Toward a New Energy Economy: Part 2 Tough Questions, Tough Answers


To lead America into a post-carbon economy, President Obama and the 111th Congress will have to revolutionize the biggest and most heavily lobbied of the government’s programs. That means taking on the armies of the status quo, who have money and inertia on their side.

It’s a battle that must be fought and won. Today, our public policy is riddled with crisis-inducing, self-defeating contradictions. The next Congress will have to resolve some tough questions that past Congresses avoided. For example:

1. What action will Congress take to prove to the world that the United States is serious about addressing climate action?

This isn’t only an issue of perception. Unless the U.S. goes to Copenhagen at the end of 2009 with a strong domestic program to cut greenhouse gas emissions, it will have little influence at the international negotiating table.

Half-hearted legislation won’t do. Barack Obama’s election has fueled hopes in the European Union and the developing world that the United States – the nation most responsible for the emissions in the atmosphere today -- will lead the global climate effort.

The approach endorsed by Obama and by members of Congress is a “market-based” cap and auction program. Congress would put a cap on U.S. emissions. The federal government would auction “emission allowances” to polluters, who would be allowed to buy and sell the allowances to one another.

But the latest scuttlebutt in Washington is that Congress probably will not pass a cap-and-auction bill next year. The reasons: There is no agreement on the architecture of a program; a carbon cap will increase the price of fossil fuels and politicians won’t vote for that in the middle of a recession; and lawmakers are concerned that if they approve a carbon-trading system before the rest of the world does, the U.S. program won’t fit and will have to be legislated all over again.

But some observers predict that if the United States doesn’t approve cap-and-auction before, there’s little prospect that other nations will agree on one in Copenhagen. Thomas Becker, Denmark’s chief climate negotiator, warns that no action by the U.S. Congress could derail international progress and result in years of more inaction.

So, if not cap-and-auction, then what will Congress do? Continued...