Tag Archives: Obama

Climate Change, the Clean Air Act and the Political Sandbox

13 Mar

Yesterday, climate change experts from throughout the world wrapped up three day conference on climate change in Copenhagen.  At the conference British economist Nicholas Stern (who authored a major British government report detailing the cost of climate change) told hose assembled that the global recession presents an opportunity to build a more energy-efficient economy.

“Coming out of this we have got to lay the foundations for a low-carbon growth, which is going to be like the railways, like the electricity, like the motorcars, this is going to be over the next two, three decades the big driver in investment,” Stern said.

What’s our tattered economy to do?  In this same week, the U.S. Environmental Protection Agency proposed the first comprehensive national system for reporting emissions of carbon dioxide and other greenhouse gases produced by major sources in the United States.  EPA is developing this rule under the authority of the Clean Air Act (CAA).  Draconian perhaps?  Yes indeed, as I will opine in a moment.  It is my humble view that decades of economics based incentives to reduce air emissions appear to be about to be thrown under the bus.  And while the focus of the attention is on more energy intensive sectors such as cement production, iron and steel production, and electricity generation, the net is being cast much wider and may inadvertently capture less polluting industries and small businesses, impacting a wider sector of the economy which may be unnecessarily burdened.

So what’s the problem?  Congress appears to be the problem. While a number of states and regional initiatives are preparing their patchwork of GHG cap and trade frameworks and legislation (some like in Oregon and Washington appearing to be in a death spiral), Congress is sitting on its hands and all too slowly is slogging away at bringing meaningful and balanced cap and trade legislation to the floors of Congress.  Further, President Obama’s appears to be burdening climate change legislation with extra baggage, and this is not making the situation any better. The 2010 budget plan calls for using a carbon cap-and-trade system to raise as much as $646 billion in new revenue for the government between 2012 and 2020.  Much of the funds would go to subsidize clean technology research.  All good it seems.  Until one digs into the details.  According to the budget plan, most of the money raised would go toward a refundable tax credit of up to $400 for working individuals and $800 for working families, subject to income limits.  While I am all for social reinvestment, this makes reaching consensus on climate change more politically charged.

The President may be entering dangerous waters by putting economic renewal too heavily on the back of cap and trade legislation and in mixing social agenda issues in as well.  In fact, it’s the Democrats that are now putting up such a big fuss.  As noted in the Wall Street Journal (blog) http://blogs.wsj.com/environmentalcapital/2009/03/12/cap-and-horse-trade-obamas-uphill-battle-for-climate-bill/, the so called “Blue Dog” Democrats worry that the Presidents blueprint for tackling climate change will unduly burden Rust Belt states by raising energy costs for consumers and manufacturers. Many Democrats are upset that the revenue will be used for generic tax cuts and to help fund other programs, rather than for specific help to cushion the blow of increased climate regulation.

Indeed, what I hear in the great Northwest among business leaders appears to echo those in the beltway, who are concerned about the impact of federal or state cap and trade legislation on local economies.  But consider the alternative…the EPA way.

Many argue that the U.S. Supreme Court’s 2007 decision, Massachusetts v. EPA (which affirmed that carbon dioxide emissions are a pollutant as defined by the CAA) is the leverage needed to allow for carbon emissions to be regulated by the EPA.  That is true, because the EPA was essentially forced by the Massachusetts v. EPA decision to proceed with developing greenhouse gas regulations under the Clean Air Act unless or until Congress acted.  Many argue that the EPA is in the best position to manage a federal cap and trade program and integrate seamlessly all of the many regional and state initiatives currently in process.  But one can only imagine the years of litigation that will result from imposing new, wide reaching rules.  Despite the relative success of the CAA over the past 30 years, it’s a relatively rigid framework, whereas market-based systems like Cap and Trade may be more successful in the long run at controlling costs and spurring innovation through incentives and regulatory flexibility. But now the President appears to have convoluted the political process by padding the legislation with social agenda items.

Scientists assembled at this week’s climate conference have restated clearly that the urgency of the current situation cannot be overemphasized.  Climate change appears to be accelerating at a rate beyond previous Intergovernmental Panel on Climate Change (IPCC) expectations, and that the window for a timely response is closing quickly. The dire direction in which our world appears to headed requires a dual pronged strategy that provides a policy pathway that will begin to reduce emissions immediately, and a political pathway that avoids continued gridlock, as is being witnessed in Washington this week.

Is everyone able to play in the same sandbox? Do it for our planets sake.

Yes We Can (Have a Green Economy)…Can We?

26 Feb

Two recent news items caught my eye, especially in light of the continuing meltdown of the economy and President Obama’s call to action at last night’s” not so” State of the Union address. First, according to a recent survey (http://www.rockwellautomation.com/news/get/ManufacturingSurvey.pdf), an overwhelming majority of Americans believe that safer, cleaner and more energy-efficient production are the most important manufacturing issues in today’s economy. Americans chose product and employee safety, and environmental issues as the most important attributes. Among the top answers chosen include:

· Provide safe, quality products (86%)

· Provide a safe workplace (84%)

· Use natural resources efficiently (80%)

· Produce minimal waste (71%)

· Keep current prices or reduce prices (59%)

Americans also believe U.S. manufacturers need to invest in automating and modernizing their factories to improve environmental sustainability, competitive position and product quality.

· Use energy, raw materials or natural resources more efficiently (92%)

· Continue to remain competitive and grow (89%)

· Minimize waste and other environmental impacts (86%)

· Provide safer, high quality products (85%)

· Respond more quickly to customer demands (85%)

· Provide a safer workplace (83%)

A striking statistic in the survey found that only 18 percent believe U.S. manufacturing technology is more advanced than other countries and only about a third (34%) noted the U.S. has become more competitive in the past ten years. This downward competitive trend tracks well with president Obama’s statements last night.  This is becoming apparent even in the growing “clean tech” sector, where China and other nations are producing far more at a substantially lower per unit price.  So is government stimulus the answer?  Many believe that government incentives to modernize manufacturing will help create highly-skilled, higher-paying jobs, while upgrading automation at U.S. factories for many years to come.

In contract, a study released on the eve of the recent Washington DC national conference on green jobs says that emerging eco-friendly work must provide adequate pay and benefits — or risk damaging efforts to restore the economy and strive for environmental sustainability.  The study, “High Road or Low Road? Job Quality in the New Green Economy,”  (http://www.goodjobsfirst.org/pdf/gjfgreenjobsrpt.pdf), was conducted by the nonprofit resource center Good Jobs First. Researchers looked at pay and labor conditions for existing jobs in eco-friendly business sectors, including the manufacturing of components for wind and solar energy projects, green construction and recycling.

Researchers found that low pay, often just slightly above minimum wage, was prevalent in many green job sectors.  There were many notable exceptions, those being where unique public-private partnerships or established labor agreements were forged.  The researchers went on to state that “ care needs to be taken in creating those positions….One of the greatest risks is that, in our haste to create a large quantity of new green jobs, we pay too little attention to their quality”..

“Environmental sustainability will be difficult or impossible to achieve if it does not go in hand with economic sustainability for workers and their families,” the researchers wrote. “The fact that an employer is engaged in a business that benefits the environment does not necessarily mean that the employees of that enterprise are going to be treated well.”

In my last entry on this site, I discussed the important of having not just a well-trained green workforce, but a credentialed one.  The Good Jobs First report discussed many ways in which job quality standards could be integrated while developing the infrastructure for the green workforce of the future. Some of the more novel ways that (at least to me) stood out included:  strengthening prevailing wage requirements, adopting best value contracting, adding labor criteria to LEED standards and using “clawbacks” to enforce job quality standards (in other word, requiring a company that fails to fulfill its project commitment to repay a subsidy, tax break or any other related financial assistance received).

So what will it take to get a trained and credentialed green workforce integrated into a strong manufacturing sector that will yield sustained upward productivity and growth?  Is it up to our state and federal governments?  Is organized labor the key?  Would public-private partnerships or apprenticeships be the answer?

What are your thoughts?