The Lieberman-Warner climate change bill, known as America’s Climate Security Act of 2007 (S. 2191) will probably come to the Senate floor the week of June 2. The bill would set up a cap-and-trade system with emission limits of 70 percent below 2005 levels by 2050.
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While the global warming crisis is urgent and pressing, the fate of the bill is in question.
On the one hand, even within the framework of cap-and-trade—a market-based solution—the bill’s target emissions reduction is not high enough. The U.N. Intergovernmental Panel on Global Climate Change has called for global emissions reductions of 80 percent by 2050, which would require a 95 percent reduction in U.S. emissions. Lieberman-Warner would lead to between 60 and 70 percent overall reductions at best.
Even these subpar reductions are under attack from the defenders of industries based on fossil fuel that might see reduced profits under cap-and-trade. Sen. Kent Conrad (D-N.D.), while mulling a “no” vote, said: “Obviously, I represent a state that’s a significant power producer. Most people don’t think of North Dakota that way. But we produce electricity for nine states. We have the largest coal gasification plant in the country.”
On the other hand, the bill has the potential to end up being a massive giveaway to the fossil fuel and nuclear industries.
According to an analysis by Friends of the Earth, “One natural effect of limiting the supply of emission rights through permits is that it imbues the permits with real economic value—it turns them into a vehicle for buying and selling the right to pollute.”
The FOE analysis estimates the value of the allowances could range from $5 to $100 per ton of carbon dioxide equivalent greenhouse gas emissions. Given that the bill would cap emissions from 86 percent of the U.S. economy, FOE estimates the system would create permits worth over $5 trillion over the lifetime of the program. If the permits are simply “allocated”—that is, given away—to the polluting entities, the system is a true windfall. The original bill included a combination of allocation as well as auctioning of the permits.
Regardless of whether the permits are auctioned to the highest bidder or simply given away, the bill is engineered to guarantee that the industries that create greenhouse gases have the potential to continue to make profits under this regulatory system.
Accommodating capitalist polluters
In an effort to save the bill, after months of negotiating with Lieberman and Warner, Sen. Barbara Boxer has released a new version of the bill, which will likely be the one debated in June.
This version includes a so-called “emergency off-ramp,” which reads, “If the price of carbon allowances reaches a certain price range, there is a mechanism that will automatically release additional emission allowances onto the market to lower the price.”
Boxer’s version also includes massive “transition assistance” for fossil fuel and heavy industry, along with handouts to agriculture, construction industry, biofuels producers and more. Boxer’s version also promises to be “deficit neutral,” meaning it will not result in any additional cost to the federal government.
Lieberman’s office has claimed that the bill “would be the most historic incentive for nuclear in the history of the United States.” Warner believes that a nuclear provision and other changes that have been incorporated into the bill could bring along more support for the overall measure.
“We’re never going to achieve the goals [in the bill] unless we have a lot more nuclear power in the United States,” said Lieberman. The modified bill would give the president discretion to pull back on the bill’s emission reduction goals in the face of economic woes, inadequate technology or to address national security or other emergencies.
Nuclear energy is being touted as an alternative that does not contribute to global warming. However, the nuclear industry is currently not capable of significantly increasing energy generation above present levels. Also, there are meaningful concerns about the safety of nuclear power.
The Lieberman-Warner bill initially generated a lot of excitement in the environmental movement, because it appeared to be the first real attempt to reduce U.S. emissions with a chance to become law. Many have argued we need to begin the process of emissions reductions right away and not wait for a perfect piece of legislation.
That much is true, but the political process under capitalism makes it inevitable that a law to reduce emissions must be made acceptable to the capitalist polluters. As popular concern about global warming increases, it becomes important to the capitalist politicians to at least appear to be doing something about the problem. However, without a mass, militant movement to stop global warming, all the politicians will offer up will be half-measures that assure the continued flow of profit into the polluters’ coffers.
