Caps CAFE and Conflict The Politics of Carbon

Building a groundswell of public opinion that calls on our leaders to take us in a new direction is only one part of the struggle. Achieving success will also require changing national policy in Congress.

"Politics is a strife of interests masquerading as a contest of principles." So said Ambrose Bierce of the democratic process. Thus, during the debate in Congress about our energy future, many paeans to high-minded principles will be trumpeted. Behind them, however, will be huge economic interests with money on the line, regional economies, and the jobs of countless workers. Both principles and interests must be part of the solution to our energy challenges. Public virtue and private gain must be conjoined.

The principle of environmental stewardship advocated by the faith community will need to find a working partner in some economic interest of a large sector of the economy. The principle of energy efficiency will have to be coupled with the financial interests of workers and employees. Both alliances will have to overcome the entrenched resistance of the naysayers and flat-earth society members.

That very dynamic began to unfold in the pivotal week of January 15, 2007. That historic week started with the announcement that Exxon was abandoning its financial support of global warming-denier organizations, purveyors of propaganda schemes that Exxon had propped up with some of its profits for years. The week ended with the arrival in Washington, D.C., of the CEOs of ten of America's largest corporations, including DuPont, Alcoa, and Duke Energy, to lobby Congress in favor of a carbon cap-and-trade system. Clearly, economic interests had begun to be aligned with environmental principles. In this case, interest in saving money through energy efficiency and avoiding fifty separate state carbon caps in the face of a shifting public mood drove the action.

An even more fundamental force was at play, however, one that President Bill Clinton articulated that same month when he spoke to the House Democratic Caucus: "In this global economy you have just got to come up with a major source of new jobs every eight years, or you're sunk. In my term in office, I was lucky enough to have it be the explosion of software. Now there is one and only one easy answer on how to do it again—energy."17

Clinton's logic is driven by both his innate optimism and his study of the global economy. "Look at England and Denmark, the countries with the two closest economic situations to our own. They have grown their median income while they have kept unemployment down. There is only one possible explanation of how they have achieved this feat while we have been stuck with stagnant incomes—they have energy polices driving growth and we don't," he said.

He was passionate on this topic, pointing the famous Clinton index finger to emphasize the fact that Denmark is now getting almost 22 percent of its power from wind and will generate half its energy from that source within ten years. He was adamant that the energy challenge is a great gift. "We ought to pursue this relentlessly. There are millions of jobs to be created. It's like finding a bird nest on the ground," he said, bringing the first ever Arkansas homily to the energy debate.

The conjunction of the CEOs and the former president presages an alliance that will certainly propel significant steps forward in driving new investment into clean-energy technology. But tougher and more divisive issues will arise on how to move forward, especially in the matter of restraining carbon emissions.

In early 2007 the jousting began over what type of system to implement, a universal cap covering all industries that ultimately cause carbon emissions, or one that covers only point-source polluters. As could be predicted, each industry began to jockey for advantage to try to lay the responsibility for reducing CO2 emissions on another. The fault lines became obvious when at the first hearing on possible improvements to CAFE standards, Joe Barton, a Republican who would normally bristle at regulation, suggested that if his oil industry was going to be constrained by a cap-and-trade system, then, "Doggone it, maybe the auto industry ought to do something more to reduce CO2, too."18 The juxtaposition of these two distinct industrial interests makes for strange bedfellows and strange adversaries. Much of the coal industry and the manufacturing sector will favor an approach in which the transportation sector is regulated beyond just a carbon cap, because they believe that only such regulation would really reduce CO2 from cars. At the same time, if a cap is imposed, the auto companies would likely seek a universal strategy that drives more reductions toward utilities as the simpler regulatory target for securing verifiable emissions.

The interests that emerge will likely create a fault line between energy companies and manufacturing energy users on one side and the domestic auto industry on the other. This battle will play out in the halls of Congress.

In the face of future climate policies, industry will be split on another point as well. Some utilities, notably TXU Energy in Texas (until it radically reversed its strategy of new plant construction as a result of pressure from new investors in a buyout offer), are trying to beat the cap by rushing traditional plants into construction in the hope they will be grandfa-thered by any future regulation. Other utilities, like Duke Energy and American Electric Power, are taking a different tack, building what could become coal plants with carbon capture and storage, in order to prepare for a world in which they must manage their carbon emissions.

On the matter of regulating carbon, there is a third way, a "belt and suspenders" approach. We could use both a universal cap (the belt) and carefully crafted regulations for particular sectors (the suspenders) to capture oil savings from autos, require efficiency in utility planning, and mandate carbon capture in coal plants when the carbon price is not enough to cause those investments on their own. The potential coalition for such an approach could include much of the utilities industry, many manufacturers, the environmental community, the faith community, and Robert Redford; and if the provisions for promoting oil savings focus on the core jobs and competitiveness concerns of automakers, they could be brought into this strategy as well.

That alliance could set the conditions for the sort of economy President Clinton called for, with energy policy that drives growth. As he said, "We ought to pursue this relentlessly." Because, most important, this coalition will also include protection of the health and welfare of our grandchildren as a driving force.

Our commitment to new energy is also a commitment to new generations of grandchildren. We are betting now on protecting our children's children for generations to come. There are worse national endeavors to pursue.

A Tale of Two Presidents

Jay Inslee

In February 2007, both George W Bush and Bill Clinton appeared at the Democratic House Caucus retreat at a conference center in Virginia and addressed global warming. On Friday night, President Clinton wowed the audience of three hundred by demonstrating both a passion for adopting a new energy future and a commanding comprehension of the technologies available to us. When I spoke with him after his speech, President Clinton pounded his fist to drive home his point: "There is only one thing we can do to create the jobs we need—create a new energy economy." This was something clearly close to his heart, and I forgave him for stealing my speech.

The next morning I was tapped by Speaker Nancy Pelosi to address energy issues with President Bush at his meeting with the caucus. When I stood to ask my question, the president started to leave, but with caucus chairman Rahm Emanuel's gentle insistence he took my question. Whether the Decider saw me coming and headed for safety or just wanted to get on his bike, I have only a suspicion.

Having let him put me off at our first meeting on global warming years earlier, I pulled no punches this time: "Good morning, Mr. President. This morning at breakfast with my son we saw a beautiful bald eagle just above the James River. It was there because years ago a president and a Congress acted upon clear scientific evidence to save this grand bird. But then I looked at the front page of the paper this morning, and it had a picture of starving polar bears on a melting iceberg, bears that will be extinct if we do not act. The other local paper reported that Hampton Roads, Virginia, would be partially underwater this century if we do not act. Both papers reported on the unequivocal findings of the Intergovernmental Panel on Climate Change the day before.

"Some time ago I was encouraged when you and I conferred in the White House about global warming. You told me you knew you had a responsibility to act.You told me that you had the best minds in your administration working on a plan you would present. Well, Mr. President, that was six years ago, and I am still waiting. So is my son.

"We know what we have to do. We have to adopt a new Apollo type of energy project to use America's huge innovative talent to solve this problem. Yet we are only investing one-half of what we were in the late 1970s in research.Your administration is just not doing the job.

"So, Mr. President, here is my question: When will you join us in capping CO2 and building a new Apollo energy project so that my son, and my grandchildren, can enjoy the same bounty we do?"

I did not expect him to answer, "Tomorrow," and he didn't.

His answer was disappointing but not surprising, "We'll do nuclear energy. It's a renewable resource that gives off zero gas. Ethanol is going to be good, and cellulosic. I am putting money into these. But the rest of the world is putting out gas, too, and other countries haven't done so well that signed onto the Kyoto Treaty. India and China haven't done anything!"1

In other words, he would help do something real about carbon when hell froze over. His finishing statement was the one that was beyond shocking: "You shouldn't assume I don't care about global warming as much as you do," he said while placing his hand upon his Texas heart. "I care about global warming, I really do."

In the spirit of unending optimism, I talked to President Bush again later that morning and explained to him that his work was fine as far as it went but told him, "You are spending a billion on clean coal, but nobody is going to ever use it as long as they get a free lunch—if there is no cost for sending carbon up the smokestack or no limit on the amount of total emissions.You have got to have a cap to make it work." At that, he had a glimmer of recognizing my point and said, "You mean they won't be driven to it otherwise?" "Right," I responded.

I asked for a chance to meet with him about this point, but he responded by drawing near me and saying, "Working that eagle in there was really good. That was really effective," followed by the trademark snicker. Whether this president does not understand the magnitude of this threat or simply does not care is unknowable, but either way, our country deserves a response.

Afterward, one of my congressional colleagues made an astute observation: "He just has no vision on this. We won't get any help from this president. It's up to us."

All of us.

Chapter 10

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