Breakthrough Generation

The American Clean Energy and Security Act passed in the House this Friday by a narrow margin of 219-212, and US lawmakers immediately began patting themselves on the back. Rep. Henry Waxman touted the bill as “decisive and historic action to promote America’s energy security and to create millions of clean energy jobs that will drive our economic recovery and long term growth.”

International observers joined in the praise, expressing levels of support varying from China’s cautious endorsement to the EU’s enthusiastic approval; some hailed the bill as a sign of commitment by the US, likely to encourage efforts toward a workable international climate treaty in Copenhagen. Coverage in the UK’s Guardian introduced ACES favorably as “a milestone,”  “the first time either house of Congress had acted to reduce the carbon emissions that cause climate change,” and quoted environmentalists who called the bill “a signature achievement.”

Criticism of Cap and Trade

But not everyone’s so excited. Among the few critics speaking up against Waxman-Markey, Todd Darling wrote in the LA Times that the newly passed climate bill is full of “smoke and mirrors.” We only have to look to Europe to see the “critical weakness” of a cap and trade plan that gives away too many pollution credits, Darling argues; and since ACES gives 85% of credits to polluting industries for free, it won’t establish a strong carbon market, won’t result in emission reductions, and won’t generate money to fund new technology.

A Washington Post editorial also expressed grave doubts about the likelihood that cap and trade will work in practice:

“While in theory the bill relies on the market to find the most efficient alternatives to greenhouse-gas emitting energy sources, in practice its subsidies, regulations and exemptions could skew the outcome in costly ways.”

Last week, Houston Chronicle columnist Loren Steffy came down even harder on ACES, calling it all “hot air” with no meaningful policy. He lambasted the cap and trade model of reducing carbon emissions:

“Obama noted that cap-and-trade worked well for combating acid rain. While that’s true, it ignores a key difference between acid rain and carbon. Acid rain was the result of pollutants that could be reduced using existing technology. We don’t have any economically viable technology for reducing carbon. We can, of course, simply use less, but that’s hardly the bold initiative for growth the president seeks. A more accurate comparison for the cap-and-trade plan is the European carbon markets, where prices have been volatile since they opened.”

Even former Secretary of State Condoleezza Rice has little faith in the cap and trade system, which she said can be “easily abused” on both the domestic level and the international one.

False Promises

A critical article in Time magazine on Saturday (quoting Breakthrough’s Michael Shellenberger) raised serious questions about whether ACES will achieve the emission cuts it promises. It noted that political compromise has led the bill to be “watered down considerably,” meaning that most carbon cuts in the bill come from “dicey” offsets and the “low-hanging fruit” of energy efficiency rather than from “encouraging the growth of low-carbon renewable electricity.”

A Financial Times editorial also hit hard against ACES for its “undemanding” emissions targets made weaker by price-triggered safety valves, its reliance on offsets, and its failure to raise revenues through permit auctioning. The FT concluded:

“In short, it is a mess. The key to a better plan is understanding that you cannot cut carbon without making carbon-based fuels more expensive – an obvious point, you would think. But it is one that US policymakers still cannot face.”

Financial Times columnist Clive Crook echoed the same sentiment in a scathing op-ed, where he called ACES a “travesty,” an example of Obama and Congress’s weak willingness to accept “change without change.” By failing to raise prices on dirty energy, ACES will never accomplish the carbon cuts or the clean energy economy it claims to aim for.

“[The bill's] net effect on short- to medium-term carbon emissions will be small to none. This is by design: a law that really made a difference would make energy dearer, hurt consumers and force an economic restructuring that would be painful for many industries and their workers. Congress cannot contemplate those effects. So the Waxman-Markey bill, while going through the complex motions of creating a carbon abatement regime, takes care to neutralise itself.”

In his blog on the Atlantic Online, Andrew Sullivan summed it all up by voicing a worry that seems to be on the minds of many ACES skeptics: with a bill this weak, is something really better than nothing? “I have this nagging feeling that half-measures that are sold as panaceas will make it harder to propose new half-measures,” he said.