Grist: Annie Leonard misses the mark in her new video, “The Story of Cap-and-Trade”

The Story of Cap & Trade from Story of Stuff Project on Vimeo.

I posted this video the other day about Cap and Trade, and said that it oversimplified the issues.

Here is a more complete explanation of what's wrong with this video from Grist:

The greenosphere is all abuzz about a new video from Annie Leonard, creator of semi-famous anti-consumerism video/book The Story of Stuff. It’s being billed as a definitive debunking of cap-and-trade, but it’s more like a perfect representation of all the confusion and misplaced focus that plagues the green left right now.

Now, I suppose I’m generally viewed among greens as a defender of cap-and-trade—or, in the less charitable version, a defender of the “party line,” a shill for the administration, a sell-out “insider,” whatever. A “pro” in the “pro vs. anti cap-and-trade” argument. But that’s not how I see it. It’s more that I think it’s the wrong argument. Activists like Leonard are just mis-identifying the barriers to effective climate action. I’ll have lots more to say on that subject soon, but for now, let’s focus on the video.

The Story of Cap & Trade

The video contains four basic arguments against cap-and-trade:

1. Allowance giveaways are bad. This is true. It would be better to auction 100% of the pollution allowances and use the revenue to invest in clean energy and protect consumers. The bill in Congress gives away too many allowances (Leonard elides the fact that the bulk of them are devoted to consumer protection, though it’s open to debate whether they’ll be used that way, and some Senators are pushing for more giveaways).

The most obvious solution to this is to give away fewer allowances. Yet Leonard and crew imply that allowance giveaways are inherent to cap-and-trade and the only solution is to ditch it. They imply that other “real” solutions would somehow be immune to polluters seeking loopholes and special favors, but never explain why.

The allowance giveaways in the climate bill reflect the power of the fossil fuel lobby. Switching policies would not diminish that power. Reduce that power and any climate policy gets better. The policy isn’t the problem; the power of the fossil fuel lobby is.

2. Offsets are bad. Leonard’s “argument” against offsets, if it can be called that, is fairly typical for this genre. She highlights a few ridiculous-sounding projects from the Clean Development Mechanism (CDM), implicitly conflates those projects and the CDM with offsets generally, and then concludes, based on the anecdotes, that offsets are bad and they make cap-and-trade toothless.

The reality is far more complex. The quality of offset projects varies widely, as do enforcement mechanisms. The bill in Congress actually contains some fairly stringent measures for policing offsets. Many people close to international policy negotiations believe that high-quality offsets are a vital measure enabling a stronger international treaty. (See Glenn Hurowitz.) Many think that emissions reductions will prove cheap enough that offsets won’t be extensively utilized in early years. Others think that moving emission reductions overseas short-sells the clean energy revolution needed here in the U.S.

These are complex topics, and they’re not well-served by the simplistic, hand-waving dismissal of offsets in Leonard’s video. Regardless, if you think offsets are a problem, the obvious solution is to reduce the number of offsets. But again, Leonard and crew pretend that offsets are inherent to cap-and-trade and the only solution is to ditch it. Again, they pretend that “real” solutions would be immune to similar loopholes and giveaways.

One more time, from the top: The number of offsets in the climate bill reflects the power of the fossil fuel lobby (and the common impression that reducing emissions will be costly). Switching policies would not diminish that power (or that impression). The policy isn’t the problem; the power of the fossil fuel lobby is.

3. Carbon markets are bad. I hesitate to call this an “argument” in the video, since it mainly consists of using the words “Enron,” “bubble,”“Wall Street,” and “scam” suggestively, without saying anything at all specific about why this commodity market—which would be one of any number of commodity markets, most of which work perfectly well, including the carbon market in Europe—would be uniquely evil. I’m with Kevin Drum: there’s no meat here. I’ve never seen anything to this argument but the kind of suggestive handwaving that’s in the video. I don’t know why the green left has decided that markets are bad, in and of themselves, but it seems both politically unwise and substantively thin.

It’s certainly true that certain financial instruments should be eliminated or regulated more heavily; this is true for financial markets in general. There’s some fairly strong language in the bill about regulating carbon markets; that language will likely be folded into the larger financial market reforms that the Senate will address soon. But no one, outside this narrow topic, is suggesting that markets should be abolished!

Remember, trading of allowances is the feature of cap-and-trade that makes it more flexible than a flat tax that applies to all entities equally. This was always the argument for C&T over a tax. Instead of rebutting that argument, Leonard et al. seem instead to have decided that “market Goldman Sachs derivatives bugga bugga!” suffices.

4. Cap-and-trade is a “distraction” from “real solutions.” Of all the arguments, this is, forgive my bluntness, the silliest. The idea is that cap-and-trade has (for reasons never explained) magically come to dominate the policy conversation and made people forget about other options. “Cap-and-trade makes citizens think everything will be OK if we just drive a little less, change our light bulbs, and let These Guys do the rest.” Whaaat? It does? Any empirical evidence for this? Polls? Surveys? Anything? Honestly, it’s a depressing hallmark of liberalism to view progress—or the impression of progress—as a deflating force. Over on the other side of the aisle, they’re constantly declaring victory. Why do we think they do that? Does it seem to be de-motivating the conservative base?

First of all, there are reasons cap-and-trade has garnered the most support, but C&T bashers are so busy attacking a caricature they can’t see them. Second of all, what is the sociopsychological theory here supposed to be? If we just stopped talking about cap-and-trade, everyone would wake, as though from mysterious trance, and start talking about “real” solutions? The only reason the world hasn’t come together around tough measures that would financially damage fossil fuel companies is that the world’s citizens are, like kittens, distracted by the shiny cap-and-trade bauble?

This is the worst feature of the C&T bashers (and carbon tax advocates): their utter political naivete and Romanticism. There’s no plausible story about power here, and no real effort to tell one. It’s just: “Once everyone hears our clever arguments, the world will unite around Real Solutions!” It’s irresponsible.

The video concludes by saying, “the next time somebody tells you cap-and-trade is the best we’re going to get, don’t believe them.” But why not? Literally nothing in the video even addresses that point! It’s a fundamentally political point that the video just wishes away. At this point the green left desperately needs less Mead and more Machiavelli. Unless greens get serious about identifying the loci of political and financial power, identifying ways to block or leverage that power, and building power of their own, they’re going to lose. Policy arguments are more-or-less orthogonal to that important undertaking, not a substitute for it.

———

There are also some straight-up errors in the video. Europe’s trading system is working, despite relentless hype to the contrary. Any program that caps and reduces CO2 would help those hurt by climate change, even if the money was distributed inequitably. The Clean Air Act does not enable EPA to “cap” carbon the same way cap-and-trade does, and would not serve as an equally effective substitute for a cap. Etc etc.

But my larger critique is that the video, and the bashing of cap-and-trade generally, just misses the point. I’ve got longer posts on this coming up, but here’s a capsule summary: it’s clear that politics as currently constituted, particularly in the U.S., will not tolerate a high price on carbon. So we’re going to end up with a fairly low price, hopefully with mechanisms to automatically raise it over time. A different carbon pricing mechanism won’t solve that problem.

The smart response would be to secure the low-and-rising carbon price and then start pushing other emission reduction policies, namely sector-specific regulations, industrial policies focused on capacity building, and large-scale investments in RD&D. If all the C&T bashers would turn their energy in that direction, we’d be having a much more productive conversation. Instead they’re echoing arguments from Exxon and Don Blankenship, vaguely hoping that if cap-and-trade is politically destroyed, a herd of ponies will thunder in to replace it. Once and for all: there are no ponies.

The Story of Cap & Trade - Think It's Not a Financial Racket, Think Again

The Story of Cap & Trade from Story of Stuff Project on Vimeo.

While she's right about the problems, compromising to get the caps in place is the only solution that is negotiable, and will help the developing world with trading REDD credits.

The Daily Show: Carbon Copout

The Daily Show takes on the many shortcomings of the Democrats with the bill, including the generous giveaways to polluting industries and the Dems' awful messaging. Of course, he leaves some time to make fun of the GOP too, and well, just see for yourself. It's hilarious.

Grist: ‘No compromise’ faction attacks climate bill

Grist:

Global warming activists endorsed by the preeminent climatologist James Hansen are working to defeat the climate and energy bill in Congress, and they’re using some provocative stunts to spread their message.

Briefly:

* Activists handed out fake $2 trillion bills at a rally for climate legislation in New York last week, criticizing the size of the global-warming emissions market they oppose. ($2 trillion is their estimate for the size of the emissions market they oppose.) The bills depict Al Gore holding a wrench and a compact-fluorescent light bulb and the words “Corporate Giveaways! Carbon Ponzi Schemes! FALSE SOLUTIONS!”
* Others hung a 14-foot banner of the same bill from the Manhattan headquarters of the Natural Resources Defense Council (NRDC).
* “Cap’n Trade,” an actor in a pirate costume, unfurled a similar banner at a presentation by Connie Hedegaard, chairperson of the Dec. 2009 UN Climate Summit and Denmark’s minister for climate and energy.
* Still others blocked a motorcade of UN delegates to drop a banner with the message “Cap + Trade is a Dead End.”

At least three groups worked together on last week’s events—Climate SOS, Rising Tide North America, and “Greenwash Guerrillas,” which pied Thomas Friedman last year. They all hold a “no compromise” philosophy on climate-change action, opposing carbon markets that allow polluters to buy and sell pollution credits and arguing that larger environmental groups such as NRDC have compromised too much in working with businesses and Democratic lawmakers.

“It’s an awkward position to be environmentalists working on climate change but opposing a climate bill,” said Climate SOS organizer Rachel Smolker, a Vermont ecologist and author. “Especially with a new administration that we want to support. But we felt we need to take a really strong position because this [bill] is so inadequate.”

The campaign is awkward for “establishment” green groups too. They’ve been preparing to battle fossil-fuel interests over the energy bill introduced in the Senate this week. Now they must figure out if and how to respond to this attack from the far left.

“It’s troubling,” said Daniel J. Weiss, director for climate strategy at the Center for American Progress, a center-left think tank with close ties to the Obama administration. “No one believes that the clean energy bill that will come out of Congress will address the threat of global warming in a single step. But we have to start.”

“The real enemies are Big Oil and Big Coal and the right wing attack machine,” he said. “For them to mock [Gore] in the way they did shows that they don’t understand you need to attack your enemies and not your allies.”

Hansen’s involvement is especially troublesome. The director of NASA’s Goddard Institute for Space Studies wasn’t involved in the New York stunts, but he endorsed Climate SOS’s recent tour against a climate bill. The $2 trillion bill includes his statement that a cap-and-trade program “would be worse for the environment than doing nothing.”

The opposition by Hansen and Climate SOS is unlikely to influence Washington policymakers, in Weiss’s opinion, but it’s got the potential to make everyday Americans think the situation is hopeless.

“If they hear from such a respected scientist as James Hansen that what Congress is doing won’t matter, then why would they bother to call their senators to say ‘Act on this’?” he said.

Aside from the stunts last week, other moves by the “no-compromise” camp are downright perplexing. Last week Greenwash Guerrillas launched a website in response to Cleanenergyworks.us, a three-month-old diverse coalition supporting a comprehensive energy bill. The similar-sounding Cleanenergyworks.biz was a replica of the real Clean Energy Works site, with two notable changes: The phone number and email address for spokesperson Josh Dorner had been changed. His name was left the same. The site changed to a more innocuous version over the weekend and is currently down.

Dorner had no interest in speaking about the site that took his name. “I don’t send too much of my day worrying about a website,” he said Thursday. “There are considerably more important tasks before us to get this bill across the Senate floor.”

NRDC spokesperson Michael Oko shared Dorner’s reluctance to give attention to the stunts. “There are a lot of different groups out there,” he said in regard to the banner hung at NRDC’s office. “Everybody has the right to express themselves.”

About the replica website Oko said, “Frankly, I was a little confused about what their intention was.”

Smolker of Climate SOS said the idea was “to provide a spoof, to reveal the emptiness of the claims Clean Energy Works provides. For them, it’s green jobs and clean energy and everything’s a smiley-face, you know? Our goal is to tell people to look deeper and take the smiley faces off.”

She said she contributed ideas for the mock site, but individuals from Greenwash Guerrillas, who did not want to be identified, created the idea.

The 51-year-old Smolker has seen firsthand how environmental groups can evolve, professionalize, and grow in wealth and influence. Her father was one of the founders of Environmental Defense Fund (EDF), another group targeted by Climate SOS last week. EDF met in her childhood home when it was still a “ragtag group,” as Climate SOS is now, she said. (Smolker, who works for Biofuel Watch, declined to give funding information for Climate SOS but said all members were volunteers.)

“We’ve played that compromise game for a long time,” she said. “There’s too much at stake right now.”
The old saw

The compromise question—whether to sacrifice what is ecologically necessary for what seems politically possible—has been around as long as the green movement itself. The naturalist-and-mystic John Muir and the politician-and-forester Gifford Pinchot clashed over the same tensions in the early 20th century.

As for Hansen’s “worse than nothing” remark, there has been plenty written about the failings of the House climate and energy bill—it gives away too much to dirty-energy backers, it even protects coal-plant pollution from further regulation. But there is historical precedent of legislation that is deeply flawed at first evolving into something effective and durable. The original Clean Air Act did not address the acid rain crisis, an omission not corrected until 1990. The original Social Security Act did not include domestic or agricultural workers, effectively excluding many Hispanic, black, and immigrant workers, as Democratic strategist Paul Begala notes.

“If that version of Social Security were introduced today, progressives like me would call it cramped, parsimonious, mean-spirited and even racist,” writes Begala. “Perhaps it was all those things. But it was also a start. And for 74 years we have built on that start.”

Most progressives, including many major green groups, would gladly embrace an imperfect climate bill as a start.

“Those who see the House clean energy bill as somehow tainted by deals, and therefore want a carbon tax, have to understand that no tax proposal would ever emerge from Congress as we know it without similar or worse deals being made,” said Weiss. “Unfortunately the moral high ground of ‘we must act for our children’ is necessary but not sufficient for our political process.”

Smolker said Climate SOS would continue on a different tack, insisting on an acceptable bill from the get-go. She expected the group would pause to take stock of the bill released in the Senate this week, then regroup.



Here’s Cap’n Trade delivering his message to Danish climate and energy minister Connie Hedegaard:

Daily Show: Greener Postures

Ha. So true.

Economist: Seeing REDD in the Amazon

Economist:

Saving rainforests needs both property rights and payments

FORESTS lock up a lot of carbon. Cutting them down accounts for around 20% of the world’s emissions of greenhouse gases. On paper, halting deforestation should be the simplest way to cut emissions. Achieving a similar reduction by building wind turbines or nuclear-power stations, or by mandating more fuel-efficient cars and buildings, would take years and cost billions. In practice, however, halting deforestation is hard: much of the world’s rainforest has already succumbed to loggers and farmers. That is because it is difficult to align the interests of people who live in forests (now 20m in the Brazilian Amazon) with those of the rest of humanity.

The best way of doing so involves a mixture of two ideas: establishing clear property rights over land and paying its owners not to cut down trees. If these policies are to work anywhere, it will be in Brazil, which possesses 60% of the world’s greatest tropical forest. Brazil has powerful motives for preserving the Amazon. Deforestation does terrible damage to the reputation of a country that is a pioneer in renewable energy. It also puts at risk the Amazon rain factory that enables Brazil to be one of the world’s biggest agricultural exporters.

Brazil now has a sophisticated system for monitoring deforestation from satellites and aeroplanes. It has set aside some 40% of the Amazon as national parks or Indian reserves. It has laws that restrict deforestation in the rest. The problem is enforcing those laws over a vast area where many of the inhabitants dislike the rules (see article). The first step is a proper land registry to confirm who owns what. Some 15-25% of the Amazon is private property, which is supposed to be kept 80% forested (though often is not). Most of the rest is nominally federal land, but in practice is up for grabs: title deeds are forged, people are killed and deforestation accelerates because of competing claims. Some farmers even clear trees as a way to solidify land claims: fines from Brazil’s environmental agency can create a paper trail that acts as proof of ownership.

A law approved this month by Brazil’s Congress aspires to end this mess—but at a price. It would grant title to all landholdings up to 1,500 hectares (3,700 acres) occupied before 2005 in the Amazon, comprising an area the size of France, and ban further land claims. The law entrenches injustice: it risks rewarding people who used violence to obtain land, including large landholders who occupy almost 90% of the area under discussion. Brazilian greens want to limit the measure to smaller plots, and to ban their resale for ten years.

Yet that risks defeating the object. Better for the government to complement this attempt to end battles over privately owned land with a decision to take the rest of the Amazon into public ownership, as parks or reserves. Countries with rainforests also need to have due regard for their preservation and for the Indians who live in them when allowing mining and oil exploration. The lack of such procedures was behind a bloody clash in Peru this month (see article).

Lay down that axe and you will get cash

At the moment it makes economic sense to cut down trees: those who do so can sell the timber and turn the land into farms or ranches. So the second idea for saving forests lies in changing economic incentives by paying people not to chop down trees—an idea known in the ghastly jargon of climate-change diplomacy as “reduction of emissions from deforestation and degradation” (REDD). Since many rich countries felled their forests as they developed it seems fair that they should pay some of the cost of this.

There are difficulties, though. One is that “avoided deforestation” is hard to define and quantify. Another, raised by officials in Europe who have chosen not to include REDD in the European carbon-trading scheme, is that the carbon market would be flooded with deforestation credits that will push down the price. Companies would then buy cheap credits and continue doing business as usual rather than cutting their own emissions. Further tricky issues abound: who should have the right to sell credits? How should the money be split between central governments, local governments and indigenous people? And should the money be paid in perpetuity?

REDD schemes will require careful monitoring to ensure that forests really are left intact and that carbon credits for an area are not claimed more than once. Murky goings-on in Papua New Guinea, one of the leading advocates of REDD, highlight such worries (see article).

Even so, it is worth trying, simply because avoiding deforestation is so effective in slowing carbon emissions. So REDD deserves a place in the world climate treaty to be negotiated in Copenhagen in December, to replace the Kyoto treaty when it expires in 2012. As with other forms of carbon credit, today’s voluntary and experimental REDD schemes will need to be replaced by more rigorously accredited and monitored schemes. But they have a chance of working only if the countries in which they operate define forest land rights clearly. Brazil’s flawed attempt to do this is a step forward.

Cap and Trade Explained in Under Four Minutes

WP: Opinion - The Cost of Climate Inaction

By Kristen Sheeran and Mindy Lubber in the Washington Post:

Robert J. Samuelson's April 27 op-ed, "Selling the Green Economy," was way off the mark on the economics of tackling climate change. It was a call to bury our collective heads in the sand simply because the future involves uncertainty -- exactly the opposite of what we need to do.

Samuelson argued that the cost of moving to a clean-energy economy is higher than advocates expect and that transition can't happen nearly fast enough to meet the ambitious goals proposed in the climate and energy bill sponsored by Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.).

But this assumes that all costs involved in mitigating climate change -- and there will be costs -- represent new costs, without acknowledging the massive error in our market system that equates the price of carbon emissions to zero. This fundamental error skews everything that follows, because if emitting carbon costs nothing on a balance sheet, all steps to reduce pollution count as "new costs."

The real cost of carbon emissions is far from zero. Each new scientific report brings proof of a changing climate that promises to disrupt agricultural patterns, set off a scramble for dwindling resources, raise sea levels, propel population shifts and require massive emergency spending as we try to react to the growing crises. These are the costs of inaction.

A smart climate policy can create a mechanism to put the right price on carbon, and rapid economic change will follow that firm price signal, along with reduced climate risks. Our work with more than 100 economists nationwide and at RealClimateEconomics.org demonstrates the weight of economic analysis supporting this point.

The failure to put a real price on carbon emissions also undermines Samuelson's second point, that we cannot switch to clean energy technologies quickly. Many claim that these technologies will not work, at least in a cost-effective way, because we would already be using them if they did.

But we are not using them enough now because we have set the price of carbon pollution at zero and have devoted most of our financial incentives to fossil fuel production to gas up our vehicles, heat our homes and power our factories. Acknowledging the climate crisis and pricing its risks correctly, instead of passing them on to our children, would produce an amazingly quick shift to new technologies and behaviors. We change habits when it makes economic sense to do so. Price matters.

Ultimately, households and businesses care more about their total energy bill than costs per gallon or per kilowatt hour. Gas at $4 per gallon is cheaper in a car that gets 40 miles per gallon than $3-a-gallon gas in a clunker that gets 20 mpg. American entrepreneurial and research genius can move us to far greater energy efficiency quickly, using mostly existing technologies, when a carbon price rewards the effort.

The economic impacts on households, then, may not be as dramatic as some warn. We can mobilize the political will for clean technologies and emissions reduction when, as economic research demonstrates, there is a visible payoff in jobs and strides in international competitiveness from these technologies.

And none of this is in conflict with the business community. Quite the contrary. Consider Business for Innovative Climate and Energy Policy (BICEP), a coalition of nationally and globally known companies including Nike, Starbucks, Sun Microsystems, Timberland and Levi Strauss that the investor coalition Ceres coordinates. The heads of these companies believe that passing strong climate and energy legislation this year is in the interests of both the planet and their businesses.

Some BICEP businesses already see climate change affecting their supply chains, manufacturing and international markets. Those are costs. These companies see strong climate and energy policy as pro-business because increased energy efficiency saves them money and clear price signals on carbon help them plan competitive strategies on a more level playing field.

The cost of inaction is high and could be catastrophic. But, contrary to claims, the cost of switching to cleaner energy and dramatically lower emissions will spur competitive gains, cost far less and come much more quickly once we have set our goals, adjusted our incentives and corrected the market's false signals.

History shows that big changes often come in a rush, unforeseen by the critics of the day. We believe that honest accounting for the reality of climate change will bring a convergence of effort and interests, triggering change on a scale that will, once again, alter the course of history.

Kristen Sheeran is executive director of the Economics for Equity and the Environment Network, a nationwide group of economists focused on environmental policy. Mindy Lubber is president of Ceres, a national coalition of investors, environmentalists and public interest groups working with companies to address sustainability challenges.

Ed Markey response to John Boehner

Here is Ed Markey, co-author with Henry Waxman of the renewable energy draft bill which will go before Congress at the Green Apple Festival in DC explaining why the EPA's finding that greenhouse gases were harmful to humans is "the most important decision in the history of environmental decisions."

Props

Boehner: It's 'comical' to say carbon dioxide is dangerous

I hate to be partisan, but Jesus H. Christ............republicans..........

The video speaks for itself. Transcript below.

STEPHANOPOULOS: Let me ask you then about energy. We showed your statement on the president's decision through the EPA to regulate greenhouse gases. Also, you've come out against the president's proposal to cap-and-trade carbon emissions.

So what is the Republican answer to climate change? Is it a problem? Do you have a plan to address it?

BOEHNER: George, we believe that our -- all of the above energy strategy from last year continues to be the right approach on energy. That we ought to make sure that we have new sources of energy, green energy, but we need nuclear energy, we need other types of alternatives, and, yes, we need American-made oil and gas.

STEPHANOPOULOS: But that doesn't do anything when it comes to emissions, sir.

BOEHNER: When it comes to the issue of climate change, George, it's pretty clear that if we don't work with other industrialized nations around the world, what's going to happen is that we're going to ship millions of American jobs overseas. We have to deal with this in a responsible way.

STEPHANOPOULOS: So what is the responsible way? That's my question. What is the Republican plan to deal with carbon emissions, which every major scientific organization has said is contributing to climate change?

BOEHNER: George, the idea that carbon dioxide is a carcinogen that is harmful to our environment is almost comical. Every time we exhale, we exhale carbon dioxide. Every cow in the world, you know, when they do what they do, you've got more carbon dioxide. And so I think it's clear...

STEPHANOPOULOS: So you don't believe that greenhouse gases are a problem in creating climate change?

BOEHNER: ... we've had climate change over the last 100 years -- listen, it's clear we've had change in our climate. The question is how much does man have to do with it, and what is the proper way to deal with this? We can't do it alone as one nation. If we got India, China and other industrialized countries not working with us, all we're going to do is ship millions of American jobs overseas.

Environmental Defense: Cap. Trade. Grow.