From Hindsight Minnesota 2020: Climate Change: The First Step

I have added Hindsight from Minnesota 2020 to my list of Minnesota blogs I am recommending. The following excerpts from a recent article will show you why. The analysis is quite good.

In nearly all avenues of life, the first step is often the hardest, but also the most important. The health care debate was an excellent example. A comprehensive climate change policy will likely face the same uphill battle. While difficult, this challenge is certainty worth confronting.

Democrats in Congress are trying to pass The American Power Act (APA) in a highly combative and contentious modern day D.C., where potential political gains tend to overshadow good policy. Despite preconceived notions about economic expenses related to a comprehensive energy policy, what better time than now would there be to convince the American public that something needs to be done about climate change, and specifically our dependence on oil. The Gulf Oil Spill is already the worst in American history, proving oil exploration is not as safe as advertised. So the question has to be: “How can we protect our environment while maintaining our standard of living and growing industry and commerce?”

Unfortunately in trying to give something to everyone, the APA has given everyone something to dislike. Conservatives are unhappy with any climate action that can be called cap and trade and the environmentalists are unhappy with anything that doesn’t completely eradicate fossil fuels.

What is a country to do?

Cap and trade has a bad reputation in the U.S. because of its rocky start in the European Union, where an inefficient distribution of cap credits led to huge profits for energy companies without the promised carbon reductions. After a hard-learned lesson, European carbon trading policy is now on pace to make its countries the first to meet Kyoto protocol commitments (MIT Energy Institute). Writers of the APA have tried to distance the bill from the cap and trade name, but that’s what it is, and the E.U. is proof that a cap and trade system can be successful on a large scale.

Cap and trade programs receive bad press because of the notion that they somehow limit profits and create too much of a burden on consumers. However, according to the EPA analysis of the APA, consumers can expect their energy bills to increase from 0.0-0.1% by 2015 and 0.0-0.2% by 2020 or an average of $76-146 a year per household. Additionally, APA protects business from a potentially volatile new trading market by creating a price ceiling to ensure sustained high prices do not destroy the market (EPA Analysis). Also, the costs associated with this study do not take into account the costs of no climate change action, which would make $76-$146 a year seem like a blue light special. Some media outlets have reported that economists agree that action on climate change, and especially this bill, would result in massive cuts to GDP. This simply is not true. In fact, the consensus among economists that action on climate change is important to the continued prosperity of the U.S. and the world is just as broad as among scientists.

Environmental groups are also attacking this bill, including The Sierra Club, Audubon Society, and The League of Conservation Voters. Their stance is that the bill is simple green washing to provide tax-payer funding to energy corporations; again, this is simply not true. Yes the bill provides incentives for energy companies to move to create nuclear power plants and to convert existing fossil fuel plants into carbon capture and storage facilities, but it also provides stimulus for renewable energy production and research.

Environmental advocates say the Senate version of the bill dulls the teeth passed in the House bill, giving the EPA greater authority in cutting pollution. I agree; ideally the House version of APA should be preserved. Unfortunately, idealism and realism do not often align.

In the meantime, states must do their part in adopting sustainable energy policy. As part of the Corn Belt, Minnesota has an advantage over other states because biomass fuels are a readily available asset. With successful research institutions, such as the University of Minnesota, advances in biomass technology are happening every day. Additionally, individuals around Minnesota are contributing their own innovations. Norm Erickson of Lake City Minnesota is advocating moving to hazelnut production to create bio-fuel. Per pound, hazelnuts can produce far more bio-fuel than commodity grains. Minnesota is full of innovators and innovations and it’s about time our state took notice and stepped up to become a leader in the green economy. Climate change is a major controversy of this generation and like social movements of past generations it will take public outcry for change to move Washington to act.

Hope this is helpful to my readers in understanding the debate over this bill. I also encourage you to read the other excellent articles on Hindsight from Minnesota 2020.