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Is There a Republican Alternative to Cap and Trade?

November 4, 2010 - by Donny Shaw

With a Republican House and a shrunken Democratic majority in the Senate, one of the big Democratic policy goals that we can safely kiss goodbye for the next few years is a cap-and-trade climate change bill. But with the uncertainty of 2012 and the pressing nature of the climate issue, Obama and the Democrats will probably still want to do something in the next session of Congress to make progress on the issue, even if it’s not as strong as they want. Here’s a look at where Democrats and Republicans could find agreement on climate change action.

There are a few bills with Republican support in Congress right now that are designed to cut down on greenhouse gas emissions. They include Sen. George Voinovich’s [R, OH] “Enabling the Nuclear Renaissance Act” (S.3618) and Sen. Maria Cantwell’s [D, WA]CLEAR Act” (S.2877). But these aren’t really comprehensive, and they don’t seem to have deep enough support to pass the divided Senate next year.

The one bill that seems to have deep Republican support that some Democrats could conceivably get behind as at least a step in the right direction is Sen. Richard Lugar’s [R, IN] “Practical Energy and Climate Plan Act of 2010” (S. 3464). Its co-sponsors include Sen. Lindsey Graham [R, SC], who was one of the central players in climate bill negotiations last year (though he ended up backing out), and Sen. Lisa Murkowski [R, AK], who has taken more money from electric, oil and gas companies than just about anyone else and typically leads efforts against any energy legislation that the utilities don’t like.

This bill’s designed to reduce U.S. dependence on foreign oil, make energy consumption in the U.S. more efficient, and shut down some of the dirtiest power plants. Lugar estimates that it would accomplish “nearly half the president’s 2020 greenhouse gas emissions goal,” though there is no mechanism in the bill specifically for ensuring that any targets are met.

It would establish benchmarks for industries to diversify their energy sources away from coal, but it’s designed to be flexible and to allow states to grant temporary waivers to companies that say that they will catch up with requirements in the future. The baselines for diversification range from 15% by 2019 to 50% by 2050. Under the bill, diversified energy sources include solar, geothermal, wind and hydropower, but it would also allow some more controversial sources to qualify, including, nuclear, biomass, and “advanced coal.” Old fossil-fuel dependent plants would be allowed to opt out of the diversification requirements if the sign an agreement to cease operations by 2019. This could have the effect of exempting these plants for several years from any new EPA emissions requirements that could encourage them to shut down sooner rather than pay for the necessary upgrades.

In order to increase energy efficiency, the bill would set up a new federal-state partnership for helping energy-intensive industries finance transitions to more efficient technologies and processes. It would also set up new national minimum targets for energy efficiency in new building construction and help homeowners retrofit their homes.

Another major provision in the bill would revise vehicle fuel efficiency standards to be approximately in-line with recent EPA proposals. The bill would codify the Obama fuel efficiency standards proposal of May 2010 (a fleet-wide average of 35 miles per gallon by 2016), and then raise that standard by 4% every year thereafter. That would mean the standard would be above 40 mpg by 2020. However, the bill allows the Transportation Secretary to issue a waiver if they determine that the efficiency standards are unachievable, and with car companies already saying the proposed new EPA targets are impossible, it’s easy to imagine the waiver being issued under the pretense of helping the already struggling auto manufacturers.

Needless to say, this bill is probably an insufficient response given the scientifically-verified urgency of the climate situation. But, considering the political realities, for action from Congress over the next few years, it’s probably something like this or nothing. The question then, as always with these kinds of compromises, is is it worth it now, or should we hold out?

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