The spookiest news I’ve heard so far this Halloween is the report from Politico.com that the seven Republican members of the Senate Environment and Public Works Committee will boycott next Tuesday’s planned markup of the Kerry-Boxer climate legislation. Ah yes, the “screw you guys, I’m going home” tactic. How productive.

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Sandbag buys up carbon credits from those who have already made energy efficiency  investments and as a result have cut their pollution to below their previous level. We buy these clean companies’ credits through Sandbag, and then destroy them so dirty companies can’t buy them.

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Olympia Snowe’s support of the finance committee draft puts health care back in play, but without a public option. The Graham-Kerry compromise climate bill would start to cap carbon, but also allow coal to cash in. Can Obama’s progressive base settle for incrementalism? If Arriana Huffington speaks for the movement, HOPE may not hold out in the face of so little CHANGE during the 2010 mid-terms. </p>

After so much bad news on health care, the White House and Senate Dems are clinging to Senator Olympia Snowe’s support of the Finance Committee draft bill. While the bill does deliver on some of the key provisions the White House wanted - including insurance company restrictions on applicants with pre-existing medical conditions - it does not include a public option. What’s more, with CBO costing the “bipartisan” bill out somewhere north of $800 billion, there is little doubt that as amendments are made and more scrutiny is placed on estimated Medicare savings, a $1 trillion price tag is going to put Snowe’s support at risk (to say of nothing of some already-reluctant Democrats.

Similarly, the climate bill strategy that Senators John Kerry and Lindsey Graham proposed in their New York Times Op-Ed may make passage more likely as some pundits have argued. But, it cannot please progressives to see so many giveaways already - before the Senate has even begun trading horses in earnest. The Graham/Kerry compromise promises to make America “the Saudi Arabia of clean coal,” polishes the drills for more domestic drilling, and lifts restrictions to allow for faster proliferation of new nuclear plants. Not exactly the kind of thing that will warm hearts among hardcore conservationists.

But, a health care bill that restricts companies from discriminating against pre-existing conditions and a cap-and-trade regime (even one with a price collar and a lot of allowances) mean something to the progressive base, right? Not necessarily.

Arianna Huffington, a thought leader of the progressive movement, lambasted Obama and the incremental approach over the weekend on This Week and again on NPR’s On Point. Huffington’s argument is that “No Child Left Behind” is a cautionary tale that the Obama White House should study well. In her reckoning, the Act made no real progress in improving American education, but it gave the Washington establishment cover to say, “we dealt with education,” sapping momentum for any real and renewed action on the issue in the Obama administration.

Could the same happen to Obama’s health care and climate agendas if the Dems take pennies on the dollar for all of the political capital POTUS has invested? And will their base settle for the incrementalist approach anyway? He might have been able to argue the “old college try” if hopes had not been so high, promises so lofty, and the stage seemingly so well set (including the sort-of supermajority in the Senate). Instead, with little more than promises on progressive hot-buttons like Iraq and Afghan deescalation, Gitmo closings, repeal of “don’t ask, don’t tell,” health care and climate change, patience among progressives is wearing thin.

The political calculation is tricky. The White House - and Dems facing fights in the 2010 mid-terms - might be better to take outright losses on these watered-down bills, hold their line, and position the GOP as obstructionists in order to reenergize the progressive base.

Photo credit (CC) JD Lasica, socialmedia.biz

The U.S. Chamber of Commerce promotes itself as the “voice of business” by representing business ideas and interests in Washington.  Really?  If this is true, then why are so many businesses leaving the Chamber?  So far, high profile utility companies such as Exelon, Pacific Gas & Electric and PNM Resources have left the business association.  Apple recently sent a letter to the Chamber’s CEO, Tom Donahue, resigning their membership effective immediately.  It appears the U.S. Chamber of Commerce is doing an inadequate job of representing current business interests.  So what is all the defections and hoopla about?  Climate Change…

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Desert Hills Dairy of Nevada has joined with Carbon Bank Ireland, an emerging leader in cap-and-trade carbon emissions markets, to build the state’s first biogas facility to convert cow manure into electricity.  Along with producing enough sustainable methane to power itself and other equipment at the second largest dairy in Nevada, the high tech digester will produce liquid fertilizer and mulch.

Carbon Bank Ireland specializes in harvesting certified emissions credits from sustainable energy projects, which can be traded in the European carbon markets. While some pundits claim that cap-and-trade is “socialism on a grand scale” (whatever that is), that doesn’t appear to bother the cows.  It also doesn’t appear to bother Nevada, which sees a lot of green in its future.  As reported by Nevada Appeal writer Kirk Caraway, interest in the state’s rich solar, wind and geothermal resources is surging, and it is becoming a desirable location for start-ups that are developing sustainable projects such as the capture of waste heat and the development of hi tech batteries.  Green jobs, anyone?

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What the tobacco industry learned from the early days of “doctor recommended” cigarettes through to that hearing in ‘94, was that all it took to sell the idea that smoking was good for you - or at least not that bad - was a dose of misinformation combined with a perception of scientific legitimacy in questioning established research. By tossing out a reasonable sounding tidbit of information you can keep uncertainty alive in the public’s mind and thwart progress.

Which leads to the obvious conclusion that if plants need CO2 to grow, then more CO2, not less, is what the world needs now.

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The House Waxman-Markey bill has drawn criticism for being too friendly to utility companies, who would be handed a large percentage of the carbon credit allowances created. That criticism has come not only from environmental advocates who are concerned that free allowances will undermine the value of a cap, but also from other business interests who see the credits creating a potential windfall for utilities - especially those who already generate much of their power from cleaner fuels.

The Chamber’s opposition to Waxman-Markey is understandable when you consider that they represent a broad cross-section of business sectors, including many that did not fare as well in the negotiations as Waxman-Markey took shape. For their part, the Chamber has responded to the recent defections by noting that it only opposes the House bill itself, and is not opposed to the idea of climate-change legislation. According to their COO David Chavern, “Congress should do everything it can to promote and incentivize technology development and other policies that allow us to control carbon in ways that don’t trash the economy.” The fact that the Chamber’s site was unavailable on the morning of Exelon’s announcement indicates that the public may not be ready for so nuanced a position.

Might the departures be a harbinger of movement away from the Chamber across the entire utility sector? Or, should they be viewed as evidence of a fracture within the industry? Utilities that rely more heavily on coal and other dirty fuels share the Chamber’s concerns about cap-and-trade’s impact on the cost of their power. By contrast, PG&E, PNM, Exelon and others that are already invested heavily in cleaner fuels can afford to appear green. It may even be profitable.

The Chamber is in the news right now, but the place to watch as the Senate picks up debate of its own bill will be the utility trade group, Edison Electric Institute, which represents the investor-owned companies on both signs of the fuel type divide. EEI has already been engaging Senate leaders in a way that tries to split the difference for its membership: they are not running from Waxman-Markey, but they have some suggestions for improvement on the Senate side.

This dust-up may be all the more costly for utilities, their trade group and the Chamber if long-term discord is fomented for naught. The Senate will need 60 votes to get a bill. It will be tough to get there as Democrats hailing from industrial and agricultural states have the 1993 BTU Tax debacle in their memories and a 2010 election year in their sights. And, with political fallout that could be even more dramatic than the squabbles that are now unfolding in the business community, there may not be a Senate climate bill in 2009. Either way, the utility industry will be left to mend fences. The questions now are whose fences, and how many?

The White House still lists climate change legislation as one of its priorities, but with Senate action on a bill getting pushed deeper into September - and closer to oblivion for 2009 - greens cannot help but worry that their cause will not only be eclipsed by health care, but also by the economy generally, unemployment specifically, and even foreign policy issues like the escalation in Afghanistan.

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However, it also comes in for some anger from the rest of us, who do support the idea of funding a transfer to a renewable energy economy, but worry that we will pay higher costs and believe that the Cap and Trade bill gives too many initial free allowances to polluting industries. But this anger may be unwarranted.

Consumers are shielded from rising energy costs with most of the allowances:

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With heavy subsidies in place for nuclear power, France already generates 80% of its electricity from non-fossil-fueled sources. The French are also participants in the European cap-and-trade regime. That combination of support for clean technologies and downward pressure on carbon is the same that the Obama White House sees as the critical path to green energy adoption in the US. Progress has been elusive in that regard and things do not look rosy in the Senate this fall.

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The Congressional Budget Office has estimated that the auction proceeds of the current Cap and Trade bill would increase Federal revenues by about $846 billion by 2019.

That would more than fund the $821 billion in renewable energy spending that it will take (per the CBO) to reduce the national carbon footprint by almost a billion tons a year on deadline, and would leave $25 billion in the bank for additional renewable energy projects.

This revenue would fund programs that reduce carbon emissions and that cut the cost to individuals and businesses. Some examples over the jump:

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One universal difficulty is the continuing cost gap between renewable and fossil fuels. Creating an incentive program that works within the prevailing market - even a heavily regulated one - without interfering with normal market operation is very difficult when the price points are so far apart. Internalizing some of the costs of burning fossil fuels would help close that gap, and that is what cap-and-trade is all about: promote and subsidize clean energy and put downward pressure (both economically and through command and control) on dirtier fuels.

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The study finds that hybrid sales have not replaced gas guzzling SUVS, but rather have replaced small, relatively fuel-efficient, conventional cars. Too bad considering SUVS, trucks and vans produce substantially greater carbon emissions.

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The Cap acts as a solid backstop behind all other climate policies. Over time, the limits are tighter until we’ve hit our targets and launched a clean-energy economy. Trade allows companies to swap pollution permits using an auction market for pollution “allowances.”

All kinds of legislation can move us toward our climate goals; energy efficiency standards for vehicles and appliances, smart-growth plans, building codes, tax credits for renewable energy, public investment in energy research and development, utility regulatory reforms.

But the cap in Cap and trade is the only guarantee that we get there. There is no substitute for the certainty of an emissions cap.

Trade hitches the flexible power of the marketplace—the mobilized ingenuity of millions of diverse, dispersed, innovative, self interested people—to our climate goals. The point of such a trading system is to put a price on pollution that will travel throughout the economy, motivating businesses and families to find ways to trim greenhouse gases.

By turning the permission to pollute into a commodity that is bought and sold, everyone up and down the economic ladder gets new opportunities to make and save money by switching to a low carbon economy.

So Cap and Trade combines guaranteed results (Cap) with flexible means (Trade).

There’s four simple steps to how it works:

1. Count total greenhouse-gas emissions for the nation as a whole.

We would simply track fossil fuels at the points where they enter the economy: the pipeline or oil tanker or coal field. (As a nation, we currently emit 6 billion tons of CO2 a year from fossil fuels.)

2. Set a cap.

The emissions in the pollution permits must add up to no more than each years total Cap. Decide how much overall carbon emission is permissible for the year and require a permit for each ton of carbon dioxide emitted by upstream wholesalers or suppliers of fossil fuels. The Congressional Budget Office has found that this would affect only  7,400 US companies. Individuals and most businesses are not affected.

3. Distribute permits.

Permits can be valid for a single year, or for a multi-year period. One method for distributing them is auctioning; another is to give them away free on the basis of past emissions (“grandfathering”), past energy sales, or some other criterion. Permit holders can buy and sell allowances among themselves through auctions that determine the price of the permit. That’s the “trade” part.

4. Step it down.

Each year, distribute fewer emissions permits, on a predictable, published schedule that takes us to our targets. The gradual nature of this transition maximizes choice and flexibility in a way that narrowly targeted climate policies cannot match.

Then the market, left to itself, should gradually create more renewable energy to replace the fossil energy.

While price signals travel downstream through the economy to other businesses and to consumers, low income consumers are protected from the price rise by free permits.

This allows businesses and families to step down, stair by stair, at a pace that is safe and manageable with time to adjust through fuel efficiency and increasing renewable power like solar and wind power.

Images from frogdoggy and Al Gore and The Bus Project

Much has been said in opposition to the cap and trade climate legislation that is currently on the Senate’s plate. Opponents have argued repeatedly that the legislation will do nothing but increase the cost of energy, which will force companies send jobs over seas, where labor is cheaper, in order to keep up with production demands. Senator Kit Bond (R-Missouri) even went as far as to call the Waxman-Markey Bill “a pig in a poke.”

A few days ago another Senator challenged the bill, and the U.S. Department of Agriculture (USDA). Senator Mike Johanns (R-Nebraska) said, ”USDA knows what cap and trade will do to energy prices…Let me repeat that: USDA says energy prices will increase, but they think the opportunities from climate legislation will likely outweigh the costs.”

So we’ve heard from opponents. But what about proponents? What does the USDA have to say for itself?

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So to liven-up the debate about carbon policy and make it a little more approachable for the kids, host Jon Stewart ‘Jizz-Ams in Front of Children on Cap’n Trade’:

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The Cap acts as a solid backstop behind all other climate policies. Over time, the limits are tighter until we’ve hit our targets and launched a clean-energy economy. Trade allows companies to swap pollution permits using an auction market for pollution “allowances.”

All kinds of legislation can move us toward our climate goals; energy efficiency standards for vehicles and appliances, smart-growth plans, building codes, tax credits for renewable energy, public investment in energy research and development, utility regulatory reforms.

But the cap in Cap and trade is the only guarantee that we get there. There is no substitute for the certainty of an emissions cap.

Trade hitches the flexible power of the marketplace—the mobilized ingenuity of millions of diverse, dispersed, innovative, self interested people—to our climate goals. The point of such a trading system is to put a price on pollution that will travel throughout the economy, motivating businesses and families to find ways to trim greenhouse gases.

By turning the permission to pollute into a commodity that is bought and sold, everyone up and down the economic ladder gets new opportunities to make and save money by switching to a low carbon economy.

So Cap and Trade combines guaranteed results (Cap) with flexible means (Trade).

There’s four simple steps to how it works:

1. Count total greenhouse-gas emissions for the nation as a whole.

We would simply track fossil fuels at the points where they enter the economy: the pipeline or oil tanker or coal field. (As a nation, we currently emit 6 billion tons of CO2 a year from fossil fuels.)

2. Set a cap.

The emissions in the pollution permits must add up to no more than each years total Cap. Decide how much overall carbon emission is permissible for the year and require a permit for each ton of carbon dioxide emitted by upstream wholesalers or suppliers of fossil fuels. The Congressional Budget Office has found that this would affect only  7,400 US companies. Individuals and most businesses are not affected.

3. Distribute permits.

Permits can be valid for a single year, or for a multi-year period. One method for distributing them is auctioning; another is to give them away free on the basis of past emissions (“grandfathering”), past energy sales, or some other criterion. Permit holders can buy and sell allowances among themselves through auctions that determine the price of the permit. That’s the “trade” part.

4. Step it down.

Each year, distribute fewer emissions permits, on a predictable, published schedule that takes us to our targets. The gradual nature of this transition maximizes choice and flexibility in a way that narrowly targeted climate policies cannot match.

Then the market, left to itself, should gradually create more renewable energy to replace the fossil energy.

While price signals travel downstream through the economy to other businesses and to consumers, low income consumers are protected from the price rise by free permits.

This allows businesses and families to step down, stair by stair, at a pace that is safe and manageable with time to adjust through fuel efficiency and increasing renewable power like solar and wind power.

Images from frogdoggy and Al Gore and The Bus Project

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O’Reilly borrows from Matt Taibbi’s piece at Rolling Stone, “Inside the Great American Bubble Machine”, that examines the politics of climate change and the investment houses that stand to gain with the move to carbon markets. But O’Reilly should have quit while he was ahead because Taibbi put together a decent case against Goldman Sachs. By pulling Republican whipping-boy Al Gore into his soapbox, O’Reilly softens the blow of Taibbi’s pointed critique — never mind that Al Gore’s has actually said his first choice for a policy mechanism to address climate change is a carbon tax. Watch it:

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Just when you thought no more ink could be spilled about the merits or political viability of a carbon tax versus a cap-and-trade, it has. With the House passage of the American Clean Energy and Security Act (ACES), also known as Waxman-Markey, a version of the bill is now being considered by the Senate. And while there are certainly things to both love and hate about Waxman-Markey, it may be the only hope we currently have for meaningful climate change legislation. But are there other options?

Now, I’m not saying in all cases a carbon tax is superior to a cap-and-trade, in fact, I may just write a “7 Reasons a Cap-and-Trade is Better than a Carbon Tax” post after this one. But in some instances, the straight tax does have its advantages.

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A few weeks ago Senator Roger Wicker (R-Miss.) called for a new energy solution. A solution that came in the form of 100 new nuclear power plants. That vision has not left the republicans’ eyes. And on Tuesday, Senator Mike Crapo (R-Idaho) added his two cents.

During a hearing of the Senate Environment and Public Works Committee, Crapo stated that “any successful plan to reduce carbon emissions must also involve nuclear power…Nuclear power is the best and quickest way to increase our clean energy options.” And mentioned that it should be included in any legislation, including the democrat-backed cap and trade legislation currently on the table.

Crapo said the Idahoans are skeptical of the cap and trade deal due to the possibility of increased energy costs. “A better option may be to ramp up the use of clean, nuclear technology, and existing energy sources so that we may transition to new sources without the damage to our economy we would see under a cap and trade scheme,” he added.

He urged the exploration and advancement on the United States’ nuclear energy infrastructure, calling nuclear power “the best solution on climate change.”

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Photo Credit: huntz via flickr under Creative Commons License

The Cap acts as a solid backstop behind all other climate policies. Over time, the limits are tighter until we’ve hit our targets and launched a clean-energy economy. Trade allows companies to swap pollution permits using an auction market for pollution “allowances.”

All kinds of legislation can move us toward our climate goals; energy efficiency standards for vehicles and appliances, smart-growth plans, building codes, tax credits for renewable energy, public investment in energy research and development, utility regulatory reforms.

But the cap in Cap and trade is the only guarantee that we get there. There is no substitute for the certainty of an emissions cap.

Trade hitches the flexible power of the marketplace—the mobilized ingenuity of millions of diverse, dispersed, innovative, self interested people—to our climate goals. The point of such a trading system is to put a price on pollution that will travel throughout the economy, motivating businesses and families to find ways to trim greenhouse gases.

By turning the permission to pollute into a commodity that is bought and sold, everyone up and down the economic ladder gets new opportunities to make and save money by switching to a low carbon economy.

So Cap and Trade combines guaranteed results (Cap) with flexible means (Trade).

There’s four simple steps to how it works:

1. Count total greenhouse-gas emissions for the nation as a whole.

We would simply track fossil fuels at the points where they enter the economy: the pipeline or oil tanker or coal field. (As a nation, we currently emit 6 billion tons of CO2 a year from fossil fuels.)

2. Set a cap.

The emissions in the pollution permits must add up to no more than each years total Cap. Decide how much overall carbon emission is permissible for the year and require a permit for each ton of carbon dioxide emitted by upstream wholesalers or suppliers of fossil fuels. The Congressional Budget Office has found that this would affect only  7,400 US companies. Individuals and most businesses are not affected.

3. Distribute permits.

Permits can be valid for a single year, or for a multi-year period. One method for distributing them is auctioning; another is to give them away free on the basis of past emissions (“grandfathering”), past energy sales, or some other criterion. Permit holders can buy and sell allowances among themselves through auctions that determine the price of the permit. That’s the “trade” part.

4. Step it down.

Each year, distribute fewer emissions permits, on a predictable, published schedule that takes us to our targets. The gradual nature of this transition maximizes choice and flexibility in a way that narrowly targeted climate policies cannot match.

Then the market, left to itself, should gradually create more renewable energy to replace the fossil energy.

While price signals travel downstream through the economy to other businesses and to consumers, low income consumers are protected from the price rise by free permits.

This allows businesses and families to step down, stair by stair, at a pace that is safe and manageable with time to adjust through fuel efficiency and increasing renewable power like solar and wind power.

Images from frogdoggy and Al Gore and The Bus Project