Now that global warming is a hot political topic, our society is moving rapidly toward policy choices on how to slow and reverse it. If we want the transition to clean energy to be fair and effective, we citizens must understand the options. So let me share insights I took from a recent conference about policy choices likely to come up in Congress that involve billions of dollars.
A system called “cap and trade” is widely advocated in the United States, and already in use in Europe, as a way to get industries to reduce the carbon they pour into the air. The system “caps” the total rights to emit carbon and allows industries to sell their pollution rights. By reducing the cap 2 percent each year over the next 40 years, we can reach the 80 percent reductions that scientists say we need to avoid climate catastrophe.
But the devil is in the details. We must all understand key choices in the cap and trade system if we are to help our lawmakers do what's good for everyone.
One choice is whether to start the system by giving industries carbon rights for free based on their current pollution levels. The coal, oil, and gas industries relish this approach. They call it being “grandfathered in”—a sweet term for a multi-billion dollar giveaway that leaves the public in the cold. It would be a lot like the 1996 Telecommunications Act, which gave broadcasters billions of dollars worth of our airwaves without the public getting a dime.
A better option is to make all industries pay for the right to put carbon into our air. Hold an annual auction where industries bid for carbon rights. Industries that pollute the most would have to buy the most rights, creating an incentive for cleaner energy.
Another choice regards who holds the auction and gets the payments. In the Spring 1999 issue of YES!, Peter Barnes, author of Who Owns the Sky?, suggested creating a Sky Trust that recognizes that the atmosphere belongs to all of us and payments for its use should benefit everyone. The Sky Trust would auction carbon emission rights under an enforceable mandate to obtain the highest price. The trust would receive the payments and disburse them for the public good. One possibility is to distribute the proceeds equally to every U.S. adult, helping us all cope with the costs associated with abating global warming.
A third choice is whether to allow “carbon offsets.” With offsets, a polluting coal plant, for example, could spend a modest sum to have trees planted in Honduras and claim it doesn't need to reduce its pollution because its carbon was “offset” by the carbon the trees absorb. As Europe has found in its cap and trade system, offsets open a quagmire of questions and conflicts. Might the trees have been planted anyway, so they are not a real offset? Were they actually planted? Did they ever grow big enough to actually offset the carbon? Offsets open giant loopholes. It's like trying to inflate a balloon with a hole in it.
Is it realistic to think Congress could resist the biggest polluters' push to give them the carbon rights? Might we actually create a public Sky Trust? Can we avoid loopholes that undermine the system? Environmental groups are starting to educate their constituencies on this issue—I personally learned a lot from Rob Sargent of U.S. PIRG, one of the people at the conference and at the forefront of this issue. Big corporations that aren't major polluters can be allies. They don't want the fossil fuel industries to walk off with windfall profits. And public pressure for real solutions is building.
So we've got a chance to move to clean energy in a way that benefits everyone. But that will happen only if we citizens understand the choices and make our voices heard.