We’re in the health care reform endgame, so to speak. A bill has passed through both houses of Congress, and it is likely to pass before the State of the Union address in February. Even though it’s an election year, Congress still has to do its job – namely, work on some arguably more important issues than health care reform: financial regulation, job creation, climate change and immigration.
Climate change is of particular interest to this Congress. Nobody is quite sure whether any form of the cap-and-trade proposal that passed the House and has been set up in bills in the Senate will even receive a vote this year; odds of any bill passing with a carbon cap are slim-to-none. Nebraska’s senior senator, Ben Nelson, has already indicated (with a group of other Democratic moderates) that they’d prefer a bill without a cap-and-trade system this legislative session, if one is brought to the floor at all.
This incremental approach, while wise in nearly all aspects of government, will not work well to combat the problems that climate change will cause in the coming century. Nearly all scientists in peer-reviewed journals, from Maine to Brussels, are seeing the same, staggering conclusions – even a two-degree increase in the Earth’s temperature (rising steadily upward over the past century) would, according to The Guardian, turn the Amazon into desert, make the oceans too acidic for coral reefs, expose 60 million people to a higher risk of malaria and so on.
Nevertheless, an incremental approach is all our government has to work with, especially in an era where 40 members of the minority party constitute a majority in the Senate. Thus, it’s worth taking the time to look at what Congress might pass in this session.
Congress will, in any bill remotely related to energy, include increased incentives for companies to develop renewable fuels like solar, wind and geothermal energy. There will be funds for nuclear energy (sorry, environmentalists, but if you take a look at France’s nuclear-power-dominated energy system, you’ll realize we’re a long way from Three Mile Island). There will be funds for offshore drilling, and there may be funds for drilling in the Arctic National Wildlife Refuge. There environmentalists might draw the line – and that’s not a deal-breaker for moderate Democrats, who are primarily concerned with the impact on farmers and manufacturing.
The American people, for whatever reason, favor cap-and-trade legislation by a narrow majority, according to public opinion poll. But I doubt many people could explain what a cap-and-trade system is.
Cap-and-trade, simply put, is a free market approach toward regulating the amount of carbon in the atmosphere. Because it’s so strongly capitalist in nature, it fits well with the individualism and the fear of government involvement our country has developed. In a cap-and-trade system, the government sets an amount of carbon that is allowed in the air, and auctions off permits at a set price per ton of carbon, giving companies the right to pollute that much. To gain the support of moderates in the House, though, most of these permits, upward of 80 percent, would be given away to energy companies for free. The government then lowers the amount of permits available each year and decreases the amount available for free.
This system, if less were given away for free, would encourage companies to pollute less so they have to pay for fewer permits. Moreover, companies can sell extra permits they don’t use to higher polluting businesses in the market; carbon becomes something that is bought and sold on a stock exchange.
Cap-and-trade, if well-designed, works. The program in the bill that passed the House is mediocre at best and might work to control the amount of pollution in the skies. A simpler alternative would be a flat tax per ton of carbon. But we all know how averse the American people are to taxes, and this would disproportionately affect American manufacturers.
There is, however, another way to achieve the same goal with an arguably much higher upside. Senator Maria Cantwell, D-Wash., and Senator Susan Collins, R-Maine, released a 37-page set of legislative text (a miracle in length for Congress) that establishes a cap-and-dividend approach to regulating carbon. Their proposal has the backing of Exxon-Mobil, a huge polluter, and MoveOn.org, a far-left political action group.
Cap-and-dividend works in a fairly unique way. Carbon is still capped and permits are still sold. However, instead of proceeds going to the government, most of the money collected will be returned to the people who own the skies: that is, you and me and every other American family. Cantwell and Collins estimate that under their plan (where 80 percent of the permits are auctioned and 20 percent given away) each and every American family would receive over 1,100 dollars. In comparison, independent estimates of the costs of current legislation show energy bills for most Americans will go up approximately 150 dollars annually. In the recovering economy, Americans deserve to make a profit off of the sky.
So, if Congress does its job, here’s what Americans will see in any energy-related bill: money for renewable energy, nuclear energy, encouragement for hybrid cars, smarter use of electricity (when it’s cheapest) and money to develop offshore drilling. There might be a cap-and-trade or cap-and-dividend system in the bill; there might not. In any case, the bill encourages a “green” economy, with jobs for manufacturing and installing things used in renewable energy sources. Regardless of the initial cost, it’s a smart path for our country to be on.
Zach Smith is a Junior Music and Political Science major. Reach him at zachsmith@
dailynebraskan.com.
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