Monday, December 28, 2009

Feeback Loops of Climate Policy Failures

They say that success breeds success. Does failure similarly breed failure? Congress's failure to enact domestic climate change legislation was arguably one of the factors that made it highly unlikely that the parties at Copenhagen would commit to a successor to the Kyoto Protocol. Now, it appears, the perceived "failure" of Copenhagen may imperil the ability of Congress to enact domestic climate legislation before the mid-term elections in November 2010.

According to a report at Politico.com, a half-dozen Democrats in the Senate, including Evan Bayh of Indiana, Mary Landreiu of Louisiana, and Dick Durban of Illinois are now asking the White House to jettison the cap-and-trade measures in the energy bill. They give various reasons, most of which relate to the economic recession and the fact that 2010 is an election year. However, it seems likely that they wouldn't support climate legislation in any year, regardless of economic circumstances. One factor, above all, would seem to be highly relevant to their opposition:  Illinois, Indiana, and Louisiana are three of the top ten states in total greenhouse gas emissions, according to a Congressional Research Service report, which means that any regulatory system is likely to carry significant economic impacts for those states.

Senator Bayh has been on the record stating that he would not support legislation that would disproportionately impact heavy coal-using states, such as Indiana. Frankly, there is no climate legislation that would not disproportionately affect heavy coal-using states because coal is the most carbon intensive of fuel sources. The whole point of climate legislation is to raise the price of using carbon-intensive fuels, like coal and oil, to better reflect their social costs, and to stimulate market processes to ultimately replace those fuels  with less carbon-intensive substitutes.

Bayh can claim that he is taking a principled position to protect electricity users in Indiana, who currently benefit from relatively low rates because coal is an inexpensive fuel source, which is mined in Southern Indiana. What he won't acknowledge is the difference between the price of coal and its social cost. He also will not admit that his opposition to climate legislation benefits not only electricity users, but coal mining and other coal-dependent industries in the state that are among his many contributors.

Similarly, Mary Landrieu has consistently voted to support the oil industry in her state (see here). The oil & gas industry was one of her top-four contributors, by industry, between 2005 and 2010. Entergy Corp gave her more money during that period than any other single contributor. Her opposition to climate legislation is bought and paid for.

Finally, it is worth nothing that Bayh, along with other Democratic hold-outs from states that emit a lot of greenhouse gases, sent a similar message to the White House near the end of the Bush Administration, in opposition to the Warner-Lieberman climate bill. So, really, nothing much has changed in the domestic politics of climate change.

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