logo
  Join        Login             Stock Quote

New Deal for U.S. Climate Policy?

 December 14, 2009 07:28 PM
 


This guest post was submitted by James K. Boyce, an economist at the University of Massachusetts, Amherst. He has been a proponent of a "cap-and-dividend" policy to curb global warming while protecting the incomes of American families.

Last Friday, Senators Maria Cantwell (D-WA) and Susan Collins (R-ME) unveiled the CLEAR (Carbon Limits and Energy for America's Renewal) Act, which could break the impasse in the debate over U.S. policy on climate change (McClatchy coverage is here.)

[Related -Foot Locker, Inc. (FL) Put Options Active As Stock Gets Stomped]

CLEAR has won a favorable reception from a broad swath of the political spectrum, ranging from ExxonMobil to Friends of the Earth. The scroll of supportive statements on Cantwell's website includes praise from the AARP, the American Enterprise Institute, former U.S. Labor Secretary Robert Reich, Alaska's Republican Senator Lisa Murkowski, and MoveOn.org.

CLEAR is a "100-75-25-0" policy:

  • 100% of the permits to bring fossil carbon into the U.S. economy will be auctioned from day one – there are no permit giveaways.
  • 75% of the auction revenue is returned directly to the public as equal per person dividends.
  • 25% of the auction revenue is devoted to investments in energy efficiency, clean energy, adaptation to climate change, and assistance for sectors hurt by the transition from the fossil-fueled economy.
  • Zero offsets are allowed: polluters cannot avoid curbing use of fossil fuels by paying someone else to ostensibly clean up after them.

[Related -Trade Deficit Narrows, Will Boost GDP Estimates]

The Cantwell-Collins bill also strictly limits the buying and selling of permits to prevent carbon market speculation and profiteering.

In all these respects, the 39-page CLEAR Act differs markedly from the Waxman-Markey (ACES) bill that passed the House in June, whose cap-and-trade provisions (Title III) alone run to 410 pages. Waxman-Markey initially gives away 85% of the permits. Dividends to the public eventually would grow to about half of the permit value pie, but not until the 2030s. The House bill's offset provisions would turn the emissions cap into a sieve, and have stoked worries about creating a "subprime carbon market" (see and Annie Leonard's animated primer). We need to cap carbon, but we do not need to cap-and-trade or, especially, cap-and-give-away. Instead, we should cap-and-dividend.

The New York Times reported on the  on the legislative sausage-making that went into Waxman-Markey. The redolent process, lubricated by special favors to special interests, has stalled since June with legislative arteriosclerosis; its backers now hope that passage can be cleared by implanting stents to boost nuclear power and transform America into "the Saudi Arabia of clean coal."

The road to a Senate-led compromise is open: CLEAR could replace Title III of the House bill, while keeping the other titles that set forth non-price policies to promote energy efficiency and clean energy. The resulting comprehensive climate policy could have a real chance of becoming the law of the land – and the air – in the year ahead.

By James Boyce

iOnTheMarket Premium
Advertisement

Advertisement


Comments Closed


rss feed

Latest Stories

article imageThe Chip Maker Short Sellers Should Be Watching

Investing in semiconductor stocks is always tricky. Industry cycles can lead to bumps in the road for the read on...

article imageChicago Fed: US Economic Growth Slowed In October

The pace of US growth slowed more than expected in October, according to this morning’s update of the read on...

article imageHoliday Fever Takes Hold Of Stock Investors, But A Pullback Is Needed

With warmer weather arriving to melt the early snowfall across much of the country, investors seem to be read on...

article imageIs 0% Growth For 90% A Successful Economic Model?

Via Greg Mankiw I read the review of Piketty's book by Deirdre McCloskey. The review reminds me of the read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.