Waxman-Markey Updates

Every environmentally-knowledgeable person I’ve talked to the last few months has come to the same conclusion: the ACES bill (aka Waxman-Markey) is not going to do anything for the environment, at least for a couple of decades. This has put us all in a quandary. Do we say that its better than nothing and support it, or come out against it, understanding that it will be harder to get the process started later.

Most of the folks I know who are serious about this space have decided that they’ll support it despite its warts. I’ve been on the fence for some time, but have finally concluded that W-M is too dangerous to pass. Not only will it not do anything for the environment, it poses serious risks to our economy and to ongoing, effective environmental activities, and those risks cannot possibly be justified by its ineffective results.

Yes, This Is Historic

First, its important to recognize that, whether it passes or not, W-M is a historic piece of legislation. Never before has a serious piece of climate legislation even made it close to this far, and the people involved deserve credit for that. It’s also important, though, to give credit to the states that have been making progress for quite some time. Other than the pork and the giveaways, I don’t think there’s anything substantive in the bill that hasn’t already been implemented at a state and/or regional level. States are driving real change, and hopefully the outcome of W-M will not slow them down (more on that later).

Why Everyone Is Disappointed

Just go down your average enviro’s wish-list for climate legislation and its easy to see why W-M is not a big hit.

Cap on Carbon. While W-M specifies a cap, it is a very poor one. With all of the free allowances and offsets, W-M will actually allow for an increase in US emissions between now and 2025. (add link to CBO, etc)

Carbon Market. The scheme outlined in W-M is ‘market-based’ in the same sense that the Soviet Union was ‘market-based’. Sure people bought and sold things, but the price ranges, supplies and demands were all carefully managed by a panel of bureaucrats, with plenty of leeway for political favors (many of which are actually written right into the bill!).

Price on Carbon. As mentioned above, the market is so managed that the price of any given deal will not be a real signal in any economic sense. But worse than that, for your average company or household, you will get no carbon price signal. You will have no idea how many free allowances or cheap foreign offsets were used to cover the emissions from your gasoline, natural gas, or electricity.

Increased Energy Efficiency. The energy efficiency standards were neutered when that part of the bill was combined with the renewable energy section. It is now far less aggressive than the laws that already exist in many states.

Increased Renewable Energy. (notes from Breakthrough analysis here)

Increased Spending on Innovation. The bill has not direct stimulation of innovation. It assumes that the combination of caps, mandates and incentives will indirectly drive the innovation that will be required for us to truly make progress.

Decreased Government Support for Carbon-Rich Energy Sources. Existing subsidies are all still in place. In many ways, through allowances and offsets, this actually may take pressure off of many coal plants and vehicle emissions standards.

The Risks

Some have looked at the list above and said “Oh, well, at least other good stuff is still going on” (link).

Impact on the Economy

Slow Down or Stop Things That Are Already Working

Some have looked at the list above and said “Oh, well, at least other good stuff is still going on” (link).

Give Environmental Legislation a Bad Name