With the stock market plummeting and all eyes on the presidential campaign, has the push for comprehensive climate legislation fallen by the wayside? Will Democrats turn the focus back on cap and trade during the next session of Congress? During today's OnPoint, Nikki Roy, director of congressional affairs at the Pew Center on Global Climate Change, discusses the new Dingell-Boucher climate draft, released in the House last week. Roy explains what the main sticking points to the draft are and gives his take on a possible timeline for legislation over the next two years. He also explains how international pressure will impact domestic climate negotiations in 2009.
Monica Trauzzi: Welcome to the show. I'm Monica Trauzzi. With us today is Nikki Roy, director of Congressional Affairs at the Pew Center on Global Climate Change. Nikki, thanks for coming on the show.
Nikki Roy: Thanks for having me.
Monica Trauzzi: Nikki, the newly released Dingell-Boucher draft climate bill is really seen as the start of the climate discussion for 2009, for the next session of Congress. Is it a good starting point?
Nikki Roy: I think it's a great starting point. It has good bones. It's a well-crafted bill. I think it incorporates a lot of the best thinking so far. There are elements to it that we would want to see a little different, the targets and timetables maybe we'd like to see a little different. The trade measures maybe could use some adjusting, but on the whole, I think that staff and those members have done a terrific job of reaching out to all possible sources of ideas on this and bringing the best in.
Monica Trauzzi: And there's been some specific issues with the short term reductions, the environmental community has sort of come out and said they're not stringent enough. Would you agree with that?
Nikki Roy: Our feeling is that it would be good to, at least by 2020, get the levels down to our 1990 emissions study, even if that means providing more offsets early on. We recognize that there's a balance between how strict the targets are and the amount of allowances that you provide. And we would go to the other end of the balance than the one that he has struck. But, that said, it's a very good opening bid.
Monica Trauzzi: What do you see as the main sticking point where we're going to see the most debate dealing with this draft?
Nikki Roy: Well, among those who want to see action on this, because there's another community that doesn't want to see action, but among those who are genuinely interested in action on this, it's sort of a familiar list. Are the targets and timetables fast enough to deal with what the science tells us about climate change? Are they slow enough to deal with what the technology might be able to provide us, you know, realistic enough? Can the offsets be counted on as real and verifiable? And will there be enough of a supply of offsets? So there are different sides to each of these questions. If we actually take this step, then how much closer does that put us to bringing China and India and the other developing countries on board? So I think all the familiar questions will be raised, even by the people who have a genuine interest in this. Those who don't have a genuine interest will be raising some familiar points also. They'll be talking about the impact to consumers and to businesses, which are legitimate issues. Sometimes the day-to-day use is a little sketchy.
Monica Trauzzi: Dingell and Boucher have said that the lower, short-term requirements will sort of help us ease into a carbon constrained economy, which is an interesting point to make considering all the financial problems that we're having right now. Is this a tough sell in the current financial environment and is it an easier sell when you have lower short-term goals?
Nikki Roy: The current financial crisis certainly complicates this debate and maybe slows it down and certainly requires us to look very carefully at any policy that we would propose and make sure that it doesn't harm the economy and, hopefully, even helps the economy in the long run. And I think, certainly, slowing the emissions reductions is one way of giving people a little more confidence that it won't cause huge problems. But another way of doing that is providing offsets. Another way of doing that is making sure that you have enough in the strategic reserve that they've also set up in the bill to provide that safety measure.
Monica Trauzzi: Which industries are happiest with this bill?
Nikki Roy: Which industries are happiest, I know some of the power sector have come out and are very strongly supportive of it. But I have to say, one would think that a congressman from the southwestern corner of Virginia would have written a different bill. I don't see this as a coal industry bill. I think he drove it right up the middle and I think you see that reflected in the statements of people on many different sides of this question, even the environmental community. And we don't consider ourselves an environmental group, but the green group enviros came out with a statement saying, "Good, good for you. Here are our differences, but this is a great start." And we're seeing that in the industry as well.
Monica Trauzzi: So, do you think that Dingell and Boucher sort of learned from the Lieberman-Warner debate that we saw earlier this year? Is this sort of more of a middle ground draft bill when compared to Lieberman-Warner?
Nikki Roy: Let's see, let me come back to Lieberman-Warner in a second, but let me just comment on this. I think there is real seriousness of purpose in this bill, the fact that it doesn't have a safety valve, the fact that it has real reductions in 2020 and real reductions by 2030 and not just a number in 2050. I think that's significant. I think the fact that regarding the issues of pre-emption of states that they're laid out there as options. Mr. Dingell has been very clear, his feeling about the California tailpipe regulations, yet he lays it out there as an option. He's made clear where he is, but he also understands that not everybody is in that same place. We're going to have to have a conversation about this. Everything about this bill suggests to me a seriousness of purpose. Now, I don't want to detract in any way from what Chairman Boxer did. For example, she laid out, in great detail, what you do with the allowance value. That actually, in my opinion, took a lot of guts and it left her open to attack from a lot of people. But to actually say this is what we're going to do, these are the different purposes to which we put this allowance value and, by the way, not 100 percent auction, and a lot of things that are politically difficult for her and some other Democrats to do, I think that showed guts too. But we're at a different time. I do think that Mr. Dingell and Mr. Boucher have learned from the experience in the Senate and I think we have taken a step forward.
Monica Trauzzi: Dingell really seems to be taking the reins on this issue in the House. Is there still need for the Select Committee on Global Warming then if Energy and Commerce is really going to be the focal point for this debate?
Nikki Roy: The Energy and Commerce Committee is supposed to have legislative activity on this issue and it has been through this Congress and that's the way that even the Select Committee was designed. The Select Committee was designed to raise issues that you wouldn't necessarily focus on if you were focusing on the legislative aspect of this. And I think there's an argument that it could continue in that respect, because really climate change cuts across so many jurisdictions in the House. And they have a committee that continues to raise the issues that you might not look at if you're focused on say a cap-and-trade policy. I think there's an argument that it can still be useful. As a legislative place, that is Energy and Commerce.
Monica Trauzzi: OK, so what kind of timeline are we looking at here for let's say the next two years in terms of committee action bringing it to the floor and then eventually getting something signed?
Nikki Roy: Historically, if you look at our 30, 40 year history of U.S. environmental law, we typically pass our major environmental laws within a few months of the election and that's because Congress likes to take its time on big, complicated environmental legislation. I've always thought that we were looking at a latter half of 2010. If we were looking at enactment in this Congress at all, it would be the latter half of 2010. But even to meet that deadline will require a lot of fast work. What I anticipate is that early next year the president, whoever is elected president, because both these candidates are very strongly supportive of climate action, and cap and trade in particular, that the president will come out with a framework that talks about energy policy and climate policy. I don't think climate policy all by itself, but I think in the context of energy policy, including a cap-and-trade bill. My sense is that both committees of jurisdiction, the Energy and Commerce Committee and the Senate Environment and Public Works Committee, will start acting on those ideas very quickly, will contribute ideas of their own, may even get out in front of that, depending on who is elected president. And I would imagine that by the end of next year we'll see action in one or both of those committees, maybe even see something through one or both houses, but that we would then take 2010 to conclude the debate. That's optimistic, but I think it's plausible.
Monica Trauzzi: That's optimistic considering the financial crisis also I think, because a McCain or Obama administration might be hesitant to start talking about cap and trade or raise the dreaded T word, tax.
Nikki Roy: Sure, sure. Fair enough, but let me say why I think there is actually an incentive for industry, even industry that is not thrilled with the idea of regulating greenhouse gas emissions. We have Mass. v EPA. We have the Supreme Court having told EPA you have the authority and responsibility to regulate greenhouse gas emissions. EPA has come out with this advance notice of proposed rulemaking, which is a pretty good discussion of all its options. But if EPA starts to feel dilatory to the Supreme Court, the Supreme Court can come in and say, "OK, that's it. Here are your deadlines." I think a lot of people in the industry look at the notion of best available control technology for carbon dioxide as a bad prospect and one that, as much as they might not like cap and trade, cap and trade is better. So that's one thing that I think drives industry interests. Second, the Clean Air Interstate Rule, the fact that that's gone now creates a lot of uncertainty especially for the utility industry. And I think there's a sense that while you're fixing that problem, and we absolutely do need to fix that problem, it probably makes sense, just rationally, just as good policy, to look also at the carbon dioxide and the mercury problem, which has obviously been something that people have been kicking around for a decade now. And maybe this would be the time to do it. So, I think, even with the financial crisis, even with industry justifiably saying, "Oh, my God, stop the noise! Don't put us through that one also," they might have a real reason to want to get this done as well.
Monica Trauzzi: OK, final question here. How much of a role is international pressure going to play into all of this? We haven't spoken about our global partners in all of this. You know, 2009 is going to be a big year and there have been some goals set for the end of 2009. What does that mean for what's happening domestically?
Nikki Roy: Honestly, I don't think pressure internationally will play in a big way in Congress, but I do think that the opportunities created by the international negotiations at Copenhagen in December of 2009 create a big opportunity. Did I oversell? They create a big opportunity because say that we're part way through action on this domestic cap-and-trade bill by next year and the president's people go to Copenhagen and they say, well, this is the neighborhood of what we think we'll be able to commit to internationally, domestic and international policy developed in parallel, but we need to hear from you, you, the major economies, including the major emerging economies of the world. You need to contribute something as well. Not the same thing that we're doing, maybe not even the same form, but something. We all need to be in this together. If we hear from the other major economies that they're willing to shoulder something as well, and then the president and those members of Congress who've gone to Copenhagen, come back, bring that into the debate, I actually think that will help us move the legislation forward.
Monica Trauzzi: All right, this is going to be interesting to watch.
Nikki Roy: Yes, it is.
Monica Trauzzi: Thanks for coming on the show.
Nikki Roy: Well, thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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