By SolveClimate’s David Sassoon.
America’s future climate law began working its way through Congress this
week, rewritten with new details and changes that were negotiated to
give the coal industry generous incentives and the regulatory certainty
to compete for a place in the nation’s energy future.
Here’s how Rep. Rick Boucher of Virginia, a lead negotiator for coal
state Democrats on the House Energy and Commerce Committee,
described the deal they worked out:
I’ve been working extensively to fashion a controlled program that
Congress can adopt which will preserve coal jobs, create the
opportunity for increasing coal production and keep electricity rates
in regions like Southwest Virginia affordable. The compromise that I
have reached with Chairman Waxman achieves those goals.
Boucher and fellow coal state Democrats cut those deals with the bill’s
authors, Reps. Henry Waxman and Ed Markey, with President Obama – a
“clean coal” supporter – giving them a free hand to arrive at the
formula that would secure the votes needed for passage.
Although the president called for a polluter-pays 100% auction of carbon
allowances when he asked Congress for a climate law, the now 932-page
American Clean Energy and Security Act of
2009
does the precise opposite: It contains a formula that gives most of the
allowances to polluters for free – with about a third of them going to
the coal-dominated power industry at no cost.
The free allocations were one major reason that
Greenpeace withdrew support for the bill within
hours of its introduction, but most of those in the climate community
who have weighed in so far have been willing to swallow compromises that
would have been unthinkable in January. Al Gore’s support for the bill
remains undiminished. Paul Krugman at The New York Times summed up the prevailing attitude best:
The legislation now on the table isn’t the bill we’d ideally want, but
it’s the bill we can get — and it’s vastly better than no bill at all.
As climate actors start wading further into the details of the bill’s
provisions, however, they may find themselves hard pressed to justify
passive acquiescence while enduring the certain further weakening of the
bill on the Senate floor.
Ground zero of the contention centers around coal, an embattled industry
which emerged from the negotiations with a surprisingly good deal. The
bill contains performance standards for new coal plants that are weaker
than those in the original Waxman-Markey discussion draft, funnels
billions in funds and incentives to the development of “clean coal,” and
strips EPA of authority to proceed with
development of regulations for smokestack CO2
produced by the industry.
Further, although the bill imposes a gradual economy-wide emissions cap,
the penalty for non-compliance or failure to achieve target reductions
would amount to no more than a slap on the wrist, given the low price
permits are expected to fetch on the market for some time.
Mainstream environmental groups, however, are focused on what they would
get in exchange — the holy grail of their climate campaign — the
establishment of an economy-wide cap-and-trade system whose efficacy
they believe can be increased over time. The bill also legislates
valuable and groundbreaking support for clean energy, energy efficiency
and green jobs, using federal law to erect economic pillars vital for
eventually transitioning to a clean energy economy.
They seem satisfied even though the new bill also reduced the proposed
national standard on renewable energy from 25% to 20%, compared to the
first draft, diminishing its potential competitive pressure on coal.
All sides are now wading through the details of the massive bill,
spinning messages and planning strategies for the political battle that
is likely to continue for the duration of the year. It is unlikely that
the parameters of coal’s good deal will substantially change during this
week’s committee mark-up, but in the coming months, the future of coal
will be a major topic of concern.
The continued growth and survival of coal brings three strikes against
the bill in every climate campaigners handbook: It’s the source of the
lion’s share of global CO2 emissions, it
creates a weak negotiating position when across the table from China,
and it fails to show the kind of leadership the world will want to see
from the U.S. in Copenhagen.
Weakened Standards and Large Bonuses
The discussion draft of the Waxman-Markey bill contained performance
standards for new coal plants that had some real bite. For starters, the
draft stipulated that after January 1, 2015, no coal plants that emitted
more than 1,100 pounds of CO2 per
megawatt-hour would be permitted for construction. That’s a natural gas
standard of performance, something that no coal plant can currently do,
so it looked as if after 2015, no coal plants could be built unless they
could capture and store their emissions. But the current bill has
relaxed the standard in both definition and start date (see page 91).
Utilities may build coal plants permitted between now and 2020, as long
as by 2025, these plants “achieve an emission limit that is a 50 percent
reduction in emissions of the carbon dioxide produced by the unit.” The
language stipulating specific rate of emissions per megawatt-hour has
been removed.
At the heart of the standard is the assumption that carbon capture and
sequestration technology will be available for commercial deployment so
that industry can comply. The bill is silent on what happens if
CCS technology is not ready or proves
unworkable.
It is possible that these new coal plants would be permitted to continue
operations through a relaxation of the legal standard, since
EPA even now cannot enforce a technology
standard that cannot be met. Companies in the UK are already negotiating for an opt-out clause there if
CCS is not ready in time.
Responding pre-emptively to
plans of a