Saturday, December 12, 2009

An Open Letter to the Union of Concerned Scientists Regarding its Criticism of the Cantwell-Collins Bill

Dear UCS,

As one of the economists who signed in support of the UCS campaign for climate change legislation, I have to express my disappointment with your response to the Cantwell bill.

1. It is by far the best bill before Congress. It has two features that any serious environmentalist should enthusiastically support: no offsets and upstream (comprehensive) permitting. This is the right architecture. It is simply shocking to me that the bill would be criticized on exactly these grounds! You appear to endorse offsets as a means to secure an international agreement, as if this discredited approach were the only basis for moving forward globally. Clearly UCS is not paying attention to the current discussion around the validity of offsets.

2. You criticize the 2020 targets in Cantwell, but specific targets are meaningless. No matter what bill is passed, Congress will be revisiting these targets every year or two as new scientific evidence emerges and political winds shift (for better or worse). Any target announced today for more than a decade into the future is purely symbolic. What matters is getting the architecture right, so that, if there is political support for more stringent goals, they can be accomplished expediently.

3. Remarkably, UCS sees fit to attack the Cantwell bill on the other feature it gets right: it auctions all the permits and distributes most of the money back to households. Aside from the other justifications for this approach, it is now clear that this is the only way there can be enough political support for serious GHG mitigation. UCS' advocacy for spending carbon revenues on its own desired projects is politically naive. (a) UCS and its environmental allies will not control the allocation process. If Congress gets to parcel out these funds, you can be sure that most will go into "clean coal", biofuels, etc. (b) Carbon revenues are available to be allocated only if Congress passes a bill with a reasonably tight cap, provisions for auction, and few or no offsets. But this will be achieved only if the electorate is convinced it will not be at the expense of their household budgets. Only revenue recycling can accomplish this.

So why on earth has UCS adopted this position? Can it be because you have decided that Kerry et al. is the horse to ride, and that any other approach is a distraction? If so, you should say this and not trot out implausible and disingenuous arguments.

Again: I am really disappointed in UCS. I can't see myself signing any more of your petitions in the future, and in saying this I know I speak for many other environmentally-aware economists.

Peter Dorman


david said...

Where does the letter endorse offsets?

Totally agree on the revenue side, though maybe not on the extent of how bad the letter is.

Peter Dorman said...

I read this as code for offsets: "financial assistance to help protect tropical forests, support clean technology deployment in developing nations..."

Rachel Cleetus said...

Dear Dr. Dorman, your open letter to the Union of Concerned Scientists, dated Dec 12, only just came to my attention (Unfortunately, it was not sent directly to anyone at UCS, hence the delay). I wanted to respond to some of the important issues you raise.

UCS recognizes that the Cantwell-Collins bill (Carbon Limits and Energy for America’s Renewal Act or CLEAR Act) is an important bipartisan effort. However, as a science-based organization, it is our responsibility to take measure of how much it will actually reduce U.S. heat-trapping emissions. Our analysis shows that it falls far short of what is necessary -- both because the cap is too lax and because it does not cover all emissions in the economy. The aspirational goals outlined in the beginning of the bill are not matched by corresponding substance within the bill. In fact the bill would only reduce CO2 emissions by about 6% in 2020 from 2005 levels. (You can also see an analysis by WRI that shows that the bill reduces overall emissions 1% from 2005 levels by 2020. )

As you say, this target could be adjusted over time if the bill had an enforceable "science review" provision. Were this bill to come to the floor, we would certainly work to ensure that is the case -- as we are doing with the other bills under discussion.

You have misunderstood our support for financial assistance to help protect tropical forests, support clean technology deployment in developing nations, and help vulnerable populations cope with the unavoidable effects of climate change. This is not about offsets at all, but about how we (the U.S.) are going to step up to our international obligations under the UN framework convention on climate change. As part of a global effort, the U.S. must provide financial support for developing countries to get access to clean, low-carbon technologies; help protect tropical forests which are a source of 15% of global emissions; as well as help the most vulnerable countries cope with climate change. Both the Waxman-Markey bill and the Kerry-Boxer bill provide funds for this by allocating a portion of the value of the allowances to these purposes. The Cantwell-Collins bill, as introduced, does not. We called attention to this with a view that the bill could be improved by including funding for these important purposes.

To transition to a clean energy economy, we have to commit to making big investments in efficiency and renewable energy now. This is good for our economy and good for the American people. If we simply put all the money back in our pockets, we will not be able to make the important collective choices we need to make as a forward-looking society. That said, a good climate and energy bill would also ensure that consumers are protected. The Kerry-Boxer bill does this by helping bring down energy bills through investments in efficiency and renewables in the early years, and by ramping up direct rebates to consumers in the out years. This approach, or some variation of it, is a sensible one.

Finally, I would like to make clear that UCS will always support any serious action to curb global warming. The legislative process is unwieldy and comprehensive climate and energy legislation is necessarily complex, so we certainly understand that we will not get a "perfect" bill. However we will work tirelessly to strengthen and pass a good bill. I hope you will see fit to join us in that effort even if we may not be in complete agreement on all the specifics.

Rachel Cleetus, Ph.D.
Economist, Climate & Energy Program
Union of Concerned Scientists