Throughout the presidential campaign, Barack Obama said the best way
to reduce greenhouse gases and spur investment in renewable energy
would be to pass a so-called cap-and-trade climate bill. The plan would
limit — or cap — carbon dioxide emissions while allowing
green energy producers to sell “credits” to the fossil fuel industry.
The plan would raise much-needed funds for green-tech research and make
renewable energy cheaper. But according to a liberal environmental
think tank in Oakland, the watered-down version of Obama’s plan that
recently passed the House of Representatives and is now in the Senate
will do more harm than good.
The Breakthrough Institute, which has become one of the most vocal
opponents of the climate bill sponsored by Democratic congressmen Henry
Waxman and Edward Markey, argues that the legislation fails to generate
enough investment in green energy because it offers too many corporate
giveaways. In fact, Michael Shellenberger, president of the
Breakthrough Institute, argued that CO2 emissions may actually increase
in the next several years if the Waxman-Markey bill becomes law. “If
this bill passes the way it is, we’re going to be stuck with bad
legislation that actually includes incentives to increase emissions
rather than decrease them,” Shellenberger told Eco Watch.
Climate scientists and green-energy producers generally agree that
the US government should invest $20 billion to $30 billion annually
over the next few decades to research and develop renewable energy
sources and make them competitive with fossil fuels. Obama promised in
the campaign to invest $150 billion over ten years — or about $15
billion a year. But according to an analysis by the Breakthrough
Institute, the Waxman-Markey bill, also known as the American Clean
Energy and Security Act, would only invest $6 billion to $9 billion
total each year for clean energy. Of that, just $490 million to $735
million would go to research and development, depending on whether
credits sell for $10 or $15 per ton of CO2 produced.
As a result, Shellenberger and others, including the respected
Brookings Institution in Washington, DC, argue that the Waxman-Markey
bill will fail to address the coming global warming crisis in both the
near and long term. Both Brookings and the Breakthrough Institute liken
the need to invest in green tech to what the federal government did
with the aerospace, microchip, and pharmaceutical industries.
According to critics, the primary reason for why Waxman-Markey comes
up short is that it allows the fossil fuel industry to initially obtain
free carbon credits, instead of having to buy them at auction. As a
result, CO2 producers, particularly coal plants, will have no incentive
to buy credits from green-energy companies. The giveaways also will
fail to lower emissions, since coal plants can simply use up their free
credits instead of slashing CO2, Shellenberger and others argue.
In the past, Obama also has criticized cap-and-trade proposals that
give away carbon credits, also known as offsets or permits: “If you’re
giving away carbon permits for free, then basically you’re not really
pricing the thing and it doesn’t work — or people can game the
system in so many ways that it’s not creating the incentive structures
that we’re looking for.” Obama’s budget director Peter Orszag has been
even blunter: “If you didn’t auction the permit, it would represent the
largest corporate welfare program that has ever been enacted in the
United States. In particular, all of the evidence suggests that what
would occur is the corporate profits would increase by approximately
the value of the permit.”
In a recent radio interview with Montel Williams, Waxman said they
decided to give away carbon permits in order to keep energy prices low
for consumers and gather enough votes in Congress. Waxman noted that if
the government forced coal plants to buy the carbon offsets from the
start, they would simply pass on the extra costs to ratepayers. As a
result, consumers in states that depend heavily on coal — such as
the Midwest and the Southeast — would be hit the hardest. Waxman
didn’t say it explicitly, but he also implied that congressional
representatives from coal-dependent states would never go along with a
plan that would force their constituents to pay more for energy than
residents of other states.
In fact, Republicans have used the threat of increased energy costs
as their main weapon against the bill (along with denying that climate
change exists). In addition, the concern about raising energy prices
during a recession may convince Senate moderates to oppose the bill,
too. The House barely passed the bill 219-212, and the closeness of the
vote has convinced many Democrats and environmental groups to support
the legislation out of fear that they won’t be able to get anything
better. Even Obama has lobbied Democrats to vote for the bill and will
sign it into law if the Senate passes it.
Moreover, not everyone believes the Waxman-Markey bill will fail. Al
Gore supports it, and Paul Krugman, the liberal Nobel Prize-winning
economist and columnist for The New York Times, has
argued that it could still lower greenhouse gas emissions despite its
flaws. “Even when polluters get free permits, they still have an
incentive to reduce their emissions, so they can sell their excess
permits to someone else,” Krugman explained in a recent op-ed
piece.
But Shellenberger predicts the bill will be watered down further
before it becomes law. As a result, he argues that Congress should
ditch the plan now and begin talking seriously about levying a tax on
carbon and then using the proceeds to invest heavily in green tech.
“Technology innovation is the only way to bring prices down,” he said
of renewable energy.
He’s right about that, and he’s probably right that the bill will
become weaker before it reaches Obama’s desk. There’s also no doubt
that Waxman-Markey is seriously flawed. But it also may be the best we
can hope for under the current political and financial climate.
The close vote in the House proves that there is little political
will to tackle the global warming crisis head-on. And as inviting as a
carbon tax would be, it likely will be tougher to get through Congress
than the current bill. Hopefully, Krugman and Gore will turn out to be
right. They certainly have been before.
Beating Trains, Buses, and
Automobiles
If we were really smart, we also would be investing heavily in
innovative new forms of mass transit. In Oakland’s Jack London Square,
there is one company that deserves notice — CyberTran. The
company has developed a sort of smart-car, automated train that will
take passengers directly to their destinations without having to stop
at every station. It combines the advantages of cars, buses, and trains
and is greener than each of them.
This is how it works. Say you’re at the UC Berkeley campus and want
to get to downtown Oakland. First, you walk up to a station and punch
in your destination. Within minutes, a single, automated twenty-seat
train picks you up and sends you down an elevated track covered in
solar panels. It travels much more quickly than buses or traditional
trains because it doesn’t stop at every station between campus and
downtown — although you likely would stop to pick up passengers
who want to go to the same destination as you. But even with those
stops, the system travels rapidly because when a train car pulls into a
station, it moves off the main track to allow trains behind it to speed
past.
Neil Sinclair, chairman and CEO of CyberTran, also said the system
is much cheaper to build than traditional rail and light rail. It’s
also competitive with Bus Rapid Transit and doesn’t require two lanes
of traffic. Currently, rail systems cost about $100 million per mile,
but Sinclair says a CyberTran system can be built for about $40 million
per mile, because it requires much less infrastructure, and because the
train cars are smaller and much lighter since they’re not linked
together like traditional train or light-rail cars. The elevated tracks
also take up much less space because CyberTran is so light, it doesn’t
require a huge support structure.
CyberTran has actually been around for more than a decade. It was
the brainchild of John Dearien, a onetime senior engineer with the US
Department of Energy. But over the years, the company has struggled for
attention. The reason is that public transportation agencies are
extremely reluctant to experiment with untested products, Sinclair
explained. In fact, CyberTran can’t qualify for most competitive bid
processes because it has yet to actually build a full-blown system.
“It’s a Catch-22,” Sinclair said. “You can’t enter into an RFP until
you build it.” So far, the company has stayed afloat thanks to private
investment and grants from the Energy Department and from the US
Department of Transportation.
Sinclair said that the company has been working with several cities
to try to obtain a federal grant for a test project. Still, for
CyberTran to catch on, Sinclair acknowledges it’s going to take a
courageous local agency willing to make a significant gamble.
