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Thursday, February 11, 2010

Sidelining Cap and Trade’s Green Critics

Sidelining Cap and Trade’s Green Critics

by Neil deMause

The sweeping bill to reduce greenhouse-gas emissions that moved through Congress over the last year received relatively scant media attention, taking a distant back seat to the healthcare reform bill and its attendant public uproar. And, much like the healthcare debate (Extra!, 10/09), coverage of climate-change legislation ended up obscuring the issues as much as it explained them, viewing a Democratic compromise bill through the lens of right-wing and corporate criticism, while marginalizing progressive critics who said the legislation was insufficient to the task at hand.

The tone of coverage was set in February, when President Barack Obama issued preliminary plans for a system to set an overall cap on the amount of carbon that can be emitted in the U.S. each year, and require electricity providers, oil companies and the like to buy permits to cover their emissions of greenhouse gases, either from the government or from each other in an open trading market.

This "cap-and-trade" plan emerged out of a years-long debate over the merits of a market-based trading scheme versus a more straightforward tax on carbon emissions. Obama and Democrats in Congress settled on cap and trade-a structure used by the Environmental Protection Agency to help reduce acid rain in the 1990s-largely because it was considered to be more politically palatable than a tax; its supporters have included John McCain and major corporations such as Shell Oil and Dow Chemical.

Some economists and environmentalists, though, have insisted that cap and trade is deeply flawed. Laurie Williams and Allan Zabel, two EPA attorneys in California (where Zabel has helped to oversee that state's cap-and-trade system), predicted in a Washington Post op-ed (10/31/09) that a cap-and-trade system would lead to the "creation of powerful lobbies seeking to protect newly created profits in permits," which would help "lock in climate degradation for a decade or more." They also warned that allowing producers to use "offsets" in place of reducing their own emissions was an invitation to abuse:

If the landowner wasn't planning to cut his forest, he just received a bonus for doing what he would have done anyway. Even if he was planning to cut his forest and doesn't, demand for wood isn't reduced. A different forest will be cut. Either way, there is no net reduction in production of greenhouse gases. The result of this carbon "offset" is not a decrease but an increase-coal burning above the cap at the power plant.

Instead, some climate experts have endorsed what they're calling "carbon fees," essentially a tax on emissions that would be rebated back to households to help defray increased energy costs. NASA climate-change expert James Hansen (Huffington Post, 7/9/09) notes that a carbon "fee-and-dividend" system that refunded U.S. residents on a per-capita basis would ensure that "those with below-average carbon footprints come out ahead....By the time the fee reached the equivalent of $1/gallon of gasoline ($115/ton of CO2), the rebate in the United States would be $2,000-3,000 per adult or $6,000-9,000 for a family with two children."

This debate, however, was largely missing from media coverage, which stuck to presenting the dispute in simplistic blue-vs.-red terms. In the New York Times' news analysis (2/28/09) of the Obama plan, environment reporter John M. Broder wrote that "business lobbies and many Republicans raised loud objections" to Obama's proposal, while "green groups and supportive members of Congress applauded." When the House passed the Waxman-Markey bill, its version of cap and trade, NBC's Nightly News (6/27/09) counterposed the benefits of reducing climate change against the economic costs of higher fuel prices: "President Obama says it's a bold and necessary step to fight global warming and encourage a new era of green energy. Critics, however, say the new cap and trade system to limit greenhouse gases will lead to higher energy costs." Time.com (4/18/09) likewise reported that "the main criticism of cap and trade is that it may result in a rise in energy prices as carbon becomes more expensive."

This, though, is only the "main" criticism of cap and trade as far as the right is concerned; for most environmental scientists and economists, increasing the cost of carbon-based energy in order to reduce emissions is the whole point of either cap and trade or a carbon tax. The main concern for many progressive critics is that Congress' cap-and-trade plan would be, in the words of a joint statement released by Greenpeace, Friends of the Earth, Public Citizen and other groups (5/22/09), "not only inadequate [but] counterproductive."

Greenpeace noted (5/15/09) that the bill's goal of reducing carbon emissions to 4 percent below 1990 levels by 2020 wouldn't be nearly enough to avoid the 2ºC temperature rise that most scientists say is the maximum the planet can sustain without dire effects on climate. And, like Williams and Zabel, it warned that the bill's use of "offsets" makes it too easy for polluters to game the system.

Yet the coalition's action drew little media notice aside from brief mentions in the Times (5/22/09) and the Washington Post (5/22/09, 5/26/09). Some of the few mentions cited the groups' stance as misguided, such as a Paul Krugman column (New York Times, 5/18/09) and an editorial that appeared in the Pittsburgh Post-Gazette and Toledo Blade (5/19/09). Time's website (5/22/09) noted the environmentalists' opposition, but the print magazine (6/1/09) pointed to Greenpeace USA director Phil Radford's saying that Obama was "missing in action" on climate change as an example of "environmentalists complain[ing] the White House has done too little behind the scenes to defend" the House bill. In a notable exception, the Madison Capital Times (5/27/09) published a lengthy editorial laying out the coalition's arguments.

And when Hansen and other carbon-tax advocates protested in November outside the offices of the Natural Resources Defense Council-which has taken the lead among more centrist environmental groups in backing Waxman-Markey-the most prominent outlets to cover it were Indymedia (12/1/09) and the Huffington Post (11/30/09). In contrast, when an American Petroleum Institute report complained that cap and trade would hurt the oil refining business, the news was featured in the Wall Street Journal (8/24/09), Houston Chronicle (8/25/09), Philadelphia Inquirer (8/27/09) and Reuters (8/24/09).

The carbon-fee alternative entered the media discussion mostly through a handful of centrist or right-leaning columnists and op-ed writers-such as Tom Friedman (New York Times, 4/8/09), Eleanor Clift (Newsweek.com, 12/11/09) and Greg Mankiw (New York Times, 8/9/09)-while news coverage typically dismissed alternatives to cap and trade as lacking congressional support. When Rep. John Larson (D-Conn.) introduced a bill to tax carbon emissions and use the proceeds to reduce payroll taxes, which disproportionately fall on low- and middle-income families, Broder (New York Times, 3/7/09) called it a "lonely quest" that was "probably going nowhere" because "few are willing to openly advocate billions of dollars in new taxes at a time of economic distress, even though a cap-and-trade program also means higher energy prices."

The "economic distress" line was a common one in knocking down a carbon tax. Yet reporters' obsession with energy costs apparently didn't extend to their coverage of Waxman-Markey. When the legislation passed the House in June, changes were made so that in place of auctioning off the credits to carbon producers-as initially suggested by Obama and backed by most environmental groups-the legislation would hand out 85 percent of the carbon credits for free, auctioning the rest. While there's widespread debate over how much of this would result in windfall profits for companies (WashingtonMonthly.com, 5/14/08), it undeniably reduces the amount of money generated that can be rebated to families to compensate them for higher energy costs. Waxman-Markey would provide rebates to the lowest-income households, but nothing for the lower-middle class. As a result, Center for Budget and Policy Priorities chief economist Chad Stone testified before Congress (10/21/09), the Congressional Budget Office estimated that the bottom fifth of U.S. households would come out ahead under Waxman-Markey-but the middle three-fifths would see their expenses rise.

The Boston Globe (4/1/09) noted that auctioning versus allocation was "one of the most politically charged aspects of regulating greenhouse gases," but failed to explain why. A generally informative Washington Post FAQ on Waxman-Markey (7/6/09) noted that giving away credits for free would "reduce costs for certain companies," but answered its own question "Who loses in these compromises?" with: "The federal government"-though it did note in an aside that "Obama had proposed a combination of energy aid for lower-income households and an extension of a temporary tax cut approved this year."

The Washington Post (10/25/09), in its coverage of the Senate companion bill to Waxman-Markey, reported that the failure to auction permits "angered some environmentalists," though it couched it as because this would "favor wealthier Americans who owned stock in companies affected by a national carbon cap." The notion that auctioning credits could be used to help compensate households for higher energy bills was nearly impossible to find in media coverage.

Perhaps most striking, coverage entirely avoided any talk about the problem that necessitated these bills: the threat of increasing global climate change, and the immense human and economic costs that would come with it. For example, a report by the Economics of Climate Adaptation Working Group, a research group sponsored largely by the reinsurance firm Swiss Re, estimated that the costs of unchecked global warming-including everything from increased severe weather disasters to the need to adapt farmland management to shifts in climate-would amount to 19 percent of global GDP by 2030. That's significantly worse than the earlier projections of British economist Nicholas Stern that climate change would reduce GDP by 20 percent by 2100-and yet, like Stern's predictions (Extra!, 7-8/07), the new report received virtually no U.S. media notice.

By contrast, in October, CBO director Douglas Elmendorf testified before Congress that Waxman-Markey would reduce GDP in 2020 by one-quarter to three-quarters of a percentage point-an annual rate of well under 0.1 percent. Elmendorf noted that his figures "do not include any benefits from averting climate change."

The headline that the Washington Post (10/15/09) gave to their story on Elmendorf's testimony: "Cap and Trade Would Slow Economy, CBO Chief Says." As in most cases of media coverage of climate legislation, readers would be advised to ask: Compared to what?

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