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A new legal climate

Experts examine the future of global change legislation and policy


by Bob Henson

john kerry

Massachusetts senator John Kerry opened the “Beyond Science” ­symposium at Rice University on 9 February. The meeting was cosponsored by three Rice entities—the Baker Institute for Public Policy, the Energy and Environmental Systems Institute, and the Shell Center for Sustainability—with support from the British Consulate. (Photos by Bob Henson.)

Houston has long dubbed itself the world’s energy capital. These days, the meaning of that phrase is in flux. Texas no longer leads the planet in oil production, but it’s now the king of U.S. wind power.

The state’s largest city was thus a fitting venue for two daylong symposia that addressed legal and policy frameworks to guide America’s epochal shift toward carbon control and green energy. Rice University hosted “Beyond Science: The Economics and Politics of Responding to Climate Change” on 9 February. Two days later, the University of Houston (UH) held “U.S. Climate Change Legislation: The Should, the Bad, and the Maybe,” billed as the first major meeting of legal scholars to examine congressional proposals addressing climate change.

The meetings unfolded just as the winnowing of the field in the 2008 U.S. presidential race raised the odds that a climate bill will soon be signed. All three of the top contenders who remained in the race in February—Hillary Clinton, John McCain, and Barack Obama—support major reductions in greenhouse gas emissions over the coming decades.

The suddenly realistic possibility of federal climate legislation infused the talks with a jolt of adrenaline, with much discussion of what kinds of legislation would be best. Opinions differed, but many participants stressed that legal and economic history was about to be made. In the words of UH environmental law professor Victor Flatt, “It is not hubris to say that today we are examining a half-trillion-dollar question.”

Capping, trading, and taxing

John Kerry, the Massachusetts senator and 2004 presidential candidate, set the stage for the Rice meeting by emphasizing the need for prompt action. “At every turn we’ve learned how truly grave and significant this issue is,” he said. “We have to make some big choices fast.”

Following Kerry, NCAR director Tim Killeen outlined key findings from the 2007 Intergovernmental Panel on Climate Change. Highlights from another major 2007 report—Confronting Climate Change, issued by Sigma Xi and the United Nations Foundation—were discussed by Rosina Bierbaum (University of Michigan) and John Holdren (Harvard University/Woods Hole Research Center). These speakers noted that floods, droughts, storm surges, and access to water are issues that loom as large or larger than temperature increases themselves. “The human experience is tied to the availability of water,” said Killeen.

Kerry said he expects some floor debate on climate legislation later this year, perhaps by June. Eleven climate bills are now working their way through the House and Senate. Two involve an explicit carbon tax, while the other nine are based on a cap-and-trade strategy. The latter technique was successfully pioneered in the United States for sulfur dioxide emissions. Europe is now in the second phase of a cap-and-trade system for greenhouse gases. In a cap-and-trade system, emission permits are granted and/or auctioned to major emitters, such as power plants. Those entities can then sell or buy credits as needed to meet emission guidelines that gradually grow tighter.

Thus far, most legislators and many environmentalists have leaned toward the cap-and-trade approach. Chief among their arguments is that a carbon tax doesn’t ensure emissions will go down, since companies or individuals could simply pay more to keep polluting.

At Rice, Gilbert Metcalf (Tufts University) spoke up for the minority in advocating a carbon “tax swap.” It would include a gradually rising tax rate per ton of greenhouse emissions for major emitters, as well as a rebate to poorer households that would be hit disproportionately by the resulting hike in energy costs. “The point is that it’s possible to have a revenue-neutral and distributionally-neutral plan,” said Metcalf.

If the United States does go for a cap-and-trade system, several speakers agreed that a significant portion of the first round of permits will likely be auctioned (rather than given) to utilities and other large emitters, who would effectively pay the government for the right to emit. The principle of charging companies to put greenhouse gases into the commonly shared atmosphere is similar to the auctioning of rights to the broadcast spectrum, which is a valuable public good that private entities pay to use. Such an auction could help limit the kind of windfall profits that were made by many companies in the first phase of the European Union’s Emissions Trading Scheme (ETS). Most of the initial ETS permits were grandfathered, or granted free of charge, mostly to factories and utilities.

neal lane

Neal Lane (Rice University) explained the science behind climate change for legal scholars who met at the University of Houston on 11 February. It was the fourth annual symposium held by UH’s Environmental & Energy Law & Policy Journal. Also on hand was U.S. representative Sheila Jackson Lee, who serves much of the Houston area.

Another problem with the first phase of the ETS was that too many allowances were issued. Once the oversupply was revealed, the demand for emission permits dropped and a price crash resulted. After peaking around €30 per metric ton in early 2006, the market value of carbon had dropped below €5 by early 2007. To avoid such wild swings, many analysts call for specifying target levels and allowance allocations well in advance of the start of trading.

Prices in the second round of ETS permits have held somewhat more steady within the €15–25 range, according to Milo Sjardin, head of the North American arm of New Carbon Finance. His firm anticipates that the U.S. carbon market could become a $1 trillion business by 2020 if the nation adopts a cap-and-trade plan. “There’s hardly anyone in Europe who doesn’t know what a carbon price is,” Sjardin said at Rice.

The California model

U.S. states often serve as laboratories for policy ideas that later become federal law. Not long ago, California passed the nation’s most far-reaching climate bill to date: the Global Warming Solutions Act of 2006.

“This was really revolutionary,” said Daniel Sperling (University of California, Davis), who sits on the California Air Resources Board. The bill requires that California reduce its greenhouse emissions to 1990 levels by 2020 (a 28% cut from business-as-usual levels). It also sets a goal of an 80% drop in emissions by 2050.

Transportation is the linchpin of California’s approach, Sperling told the Rice audience. Given the state’s temperate weather and a highly mobile population, transportation outweighs heating and cooling in generating greenhouse emissions. Along with encouraging less driving and the use of more efficient vehicles, California is asking fuel producers to make their product greener. A set of low-carbon fuel standards co-created by Sperling specifies that the emissions created by the production and use of fuel in passenger vehicles must drop 10% by 2020.

Automakers aren’t off the hook, either. In order to meet the cuts in vehicle emissions specified by a 2002 California law, vehicles will need to average roughly 37 miles per gallon by 2016 and 44 mpg by 2020. Automakers have sued California, along with Vermont and Rhode Island, claiming that state rules on carbon emissions shouldn’t be more stringent than federal law. Judges in Vermont and California dismissed the suits, though appeals may be on the way.

The California case points to the legal principle known as preemption: where and how can state law surpass federal law? William Andreen (University of Alabama) discussed preemption and climate change at the UH symposium. He noted that 36 states have drafted and/or passed climate action plans, and 26 have renewable energy portfolios, which mandate that a certain fraction of power be from renewable sources. This runs counter to recent history in other environmental areas, said Andreen: “Since 1970, it has always been the federal government who’s been out in front [of the states].”

China and coal

Experts at both Houston symposia noted that coal remains a colossal question mark in the world’s future emission budget—particularly for the United States, China, and India, which together hold 40% of the world’s remaining coal supply.

patricia mccubbin

At the University of Houston symposium, Patricia McCubbin (Southern Illinois University) discussed her year in China as a visiting scholar in environmental law.

Several speakers lamented the U.S. Department of Energy’s recent decision to drop funding for the FutureGen demonstration project. It would have been the world’s first plant to both gasify coal and sequester the resulting carbon dioxide. “If FutureGen is gone, I fear we have once again lost very precious time,” said Ernest Moniz, who directs the MIT Energy Initiative at the Massachusetts Institute of Technology.

Although individual tests of sequestration have shown promise, Moniz emphasized the need to place perhaps 20 such projects in close proximity to each other, in order to measure the effects of scale, and for at least three such groupings to be set up in different geological areas. “It’s remarkable that we have done very, very little to substantively confront the issues,” he said at Rice.

Patricia McCubbin (Southern Illinois University) saw the effects of the coal boom firsthand while on a Fulbright scholarship visit to Wuhan University in central China last year. The environmental lawyer painted a complex picture for the UH audience, noting both progress and problems. In some Chinese cities, she said, air quality has the same impact on residents as smoking two packs of cigarettes a day. And China now has more than 100 cities that each house more than a million people.

“The environmental degradation is becoming a source of great social unrest,” said McCubbin. She said that China now experiences more than 50,000 environmentally themed protests each year. “Some of them are small and peaceful; some are large and not so peaceful,” she added.

China has also made big strides, including a national goal of a 4% improvement in energy efficiency per year—“That’s an important commitment,” says McCubbin—and standards for vehicle fuel economy that are overtaking those in the United States. McCubbin noted that, for a variety of reasons, provincial law often falls short of fully enforcing China’s national environmental standards: “There’s a large gap between what the central government shoots for and what it actually achieves.”

The U.S. system has its own challenges, as Neal Lane noted in his remarks at both meetings. Lane, a past chair of the UCAR Board of Trustees and science advisor to Bill Clinton during his second term in the White House, organized the “Beyond Science” symposium with former Rice president Malcolm Gillis. “I’m not sure how our form of government is going to deal with this problem,” Lane said at UH, “but I am anxious to work on it.” He also echoed the bottom-line point made by many at both symposia: “We will have to put a price on carbon emissions.”

Eric Barron (University of Texas at Austin), who now chairs the UCAR board, closed the Rice event with a set of recommendations in line with what he calls “rational environmentalism.” These included climate services with a stronger user orientation, a set of “environmental intelligence centers” that would transcend today’s agency-based operations and research, and an expanded investment in human-dimensions research. “We’re either focused on reducing uncertainties in physical science or focused on solutions,” said Barron. “Almost all of the science in between is inadequate.”

 

Keeping tabs on climate law

government affairs team

UCAR’s Office of Government Affairs, from left: Jeffrey Fiedler, director Cynthia Schmidt, Gloria Kelly, and Laura Curtis. (Photo by Carlye Calvin.)

With 11 different climate bills now competing for U.S. lawmakers’ attention, it can be a challenge to stay current. Several nonprofit groups publish status reports and charts that summarize pending climate legislation (see On the Web below).

UCAR’s Office of Government Affairs is also keeping an eye on Capitol Hill action. OGA works on behalf of the atmospheric and related sciences across universities and agencies, keeping the community informed on federal budgets and upcoming legislation. OGA also helps scientists connect with Congress—providing guidance on how to deliver effective testimony, for example.

The OGA Web site (below) offers frequent updates from the Hill and plans to expand its coverage of climate policy. One particular area of focus will be legislation dealing with climate impacts and adaptation. “We’ll also provide updates on aspects of cap-and-trade legislation where UCAR members have direct expertise,” says OGA’s Jeff Fiedler.

Preparing for 2009: This year UCAR has teamed with the American Meteoro­logical Society, the American Geophysical Union, and the Weather Coalition to produce a document aimed at familiarizing this year’s presidential contenders with key issues in weather and climate.  “We’ve gotten a good reaction from the campaigns,” says Jack Fellows, UCAR vice president for corporate affairs.  The Web site (www.ucar.edu/td) includes recommendations and backup material on how those recommendations would be implemented, as well as a portal where community members can make, in confidence, nominations for key political appointments in the next administration. 

 

On the Web
 

Climate Change Bills in Congress

UCAR Office of Government Affairs

Making our nation resilient to severe weather and climate change

 
 

 

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