Congressman Jim McDermott (D-WA) has introduced legislation that would put a price on CO2 emissions. Known as the Managed Carbon Price (MCP) Act, the bill is structured more as a cap-and-dividend program than cap-and-trade, and is intended to reduce emissions while also directing revenue towards deficit reduction and reimbursing consumers for costs. The bill would have a target of 80 percent CO2 reductions by 2050.
“My bill would reduce carbon emissions, and it returns all the money to consumers and deficit reduction. Businesses want this kind of predictability, consumers need to be protected, and we need to step up and address our climate and fiscal issues,” McDermott said in a press release.
Although carbon pricing legislation has been largely out of federal political discourse since 2010, it has seen a recent revival from both sides of the aisle. Former Congressman Bob Inglis (R-SC) recently announced the “Energy and Enterprise Initiative,” an effort which will, among other things, push conservatives to adopt a carbon tax. However, a Senate hearing last week demonstrated that the debate over the science of global warming is far from settled in the minds of some GOP legislators.
What policy goals would a cap-and-dividend program accomplish? Would this bill accomplish those goals as well as another might? What secondary impacts would you expect this bill to have? What accounts for the recent resurgence in focus on climate legislation?
The cap and dividend program could have some positive impact but to think this congress or the Department of Energy is going to take any leadership in making this happen is simply a fictional pursuit. Until we get a real, sequential, and logical national sustainable energy PLAN that transitions us from finite to infinite energy resources (“Winning the Energy Wars, A Sustainable Energy Plan for America’s Future”) these knee jerk “solutions” simply put more band aids on an out of control energy future that spells a complete rewrite of our quality of life in the U.S.
This is not going to happen. In the absence of technological breakthroughs, the immediate effect of these measures would be to increase unemployment and reduce income and wealth. These results are opposite to what the great majority of the electorate is seeking.
Moreover cap and trade has been a failure wherever it has been tried.
In my personal view (not representing NSF), the bill makes a lot of sense, even though it is far from a cure-all.
Given the very tough political realities, I would have advised limiting it to the electric power sector for now. The EPA/EIA analysis of the Waxman bill showed that it would have done relatively little to reduce GHG emissions from transportation. Manufacturing emissions are a distant number three source, and in 2009 they engendered all kinds of problematic politics, involving not just manufacturers but also labor unions, offsets, international trade and a host of messes it would be best to just avoid for now — if we agree that something is better than nothing.
I do hope that this measure would provide enough incentive that we really do start to see some deployment of technologies, like Calera’s and others, to clean up the CO2 AND conventional pollutants from the flue gas of old coal plants. When and if it reaches viability and wide deployment, we will be in a better position to discuss enlarging the system, perhaps even by negotiating something like a common international carbon price.
It’s too bad the bill does not incentivize ways that agriculture could help. (I’ve seen recent estimates that US livestock sequestered more carbon by their droppings than the manufacturing sector emitted. But different practices lead to different outcomes.) Yet again, something is better than nothing, and simplicity seems to be paramount here.
The words about an 80% quota do not appear in the bill (which is good, in my view), but a few of the key decisions require a bit more specification than “the secretary will decide” and “if deficits are not a problem.’ What are the criteria to be used?
Best of luck…