The Policy Buffet (Part 4): Eulogizing the Climate Bill that Wasn’t

by |August 18, 2010

On July 22, just days before the National Oceanic and Atmospheric Administration (NOAA) declared that the last decade was the warmest on record, the United States Senate abandoned its effort to put a price on carbon. Comprehensive climate and energy legislation was on life-support for weeks until Senate Majority Leader Harry Reid (D-Nev) announced that his then-forthcoming energy bill would not seek to curb emissions.

Weeks earlier, Reid raised hopes within the Senate’s pro-climate caucus when he announced plans to construct a four-part energy package before August. His bill promised to be as comprehensive as any energy-and-climate legislation could be: it would (1) respond to the Gulf oil spill with new offshore drilling policies, (2) incentivize energy efficiency, (3) heavily invest in clean energy and (4) establish a cap-and-trade system to regulate greenhouse gas emissions from power plants.

It was no surprise that the last piece – which would address carbon dioxide emissions in the utility sector – was the most controversial. Over the course of the past year, cap-and-trade has gone through the political ringer. In June 2009, the House of Representatives passed the American Clean Energy and Security Act, which would create a domestic clean energy economy and set up a cap-and-trade system to curb emissions. Almost one year later, Sens. John Kerry (D-Mass) and Joe Lieberman (I-Conn) introduced the American Power Act in the Senate. Like the House bill, the Senate version would promote renewable energy and cap carbon.

Yet despite growing momentum to invest in new forms of energy and rethink the way we use our natural resources – largely in response to the Gulf spill – the Kerry-Lieberman bill was nearly doomed from the start. Partisanship had intensely politicized the climate policy debate and Republican Senators, nearly in lockstep, guaranteed their opposition to any bill to regulate carbon.

As reality set in within the Democratic caucus, Senators contemplated a scaled-back energy bill with provisions that would only cap emissions from utilities (rather than the entire economy). Advocates were hopeful that moderate Democrats and progressive Republicans might have supported the new plan. But when Reid finally introduced his bill, that hope faded.

The final energy bill hardly resembled the package he previously described. Above all, it is a response to the Gulf spill that intensifies regulations for offshore drilling and bolsters oversight of the oil industry (for instance, the bill removes the $75 million spill liability cap). The package also invests in natural gas for the fleet of heavy trucks; finances electric vehicle R&D; establishes the “Home Star” rebate program to make households more efficient; and builds the Land and Water Conservation Fund to protect natural landscapes.

The spill bill now faces its own murky future. Although the House passed its version of the legislation with a vote of 209-193 vote on July 30, Reid decided just days later to postpone a Senate vote until September. Bitter divisions in the Senate, Reid said, made it nearly impossible for his chamber to pass any bipartisan bill before the recess.

Environmentalists, irritated by Reid’s decision to ditch carbon caps, felt that the Nevada senator added insult to injury by excluding a provision for a renewable energy standard (RES). Pro-climate senators who recognized that cap-and-trade would be a nonstarter in the near future saw the RES as their last option to address emissions. Such rules would have required utilities to generate between 15 and 25 percent of their electricity from renewable sources.

Despite the fact that many Senators support the RES, Reid has insisted that it would not be able garner the necessary votes: although many support a 15 percent standard, more liberal senators insist on a higher percentage.

The decision to take carbon caps and the RES off the table was a tremendous blow to the climate effort – one which effectively buried any likelihood of capping emissions this year. Yet however infuriating Reid’s decision was to energy and climate advocates, his move to back away was a sign of political realism. Climate change is one of the most charged issues on Capitol Hill and it is guaranteed to require extensive debate in the Senate. Reid may have realized that no matter how much he pushed for a climate bill, no progress would be made prior to September on energy-related legislation. Debate on a comprehensive climate-and-energy bill would have required weeks that the Senate did not have.

Senate Democrats would not have been able to overcome a filibuster, as they still lack consensus on how to address carbon. Moderate Republicans and “blue-dog” Democrats from coal states would not have risked their political careers by voting in favor of controversial carbon caps before November elections. Reid knew that if a climate bill made it to the Senate floor and could not get 60 votes, Republicans would use the failure as a weapon against Democrats in the upcoming elections, where many incumbents’ seats are up for grabs.

After the elections, the Senate is unlikely to take up climate in the lame-duck session (extending until January), even though White House Press Secretary Robert Gibbs has commented that climate measures could take shape during a House-Senate conference meeting on energy legislation.

These factors – reelection woes and an inhospitable calendar – have made it essentially impossible for the Senate to pass climate policy in the coming months.

Journalists, politicians and pundits were quick to dissect the collapse of the climate bill and to point fingers at whom they believed to be responsible: the Republican party, poor framing of the issue, America’s skewed moral compass, procedural hurdles in the Senate, environmentalists and so on.

President Obama has also taken flack for his failure to effectively promote clean energy and climate policy. Rolling Stone’s Tim Dickinson, who has a much remarked-upon piece on Obama’s role in climate politics, recently wrote, “Indeed, the president has made no concrete demands of the Senate, preferring to let Majority Leader Harry Reid direct the bill – a hands-off approach that is unlikely to produce a measure of any substance.”

Despite campaigning on a pro-climate, pro-carbon cap platform, Obama has since remained quiet on exactly how the Senate should proceed. Some political analysts argue that after signing two of his signature campaign issues into law (the healthcare overhaul and financial reform), the president did not have enough political capital left to push for cap-and-trade in 2010.

Additional obituaries of the climate bill can be found here, here and here.

Congress’s inability to pass climate legislation has shifted attention to the EPA. In the absence of national caps on carbon, it is likely that the agency will introduce its own regulations in the coming months. Policymakers, economists and industry groups alike have bemoaned this sort of command-and-control approach. If the EPA regulates carbon dioxide (which it has the authority to do), the result will likely be a patchwork system of complex, confusing rules. The rules will vary from industry to industry and, in some cases, product to product, accordingly creating new bureaucratic measures and processes. Experts contrast this complexity to cap-and-trade, which would send clear and consistent market signals to polluters.

The demise of the climate debate suggests that Congress’s current political formula is not working. Policymakers hoping to find bipartisan support for climate legislation must learn from past mistakes and find new ways to overcome gridlock. When the Senate decides to resurrect climate negotiations, it is critical that advocates engage the various actors who have a voice in the debate.

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