathervane to keep an eye on these issues and plenty more in the coming year.

Have a happy and safe new year.

Tiffany Clements is managing editor of Weathervane.

Published: Dec-31-09 | 0 Comments

Dec22

I Spent $100 Billion and All I Got Was This Lousy National Communication

China, COP-15, Congress, United States

U.S. Capitol Image courtesy Cliff1066 via Flickr

For most climate policy scholars, analysts, advocates, and makers, the last gasp before a much-needed two-week break will be trying to make sense of what happened in Copenhagen, and what it means for the short-and long-term global response to climate change. It would be easy to get bogged down in analyzing the chaotic process that produced the Copenhagen Accord, but I will focus on what the outcome means for the United States cap-and-trade debate over the next several months.

The central outcome of the conference appears to be similar to what many expected: a quid-pro-quo between China and the United States on financing and verification (aka transparency). In one sense, you could look at it as the developed world providing $30 billion in fast start financing from 2010-2012 and pledging to raise $100 billion per year by 2020 so that China and other major economies will write a report once every two years about their mitigation actions and discuss it with the international community. To many this will not seem like a particularly attractive “deal”.

On the other hand, it would also be valid to view the outcome as the United States wresting major concessions from China et al. in an 11th-hour drama that no other developed nation had the stomach, or clout, for. As a direct result of United States consistently taking a hard (but ultimately more credible) line in negotiations regarding developing country actions, the fundamental division of the Kyoto days is gone and has been replaced by the embryo of an arguably much more equitable system. Although there is still some differentiation, all major emitters have embraced the principle that they must take action and subject that action to international review. Barack Obama stared down Chinese Premier Wen Jiabao, and Wen blinked first.

While the real outcome of the accord lies somewhere in between, it is worth examining how these narratives and Copenhagen overall will play out in the Senate.

The most important point is that President Obama has made a major bet on cap-and-trade with the pledge to help raise $100 billion in financing by 2020. Based on past contributions to multilateral initiatives, and depending on whether all nations (ala the Mexico Proposal) or just developed nations contribute, the United States would be expected to put forward at least $10 billion, and likely $20-25 billion, of this financing. While the United States could probably reach its short-term mitigation commitments through the Clean Air Act or a European-style limited cap-and-trade system combined with fuel economy and efficiency programs, it is hard to envision increasing the foreign aid budget for climate much beyond the $1.0 billion included for FY2010 or $3 billion for FY2011 requested by John Kerry (D-MA). Using allowance price and offset volumes projected by U.S. government analyses, the Waxman-Markey bill would generate about $28 billion in international funding by 2020—including about $20 billion in private-sector offset purchases. While this fact has largely been overwhelmed by domestic economic concerns in the cap-and-trade debate thus far, expect these provisions to draw much greater scrutiny—and support from the administration—as legislation moves through the Senate. Especially critical will be provisions for reducing tropical deforestation, which is a large percentage of the Waxman-Markey funding and received a $1 billion boost from the administration in Copenhagen.

But the second (and much more helpful) line of analysis has already made its way through to moderate Lisa Murkowski (R-AK), who noted the willingness of China and India to participate in an international agreement as a positive for ongoing work in the Senate. In the weeks leading up to Copenhagen the Republican narrative had coalesced around the supposed fallacy of U.S. leadership—that if we act and impose costs on our economy, other countries will not follow but just ignore us and keep on polluting and stealing U.S. jobs. The framework negotiated by President Obama (and the product of years of work in the UNFCCC and dozens of bilateral meetings) and the events of the last few weeks provide a clear counter to this argument. Once the United States came forward with a mitigation pledge, China and India came forward with theirs. Once the United States pledged to help raise substantial mitigation and adaptation funding, China and India agreed to subject their actions to international scrutiny. Although the divisive rhetoric between China and the United States dominated much of the first 10 days of negotiations, the Copenhagen process has shattered once and for all the myth of developing country inaction.

This leads to my next point: Copenhagen further solidified the notion that the world can only go so far without the endorsement of the United States Congress. The counter-argument could be made that, absent the United States, the world could have moved forward with a successor to the Kyoto Protocol much more easily, with new legally binding mitigation commitments for developed nations. But this misses the point that the United States is on the right side here—both politically and substantively. While securing action from all major economies is most critical to domestic politics in the United States, it is also essential in Australia, Japan, Canada, and other developed nations that have struggled to convince domestic constituents that climate policies are worth the cost. None of these countries has the political clout to stand up to the G77 + China bloc, and benefitted immensely from U.S. efforts that can now be used to increase support at home. Substantively, it is also simply not defensible to say that the climate problem can be solved without meaningful commitments from China, India, and other major economies. Without U.S. leadership, it is unlikely the new system would have included their actions in such a meaningful way. Furthermore, forcing the transition to an architecture of domestic commitments backed by international review has also increased the credibility of the entire system. The power of U.S. leadership is both a positive and a negative—the United States can shape the nature of the international system to suit its interests and benefit the world, but can also hold progress hostage absent further domestic action.

No doubt the administration will continue to move forward on energy, technology, and land use initiatives, and increase the role of the G20, Major Economies Forum, and bilaterals that produced substantial progress this year even without U.S. legislation. Indeed, Copenhagen proved that these fora will remain vital with or without a cap-and-trade system. They can advance common interests without being held up by roadblocks or a lack of progress on other issues. However, the holy grail of climate policy—a global legally binding instrument—will continue to remain elusive absent further action from the U.S. Congress.

Andrew Stevenson is a research assistant at Resources for the Future and regular contributor to Common Tragedies.

Published: Dec-22-09 | 1 Comment

Dec15

U.S. Climate Policy from the Staffer’s Perspective

COP-15, United States

COPENHAGEN -- With the United Nations logistical planning for Copenhagen an immense success, you might wonder what has been going on at the numerous side events near the Bella Center here in Copenhagen. Needless to say, demand for external side events increased dramatically as the conference’s decision to limit access came into place on Tuesday.

A recent side event organized by the Environmental Defense Fund, PEW Charitable Trusts, and the International Emissions Trading Association focused on domestic U.S. climate change policy from the point of view of Senate staff members and policy analysts. While many U.S. senators had originally planned to attend the events in Copenhagen this week, demand for their labor back home (i.e. health care) made them conspicuously absent. As a result, the event allowed attendees to obtain some perspective on the issues surrounding domestic climate change policy from the viewpoint of that underappreciated individual in the legislative process, the Congressional staffer. Panelists included:

Michael L. Goo – Counsel, House Energy and Commerce Committee

Mark Helmke – Senior Professional Staff, Senate Foreign Relations Committee

Joe Shultz – Legislative Assistant, Senator Brown

Trent Bauserman – Energy Policy Advisor, Senator Shaheen

Issues the panelists discussed ranged from:

1) How a success in Copenhagen would impact the legislative process in the U.S.

2) The importance of measurement, reporting, and verification in developing countries

3) Boarder adjustment measures

4) The importance of REDD in Copenhagen and in U.S. climate policy

5) Adaptation and finance

6) The EPA endangerment finding

Many of the responses were standard remarks to issues of these sorts. Regarding the issue of the impact of a success in Copenhagen on U.S. legislation, all were in some form of agreement that it would be beneficial. Other responses to the importance of Copenhagen highlighted the role international agreements would play in solving leakage and competitiveness concerns, in addition to the obvious momentum an agreement of some sort would give to the recently dragging Senate approach to solving the current issues in domestic climate change legislation.

Perhaps deviating some from the expected responses of the participants, replying to a question about the importance of the EPA’s endangerment finding, Mark Helmke reminded attendees that the Senate is not entirely at the mercy of the EPA’s new big stick. Should the EPA try to act too aggressively, according to Helmke, the Senate can always remove EPA funding and/or amend the Clean Air Act itself.

On the issue of adaptation financing, most said they felt financing for adaptation was an extremely important issue, but one that would not likely be addressed in the near future. Bauserman stated that he would be extremely happy to see the Senate debating adaptation financing, seeing as that would imply a whole host of yet unresolved issues would have been taken care of. The fact that how financing is dealt with could play an important role to 60 votes was also discussed.

When asked whether the Senate would choose to finish legislation by 2010, conditional on not reaching a vote by April of next year, the response was that members of Congress would have to consider the circumstances of the moment and make the best decision then. Perhaps it was just the looming of Al Gore’s April deadline in the air here in Copenhagen, but the panel responses did not suggest any strong likelihood that a bill would be completed in 2010, if progress prior to April was limited. With the elections for some Senate seats being held in early November, voting on a climate bill too far from April, yet pretty close to November would be a politically risky idea for some.

Eric M. Moore is a Research Assistant with Resources for the Future.

Published: Dec-15-09 | 0 Comments

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