A New Outside-the-Beltway Climate Bill Deserves Support; Why Won't Enviros Get Behind It?

Whatever President Obama promised in Copenhagen, Congress will have to deliver. The near-term prospects are dim. One key problem is that until recently, all climate bills have been assembled by hundreds of legislators trying to placate thousands of lobbyists. The results have been predictable. Virtually uninhibited carbon trading, a Wall Street delight, is at the core of most climate bills. The projected emission reductions are often more aspirational than real. Carbon allowances are dispensed freely and widely to buy off virtually every interest group.

Last June, by a vote of 219-212 a climate bill did squeak through the House. For all its weaknesses, most environmentalists came out in support because it marked the first time the United States Congress has legally committed this country to reducing greenhouse gas emissions. To some, including me, the bill's flaws exceeded its symbolic benefit. (See my analysis here.)

In the Senate, little progress has occurred in the last 12 months. In late October, Senators John Kerry, D-MA and Barbara Boxer, D-CA finally introduced a bill. Few think it has a chance. Apparently even Senator Kerry harbors doubts. In early December he joined with Senators Lindsey Graham, R-SC and Joseph Lieberman, I-CN to offer a new framework for a climate bill that encourages more oil drilling, expanded nuclear power and a continued reliance on coal.

While Democratic Party leaders have been talking to lobbyists inside the Beltway, Senator Maria Cantwell, D-WA and her staff have been looking for answers from activists and experts outside the Beltway. The result is the Carbon Limits and Energy for America's Renewal (CLEAR) Act. Co-sponsored by Susan Collins, R-ME, this groundbreaking bill avoids the compromises and subterfuges of existing climate bills and embraces a new philosophical and strategic approach.

What are the elements of that approach?

First, blessed brevity and transparency. CLEAR is just 39 pages compared to Waxman-Markey's 1,498 pages and Kerry-Boxer's 821 (a number that will grow considerably as it wends its way through a half dozen committees). You can read CLEAR in one sitting and understand how its pieces fit together. This is no small legislative accomplishment.

Second, an upstream rather than downstream focus. Rather than restrict carbon emissions CLEAR restricts carbon inputs. Rather than regulate a power plant or manufacturing plant's emissions it restricts the amount of carbon contained in the fuels used in that power plant or factory. This strategy dramatically decreases the number of regulated producers and even more dramatically reduces the cost and complexity of monitoring.

Third, a 100-percent auction of the carbon allowances. Polluters will have to pay for their pollution from the start.

Fourth, a significant restriction on carbon trading. CLEAR treats carbon trading as a necessary evil, not the core of an emission reduction strategy, thereby probably earning the senators the eternal hatred of a Wall Street salivating over the potential bonuses another multi-trillion-dollar global securities market would generate.

Fifth, a cap and universal dividend policy. CLEAR returns 75 percent of the money generated by the auction in equal per capita dividends to all Americans. Why is this important? Because Americans aren't stupid. Despite what the authors of other climate bills say, we know that reducing carbon means increasing the price of carbon and therefore the price of most goods. CLEAR's dividends ward off a potential uprising when prices do increase by offsetting the increase in prices for the majority of Americans no matter how high the price of carbon goes and potentially allowing low-income households to generate a "profit."

Regrettably, the major papers and media ignored the bill's introduction. Possibly they were overwhelmed by coverage of the dramatic health care debate or the machinations in Copenhagen, although they did find space for prominent coverage of the Kerry, Graham and Lieberman framework letter to the White House.