‘Clean Energy’ takes a hit
How far we haven’t come.
(Photo by Marcus Spiske, courtesy of Unsplash)
Remember the American Clean Energy and Security Act of 2009? (“Waxman-Markey Clean Energy Bill,” named after sponsors Sen. Ed Markey and Rep. Henry Waxman)
Well, we’re about to hear more about it as negotiations on the ‘Two Point Whatever Trillion’ Infrastructure Bill gets sliced and diced.
In sum, the ‘Waxman-Markey’ Bill was a ‘cap and trade’ carbon emissions bill:
“The cap in ‘cap-and-trade’ system determines its environmental stringency by setting the number of emission allowances that are available. These allowances are equal to the amount of emissions that are permitted under the cap and their number declines over time as the cap is tightened. From an environmental perspective, it doesn’t matter how the emission allowances are distributed. They could be auctioned or freely distributed or any combination of the two. All that matters is the total number of emission allowances that are distributed — the environmental goal is determined by the cap itself and is not in any way impacted by whether the allowances are auctioned or distributed freely.”
-c2es.org
In 2009 The American Clean Energy and Security Act passed the House but not the Senate.
This time will ‘Republicans+Manchinema’ come around on ‘clean energy?’ Not likely.
Yet another argument against use of the filibuster on House-passed environmental legislation: a six year term renders serious climate-reckoning legislation moot in the US Senate. It won’t happen because it can’t happen.
What may happen is that after America gets bruised in the upcoming Glasgow confab by our global neighbors, ‘clean energy’ legislation will return as it has in 2009.
It’s not going away because it can’t go away.
Except ‘next’ time, expect more labor repression: ‘Clean Energy’ has more to do with labor and wealth distribution issues than saving Western Hooded Owls. (1)
At some point the market/trade model will fail and austerity measures will come into play. This is not a jeremiad; this is historical fact. World War II comes to mind.
By positioning any guardrail on free non-renewable exploitation as punishment, Republicans will agree that ‘austerity’ is not the way to go.
Let’s revisit ‘clean energy’ through this prism: incentivize progress and tax waste.
Now this doesn’t sound so bad, does it?
Remember the 1956 Interstate Highway Act? This bill was really a large “tif,” ‘you pay as you go;’ offset cost with future tax revenue. The Interstate Highway Act was very popular and transformative. Borrowing on this ‘tif’ model one sees a similar financing structure to the Waxman-Markey ‘cap and trade’ model: leverage future participation.
Current ‘Clean Energy’ proposals take this reasoning a step further by re-distributing production from one dependent on non-renewables to one dependent on renewables. It’s a redistribution of production.
A critique of both models.
Structurally, ‘cap and trade’ keeps the current market for fossil fuel dependency in place; so does a tax on carbon emissions. And this wizardry may help for a while and look good on paper, but one wonders what has really changed and why these schemes are risky on multiple levels:
1.No restoration
2.Increases disinvestment
3.No-teeth monitoring
The allowance structure in Waxman-Markey is a market of sorts with players-including lobbyists-setting the rules. This puts the consumer at a disadvantage. And in a way the fossil-fuel industry has already beaten the ‘cap and trade’ advocacy to the punch: less than a year after Waxman-Markey failed in the Senate, fossil-fuel investment dollars began blooming. (10/14 NYTimes article).
“Clean Energy’s” model of ‘incentivize progress/tax waste’ minimizes the impact on the consumer. A benefit of the Interstate Highway Bill was effective development and distribution of gasoline. The consumer, the driver, paid a ‘gas’ tax. Because the tax was regressive, lower income consumers paid more as a proportion of income.
‘Clean Energy’ would tax production waste not energy consumption, which will yield an increasing transition to renewables as prices of non-renewables rise. The players are end-use consumers as well as distributors.
We tax accumulation of wealth; what is so different from taxing accumulation of waste? Which is what carbon emissions and other non-renewable source emissions are: waste.
But won’t the tax cost be passed along to the distributor/consumer? Yes and no. The ‘consumer’ will need a voice and our current institutions-to save posterity-will need to listen.
Any environmental policy corrective impacts labor, the ‘cost of production,’ and the stability of a work force. Here we can learn from the pandemic. Energy consumption dropped. Jobs were lost. Wealth inequality increased. Again, environmental policy such as ‘clean energy,’ will need to remove institutional barriers for transitioning labor to new opportunities, something Democrats, as well as Republicans, seem powerless at achieving.
The ‘elephant in the room,’ is why does labor pay disproportionately for industry dislocation and a transition away from fossil fuel dependency?
‘Education and retraining’ are convenient remedial bromides. The worker still carries the burden of ‘re-tooling.’ And in some areas, coal and fracking states in particular, the cost of labor dislocation means social dislocation, addiction, increased financial and family risk. New institutional ‘markets’ need developing to leverage owner participation.
In sum, keeping the existing ownership structures where labor takes the preponderance of risk is immoral.
More than a public relations threat to Biden and the Democrats, Glasgow can provide a lesson to America, widely viewed as a consumptive emission-spewing behemoth. ‘Cap and trade,’ albeit less proscriptive than ‘Clean Energy,’ has been in force in the EU since 2005.
That’s four years before Waxman-Markey failed in the Senate and sixteen years before ‘Clean Energy,” which -again- is likely to fail Senate approval.
October 18
Epilogue
October 20 (update): ‘Clean Energy’ proposals are victims of lowering 2021 Reconciliation package from $3.5T to $2T.
Sen. Ed Markey was re-elected in 2019, beating a Kennedy in the primaries which in Massachusetts is notable.
Rep. Henry Waxman retired in 2014 after serving 40 years in the House.
1-As the World Burns https://www.newyorker.com/magazine/2010/10/11/as-the-world-burns
