According to Reuters news service, Senators John Kerry, Joesph Lieberman and Lindsey Graham are weighing options that will allow the Senate to move forward with legislation. But the issue that is facing this group is only partially related to policy; politics will play a big role in if, when and how a bill may be passed in the Senate.

Options in Broad Strokes

There are many options for potential Senate climate legislation. This may include a comprehensive cap on carbon emissions that covers nearly the entire economy, or a bill that only covers part of the economy such as power plants and/or other areas of the economy. The latter seems more viable in the short run to some, in order to build a broad base of support. One very distinct piecemeal approach may be to cap the electricity sector of energy, representing about 40% of US emissions. This could make a significant dent in carbon emissions now without necessarily affecting other carbon intensive industries like cement and steel, and may also be administratively easier to monitor. However– critics view the piecemeal approach as inherently lacking, in that climate change should involve a comprehensive approach to emissions cuts.

The Politics

With elections coming up in November, it would be foolish to think that there will not be a fair amount of political jockeying between now and then. So trying to pass a bill in the middle of campaign season like this may be difficult, but not impossible. If the Senate is to pass a global warming bill, it will likely need to happen in the next couple months, before members of Congress focus on their districts and states and other issues that Congress is trying to clear this session.

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“We think it is important for the president to be empowered to be able to say to the rest of the world that America stands ready to lead on this issue,” Agriculture Secretary Tom Vilsack said after an energy briefing at the White House.

Reuters is reporting that Vilsack and Secretary Locke met with groups from the Midwest and Mid-Atlantic states, advocating that passage would be good for the environment and economy. An Agriculture Department study shows farmers could boost their net income by $10 billion to $20 billion in the long term earning money from offsets– contracts to plant trees or change the way they till land to lock more carbon in soils, Vilsack said.

Locke spoke on leadership by the US, vis-a-vis reluctance by some countries to set significant caps of emissions. “The United States needs to set a very firm and clear example if we are to be successful in getting the other countries to be equally aggressive in addressing climate change,” said Locke.

The House of Representatives passed by a close margin the American Clean Energy and Security Act (ACES) bill on June 26. The Senate is expected to consider and possibly debate its version of the legislation when it reconvenes in September.

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Speaking at the event, Eric said, “The great thing about cap-and-trade is that the environment gets its piece upfront. The cap is set at the right level with slow reductions and the market has to figure out how to get there.” For example, quality carbon offsets can be a cost-effective way to reduce carbon footprints. Carbonfund.org offers third-party validated and certified offsets meeting the highest accepted standards. To reach the approx. 80% reduction in 2050 set by the climate bill recently passed by the House, about a 2% – 3% reduction annually would be required. This goal, said Eric, is extremely doable.

Dr. Frank, who recently published The Economic Naturalist’s Field Guide: Common Sense Principles for Troubled Times and is a New York Times economics columnist, noted that the climate bill incentivizes emissions reductions through cap-and-trade. It’s a sensible approach that places a set level of overall reductions for the nation. In addition, the most efficient operations, or companies, are rewarded while less efficient companies in terms of their energy use and carbon emissions, are encouraged through this process to be more efficient.

Read more about the climate bill in this blog post.

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Now an analysis by the Union of Concerned Scientists (UCS) reveals that combining a CO2 cap-and-trade program with energy and transportation policies would result in dramatic emissions reductions and net savings for a typical U.S. household of $300 per year in 2020 and $900 per year in 2030.

USC President Kevin Knobloch testified before the House Committee on Energy and Commerce that a “comprehensive plan” comprising CO2 cap-and-trade, energy and transportation policies will help achieve a competitive 21st century clean energy economy that saves consumers money.

The analysis indicates a cumulative consumer and business net savings of US$ 1.6 trillion in a short of span of 10 years. Also, the study stresses the importance of a comprehensive plan, as when sector-specific energy and transportation are excluded from the analysis, the cumulative net savings of $1.6 trillion would reduce to $600 billion.

Image Credit: Union of Concerned Scientists

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