A day after Sens. John McCain (R-Ariz.) and Joe Lieberman (D-Conn.) failed in their attempt to add climate change regulations to the energy bill, two analysts look at what went wrong. Why did the cap-and-trade plan receive less votes than in 2003? Did nuclear incentives doom the amendment? Will the White House ever support a mandatory climate bill? David Doniger, climate center policy director with the Natural Resources Defense Council and Troy Bredenkamp, director of congressional relations at the American Farm Bureau Federation, discuss what's next for global warming policy.
Brian Stempeck: Welcome to OnPoint. I'm Brian Stempeck. Joining me right now is Troy Bredenkamp, director of the Congressional Relations at the American Farm Bureau Federation. Also with us is David Doniger, policy director of the Climate Center at the Natural Resources Defense Council. Gentlemen thanks for being here.
David Doniger: Sure.
Troy Bredenkamp: Thanks for having us.
Brian Stempeck: Just before we taped this show the Senate finished a major vote on the McCain-Lieberman climate bill, an amendment to the energy bill, and by all accounts it did very poorly. Five votes less than it got in 2003. David, what's the explanation for this? Why do you think it lost support?
David Doniger: Well, I think this support is really about the same, because the four votes, four of the five vote difference, are senators who have, who support caps on global warming pollution. They support the original McCain-Lieberman bill and they were unhappy with the nuclear subsidy provisions added into the bill. So, if you're really trying to measure what's the support for the caps in the McCain-Lieberman bill, it's almost exactly the same as it was in 2003. Now what's happening right now, as we speak, is the Senate is considering a resolution, Senators Bingaman, Domenici, Byrd, Specter, a whole long list of cosponsors, which will put the Senate on record for the first time that it is time to move to mandatory limits, mandatory market based limits on global warming pollution. To do it in a way that doesn't hurt the economy and that encourages other countries to participate in a comparable way. That is a milestone. That is a watershed.
Brian Stempeck: But getting back to the McCain-Lieberman climate amendment, your group, NRDC, was one of the environmental groups that came out and said we oppose the nuclear subsidies in this bill and were basically saying that you wouldn't support the overall McCain-Lieberman bill because of that. But isn't that kind of, didn't you help contribute then to the defeat of this bill?
David Doniger: Well, I think that our position is clear, that we support the caps in the McCain-Lieberman bill. We support the structure of it. We support the bulk of the incentives that they put forward. We don't think it's a constructive part of the solution to global warming to build new nuclear power plants in a heavily subsidized way. These are not the kinds of technologies that are going to really reduce emissions. They actually take away from the resources that could go to new forms of use of coal as well as energy efficiency and renewable energy and transportation, rebuilding our auto fleet, auto plants to build hybrids. These are the things that would really make a positive difference and the nuclear is a diversion.
Brian Stempeck: But Senator McCain has said, he's basically said, earlier this week, that this is a problem with the environmental community not be able to compromise on these issues. And a lot of people would say that if you're really talking about being serious about global warming, as a lot of European countries are, you have to go nuclear. It's really not an option not to.
David Doniger: Well, nuclear power plants supply 20 percent of our electricity. The existing power plants are not what's at issue. The issue is whether to bring a new group of three or four power plants, nuclear plants, built with heavy subsidies that can't be built and can't be economic without those subsidies. The question is whether the assistance that's available for new technologies should go to that or should it go to the new kinds of coal technology, gasification, carbon sequestration and to renewables and efficiency. Things whose cost curves really are coming down and which are sufficient, not only to meet the targets of the McCain bill, but to make as much as a 50 percent reduction in carbon emissions over the next several decades without an increase in nuclear power.
Brian Stempeck: Troy, your group, the Farm Bureau, is another group that did not support the McCain-Lieberman bill.
Troy Bredenkamp: Right.
Brian Stempeck: Give us a sense briefly why not and, I guess, what could be added to that bill that would let you support it?
Troy Bredenkamp: Well first of all, I would agree with David's assessment. I think that the support for mandatory caps is about where it was two years ago. I think the reason why the vote that just took place was less than it was two years was because of the nuclear being added to the particular bill. And I think it's quite frankly a little bit indicative of a probably where the United States is right now, as a whole, we're somewhat split. A lot of people have told us the science is in, it is decided, but quite frankly, it's not decided. There's a lot of question marks left out there to be answered. Our main opposition, Farm Bureau's main opposition to McCain-Lieberman is that it is a mandatory cap on carbon. Our primary concern is that it will have a very negative and detrimental impact to the natural gas market. When you look and see the energy alternatives out there to meet a hard cap on carbon, conventional wisdom would tell you that people are probably going to turn to natural gas even more than they are today.
Brian Stempeck: Right.
Troy Bredenkamp: And when we look at a very finite supply, particularly here domestically, and our inability to get more supply online here, we certainly don't want to do something at this point that would even upset that particular system where it's at right now.
Brian Stempeck: I want to ask something about what you just said. When you said that you feel the science isn't in, but one of the things that struck me is watching this debate for the past few hours, is that a lot of senators on the floor seemed to be saying the science actually is in. It seems like this resolution, that Dave was talking about, might have a pretty good chance. And you have a lot of people, a lot of industry groups coming out before in the utilities saying, you know, for the first time, they are starting to acknowledge that climate change is real. It's time to deal with this issue. Didn't you sense that there was kind of a change in that or would you disagree with that?
Troy Bredenkamp: Well certainly, no, no and I would say that David should feel pretty good about it, because, quite frankly, there is a climate title in the energy bill for the first time. So I mean they are definitely taking steps. Look, I think everyone would agree that emissions probably aren't the best thing for the environment. Whether you believe that they're having this cataclysmic effect on climate or on global warming, that is definitely still a debatable issue, but let's just, for instance, realize that it's a good thing to reduce our overall emissions. And I think that's what we heard probably more than anything. There was a lot of agreement that, you know what, emitting's not a good thing. Let's do it we can to lower that.
David Doniger: I think that's really quite, that's really on point, because the science debate, there was no science debate, other than a back action by Senator Inhofe almost entirely alone. Domenici, DeWine, a whole series of members saying they're not convinced that this is a problem. This is real, it's caused by human emissions, it's having affects and the issue, as Domenici put it this afternoon is not whether the science is, not whether we should do something, we should, he is a cosponsor of this mandatory resolution. It all comes down, for him, to how the allowances should be distributed, which he felt was too complicated and too charged to deal with in the two or three days they had allocated for this.
Brian Stempeck: That's what Domenici had said publicly. You're talking about the national commission plan --
David Doniger: And he said this on the floor this afternoon.
Brian Stempeck: Right, but do you think that's accurate? I mean he also met with the White House recently and there's some speculation that maybe the Bush administration came out and said, we don't want you supporting the climate bill. We don't want this in the energy bill. Do you think Domenici is being honest here, and do you think he's going to move forward?
David Doniger: I'm sure that the White House leaned on him and leaned on others, but what's interesting is how independent of that many of the Republicans and certainly Democrats have been, again, on the issue of the science. You don't hear from the senators this quarreling with the scientists, this assertion of uncertainty, this editing from Phil Cooney. You don't hear any sympathy for that line from the White House. They are about to cross the line and say it's time for a mandatory program, but we still need to work out the details. That's way ahead of where the White House is and that's a big change in the debate.
Brian Stempeck: Troy, do you think --
Troy Bredenkamp: Well I would say, I mean, the White House has actually made some pretty huge strides over the last four years.
Brian Stempeck: How so?
Troy Bredenkamp: Well, they have implemented a 1605B program, which is actually establishing a system to do some registry on emissions data.
Brian Stempeck: Tracking emissions, right.
Troy Bredenkamp: They're putting into place the president's climate vision program. You know, I think the issue here is not necessarily whether emissions are a good thing or a bad thing, but how do we come about solving this issue? Do we put in mandatory command-and-control mechanisms or do we let voluntary mechanisms play a role? Do we let the marketplace define how we're going to go about change?
Brian Stempeck: I think a lot of people would ask though, especially someone coming from the Farm Bureau, is why doesn't the agriculture sector and the farmers in general support this? It seems like in a cap-and-trade scheme you'd have a lot of farmers that could theoretically win out by storing CO2 in their soil, in trees, in their crops, things like that, some of the no tail practices they do.
David Doniger: Locating windmills on your farms.
Brian Stempeck: Sure. And wouldn't farmers win out by making money under a cap-and-trade scheme and wouldn't we be able to get into some wins?
Troy Bredenkamp: It depends on what you define as winning out, because if you were to put in a cap-and-trade system, you would be, in our minds, driving up demand for natural gas. So we're going to be paying more for natural gas related items that go into the planning process, which is nitrogen based fertilizer, ag chemicals to dry our grains, to pump our water.
Brian Stempeck: Right.
Troy Bredenkamp: All those things. We do rely quite heavily on natural gas. So then you would be thinking, OK, 100 percent of agriculture would be, in essence, paying higher prices for all those inputs. 30 to 40 percent of agriculture and I don't know where those estimates may even be, David, but some portion of agriculture would be able to recoup some of those added expenses through since sequestration with the making of the carbon market, if you will. For us, that trade off's not even relevant at this point. When you have $7 gas, $7 natural gas --
Brian Stempeck: Right.
Troy Bredenkamp: And you have $500-a-ton fertilizer, those kinds of things far outweigh the hope of having a market where I might be able to make $5-$10 per ton by sequestering carbon.
Brian Stempeck: So from that loss for the farmers, that's their reason.
David Doniger: I think that both the McCain initiative, the Bingaman initiative and certainly NRDC's position, we recognize this need to hold down any increase in demand for natural gas and the way to do that is, first of all, with a lot of efficiency and conservation measures. And we have a lot of support from the industrial gas users for those, including the kinds of things that increase the efficiency of natural gas use in homes, because everything you don't use there is more available for farmers and for industry. And in the power sector that's where this initiative for new coal plants that gasify coal and sequester the carbon safely underground, that's where the potential is both to keep using the coal resource that we have and secondly, to not run up the demand for natural gas. And the bills have incentives to do that, unfortunately the whole issue of the incentives got overshadowed by, in our view, the misdirected incentive for the new nuclear plants. But also in the McCain-Lieberman bill and the Bingaman proposal is substantial support for those new coal technologies.
Brian Stempeck: David, what do you see is the overall path for, now that McCain-Lieberman has lost, we're moving onto the sense of the Senate? Bingaman had pulled his amendment. He's not going to offer it. Where do you see the Senate going from here?
David Doniger: I'm a big believer in fusion. I mean I think when you've got, who knows how many this will be who vote for the sense of the Senate, but when you have a majority, and it may be a large majority, that have crossed the river and said it's time to do a mandatory program, that the range of views within that group, they can work out a bill. They can work out a program. Now, will it happen by next week? No, but I think the path forward is to make that mandatory coalition come together around one proposal and it would probably have elements of McCain-Lieberman and elements of the Bingaman national commission proposal. We thought that the McCain-Lieberman caps were more what's needed. We actually think, over the long term, you need to create the signal for reductions over the long term, not just leveling off. We have some concerns about the amount of emissions increase in the near term that would, in the next 10, 15 years at least, that would be allowed under the Bingaman NCEP proposal.
Brian Stempeck: Troy what do you --
David Doniger: I think that things can be worked out among that group.
Brian Stempeck: Troy, what do you see as the path forward over the coming year, when you're talking about the Senate or the House?
Troy Bredenkamp: Yeah, I haven't necessarily seen the seat change per se in terms of a mandatory program. The mandatory program that was on the Senate floor today got five or six votes less than it did two years ago.
Brian Stempeck: Right.
Troy Bredenkamp: So I'm not sure we are quite there yet. I also think that we have a lot of people with in the U.S. Senate that are feeling pretty good about this bill does is coming together. They really see it as doing a lot of the things David mentioned, promoting clean coal technology, certainly doing more for renewables than any piece of legislation in history. When you look at the 8 billion gallon renewable fuels standard, when you look at the production tax credits for wind and for biomass and for methane, all those things we are very much in support of. I think when you add all those things together people are saying, you know what, this bill actually does a lot more for the environment and does a lot more for climate than what people are giving it credit for. I would envision us probably staying on this path, looking toward the climate, but obviously saying, what can be done voluntarily? What can be done, obviously, without having a very detrimental impact to the economy?
Brian Stempeck: One last question for both of you because we're running out of time. Where'd you see the White House coming down on this? There were rumors that some people were thinking that maybe this would be the time that we'd see the White House kind of do an about face and support a mandatory program. Do you see that happening in the next year, maybe as Bush goes to the G8 this summer or is it going to be pretty much the status quo?
David Doniger: Well I hope for it. I don't expect it. There hasn't really been any sign of change from the White House. You know, the editing that they're proposing on the G8 text begins with removing the sentence, "Our world is warming," a pretty short four word sentence. They have a ways to go, but I hope for it.
Brian Stempeck: Troy, the White House?
Troy Bredenkamp: Well I would sense that the White House would probably be advocating their Clear Skies package, you know. Quite frankly, when you look at Clear Skies and its reduction in SOx, NOx and mercury at 70 percent it does, quite frankly, a lot in trying to get their arms around this particular issue and of course it is going to have reductions in carbon just by fringe benefit --
Brian Stempeck: That's really not saying --
Troy Bredenkamp: -- of Clear Skies. So I think we will see them pushing toward that. Obviously, re-advocating their position toward a voluntary program for carbon and obviously focusing in on carbon intensity, which is one issue that I think is a way we can obviously do a lot at home here without having a very negative impact to the economy.
Brian Stempeck: All right, we're out of time. We're going to stop there. I'd like to thank both of our guests today. That was Troy Bredenkamp of the American Farm Bureau Federation and David Doniger of NRDC. I'm Brian Stempeck. This is OnPoint. Thanks for watching.
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