Seizing the Opportunity for Climate and Energy Legislation

President Obama met today with a bipartisan group of Senators on climate and energy legislation.  As NRDC President Frances Beinecke writes here, high-level engagement by the White House and an expanded set of Senators from both parties is the key to passing a climate and energy bill in the Senate this year.  The President reached across the aisle in his State of the Union address, asking for “a comprehensive energy and climate bill with incentives that will finally make clean energy the profitable kind of energy in America.”  He signaled his support for the kind of package that the tri-partisan trio of Senators John Kerry (D-MA), Lindsey Graham (R-SC), and Joe Lieberman (I-CT) are putting together, addressing offshore oil production, nuclear power, and carbon capture and storage together with carbon limits, energy efficiency, and renewable power.  In recent weeks the pace of Senate discussions has quickened, and today’s meeting shows more progress towards comprehensive legislation.

Some argue that the Senate should drop efforts to address climate change and settle for only a handful of energy provisions.  But the President and many of the Senators at today’s meeting have been clear that we cannot succeed with a piecemeal effort.  A bundle of energy policies alone cannot accomplish the three-fold task of curbing pollution, creating jobs, cutting our dependence on foreign oil.  As Senator Graham elegantly put it, a “half-assed” energy bill will not get the job done and will not get his vote.  In fact, as NRDC shows here, a piecemeal bill that deals solely with energy could make global warming pollution worse, would fall short on jobs and national security, and would cost taxpayers more than an integrated bill.

An integrated bill will create far more clean energy jobs than a piecemeal “energy only” bill.   A study led by economists at the University of California at Berkeley estimates that a comprehensive bill would result in 1.9 million net new jobs in 2020.  Even the Senate “energy only” bill (S. 1462) will create at most 500,000 new jobs over the next decade, according to its sponsors.

Likewise, an integrated bill will reduce U.S. oil imports far more than a piecemeal energy bill.  A comprehensive bill would reduce U.S. oil demand by increasing efficiency.  It could also vastly increase U.S. production from existing wells. That’s because carbon dioxide captured from coal plants could be used to pump oil out of existing wells through a process known as “enhanced oil recovery,” making available 35 to 55 billion barrels of domestic oil.  Between demand reductions and enhanced oil recovery, a comprehensive bill could cut U.S. oil imports in half.  An “energy only” bill would do little to reduce U.S. oil imports beyond opening new areas of the Outer Continental Shelf (OCS) to oil drilling, with all the attendant environmental problems.

An integrated bill is a better deal for taxpayers.  An integrated bill can provide funds to pay for cleaner energy programs through carbon allowances, whether they are distributed for free or auctioned. For example, the Congressional Budget Office (CBO) estimates that the comprehensive bill adopted by the Environment and Public Works Committee (S. 1733) would reduce the deficit by about $21 billion between 2010 and 2019.  In contrast, CBO estimates that the “energy only” bill (S. 1462) would increase the deficit by about $13.5 billion between 2010 and 2019.

And above all, an integrated bill will reduce global warming pollution, while a piecemeal “energy only” bill could make carbon emissions worse.  The House-passed American Clean Energy and Security Act (H.R. 2454) would reduce emissions of heat-trapping pollution by 2 billion metric tons from 2005 levels by 2020, as would the bill reported by the Senate Environment and Public Works Committee (S. 1733).  A 2 billion ton cut in U.S. emissions would be at the lower end of what scientists say is needed by 2020 to put the world on a pathway to prevent the worst effects of global warming – that is, to avoid a 2 degrees Celsius increase in temperature as nations pledged in the Copenhagen Accord.  At best, the Senate “energy only” bill could achieve only about one-tenth of that cut – 260 million tones.  At worst, a number of provisions in that bill could actually increase carbon pollution, swamping any good done by the bill’s efficiency initiatives.

In particular, the “energy only” bill’s electricity transmission provisions could increase global warming pollution, because without a carbon cap there would be more new coal plants, and fewer wind farms, built to tie into the new transmission wires.  Likewise, the bill would weaken the environmental performance required of transportation fuels purchased by the federal government.  The U.S. Air Force has goals to procure about 400 million gallons of synthetic jet fuel by 2016.  If oil from tar sands or other dirty fuels are used instead of conventional fuels to meet the Air Force goal, carbon emissions could increase by 5-10 million tons.

Senator Richard Lugar (R-IN), a key midwestern voice and one of the participants in today’s White House meeting, offered his own energy proposal today, focusing on building energy efficiency, cleaner electricity, and higher fuel economy.  These measures have merit but will fall short of the cuts in carbon pollution and oil imports we need unless they are integrated into a bill that requires steady cuts in carbon pollution.

So as the White House and these key Senators continue their work, the best solution is to marry strong limits on global warming pollution with the good provisions in energy legislation.  Congress should pass clean energy and climate legislation that caps carbon and includes the smart complementary policies to cut pollution while creating clean energy jobs and improving our security.