CCL Position on ACESA
Citizens Climate Lobby position on The American Clean Energy and Security Act
Citizens Climate Lobby, while aligned with most scientists and environmental organizations on the objective of reducing carbon dioxide emissions, does not endorse the cap and trade approach of the American Clean Energy and Security Act as the best means for achieving that objective. We feel this goal could best be achieved through the strategy we refer to as carbon tax and dividend.
Here are the reasons:
Science must drive policy
Until the dawn of the Industrial Revolution, the earth’s carbon dioxide content remained stable between 180 and 280 parts per million (ppm). The presence of CO2 and other greenhouse gasses in our atmosphere is actually a good thing. It enables the planet to retain heat at night and prevents intolerable swings in temperature. Too much, however, is a bad thing.
Beginning in the late 18th century, fossil fuels – with high carbon content – became the means of producing energy. This use accelerated rapidly in the 20th century with the rise of automotive transportation and electrical generation. Correspondingly, the level of CO2 in our atmosphere has risen steadily and now stands at 390 ppm. If carbon emissions remain unabated, CO2 levels will exceed 450 ppm by the year 2020. This is the level, scientists believe, that existed at a time when Earth was ice-free. (See “Guiding Principals for Climate Legislation,” http://citizensclimatelobby.org/node/338).
In addition to the man-made problem of CO2 emissions, scientists now warn that we are quickly reaching tipping points where “amplifying feedbacks” will accelerate the process of climate change and make it more difficult to reverse. For example, as ice cover in polar regions diminishes, sunlight that is normally reflected by that ice is instead absorbed by the Earth’s surface, hastening the warming process. A comprehensive study released by MIT in the spring of 2009 found that global warming is happening twice as quickly as previously thought.
Given what we know about the process and speed of climate change, it is imperative that we reduce CO2 emissions as much as possible, as soon as possible.
How ACESA falls short
ACESA provides the very laudable goal of reducing CO2 emissions by 83 percent by the year 2050. In the critical short-term, however, ACESA calls for a 17 percent reduction by 2020. Such a cap is unlikely to prevent us from surpassing the “red-zone” benchmark of 450 ppm. Doubts of achieving even this meager reduction have arisen because of the inclusion of questionable offsets, investments in projects that promise to reduce greenhouse gasses. These offsets can be purchased by polluters wishing to release more CO2 than their permits allow. Critics, however, point out that many of these projects would occur without offset investments, and such purchases would result in no additional CO2 reductions.
By contrast, a steadily rising tax on carbon would result in at least a 28 percent reduction in CO2 emissions by 2020, according to an analysis by the Carbon Tax Center. Offsets are not included in the carbon tax and dividend approach.
Another problem with ACESA is that initially only 15 percent of CO2 permits will be auctioned off. The remainder will be given away to polluters, drastically reducing revenue the government could refund to consumers needing relief from higher energy costs.
With carbon tax and dividend, nearly all of the revenue from the carbon tax would be returned to consumers through payroll or income tax reductions.
With ACESA, concern arises also with the carbon market created when CO2 permits are bought and sold. As energy demands rise and fall – depending on the severity of weather – an additional level of volatility is introduced into the pricing of energy. Making clean energy competitive with fossil fuels depends, in large part, on knowing what the price of energy will be. With no way to reliably predict the price of energy, companies will find it difficult to weigh the cost benefits of making the transition to cleaner energy.
With a steadily-increasing tax on carbon – and no price volatility from carbon financial markets – businesses can make informed decisions on future energy plans that might include alternative sources and conservation technologies.
Our choice: Carbon tax and dividend
While we applaud the time and effort congressional leaders have devoted to addressing climate change, our conclusion on ACESA is that it doesn’t go far enough fast enough. And, like a Rube Goldberg machine with an infinite number of moving parts, its complexity could be its undoing. If one part fails to function properly, the end result is jeopardized. The choice we recommend is far simpler and more effective: Increase the price of carbon with a steadily-increasing tax and return the revenue to the people to help pay for higher energy costs that would ensue. This is the most direct path leading us to a world where clean energy is competitive with fossil fuels. It’s a path that leads to new jobs, less dependence on foreign oil and – above all – a sustainable climate.