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Changing Mood on Carbon Caps

Prepared by: Andrew Hansen
March 21, 2007

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The scientific squabbles on climate change have yielded increasingly to consensus. “The scientific community has shifted from skepticism to near-unanimous acceptance of the evidence of an artificial greenhouse effect,” argues Gregg Easterbrook of the Brookings Institution. The February 2007 report from the Intergovernmental Panel on Climate Change declared with 90 percent certainty that human activity was responsible for global warming. “The science on this question has been settled,” says Rep. John Dingell (D-MI), a global warming skeptic-turned-convert who chairs the House Energy and Commerce Committee.

Washington’s attention, of course, carries the most significance, and many believe the change in attitude of an auto industry stalwart like Dingell signals changes in the U.S. approach to global warming. Tapping into the new zeitgeist (NYT) this week is former Vice President and recent Oscar winner Al Gore, who addressed both houses of Congress. The different bills before lawmakers call for a national cap-and-trade system for carbon emissions, whereby companies can then buy or sell their pollution allowance, a system similar to one created under the 1990 amendments to the Clean Air Act, explained in this Backgrounder.

Rep. Dingell showed teeth when auto-industry leaders appeared before a House subcommittee in the first of a series of high-profile appearances by business leaders. He warned them that “inaction will not work, and telling us what doesn’t work is useful but no longer sufficient.” Leaders from the Big Three and Toyota, as well as the United Auto Workers union, stressed that increased gas mileage standards—CAFE standards —would wreak havoc on the economic health of the industry. But the group did pledge to work with Congress to find solutions.

Automakers aren’t the only industry engaging with Congress on climate change, as the private sector becomes increasingly active, hoping to have a hand in the creation of a new, carbon-regulated business environment and avoid “a patchwork of state and local emission controls.” Some groups have already begun, participating in the Chicago Climate Exchange (SunTimes), a voluntary but binding cap-and-trade program.

On March 19, sixty-five companies under the banner of the Coalition for Environmentally Responsible Economies (Ceres) called for “leadership by the U.S. government to achieve sizable, sensible long-term reductions (NYT) of greenhouse gas emissions”. Where leadership in the 1970s and 1980s on U.S. environmental legislation used to come from the executive, initiative now springs largely from the collusion between the private sector and advocacy groups. Businesses want “clear, consistent regulation legislation,” (Spiegel) while environmental groups are eschewing zero-tolerance policies in favor of more politically acceptable cap-and-trade, market-based systems. James Rogers of Duke Energy said at a recent CFR energy symposium that “virtually every company there believes we'll live in a carbon-constrained world in the future, and we have to find a way to provide reliable service in the context of these carbon constraints.”

States are also sending a strong message to Washington. California recently became the first state to limit carbon emissions, with twenty-eight states following suit. California joined forces with four western states to set targets (Seattle Post Intelligencer) for greenhouse reduction and possibly create a regional cap-and-trade system, with similar cooperation (Morning Sentinel) in the Northeast. An estimated 409 cities have taken some climate change-related action, with municipalities in Vermont voting to pressure (NYT) Congress on climate change.

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