Warming to Legislation
Lieberman Sees Opening For Congress to Pass a Bill to Reduce Emissions
Sen. Joe Lieberman (ID-Conn.) has thrown himself into the global warming debate in typical fashion — reaching across the aisle and trying to find the middle. Critics from the left say his bill is too modest and could boost nuclear power, while critics on the right say it is too ambitious and will hurt the economy.
The middle is where the veteran Senator is usually found. He’s left the Democratic Party but still caucuses with the majority. He supports the administration on the Iraq War but is to the left on most other issues, including global warming. In an interview with Roll Call Executive Editor Morton M. Kondracke, he welcomed President Bush to the global warming debate but said the president’s recent proposal would do little.
To critics who say the technology is not available to reduce emissions, Lieberman said American entrepreneurship will respond to new mandates with innovation that will be affordable and pragmatic. He said scientists agree on the cause of warming, and it’s up to Congress to do something about it.
ROLL CALL EXECUTIVE EDITOR MORTON M. KONDRACKE: What do you think the honest chances for a climate change bill passing and getting signed this year are?
SEN. JOE LIEBERMAN (ID-CONN.): Possible but difficult. In other words, we’ve got to get 60 votes in the Senate, and then, obviously, the president has to decide, notwithstanding concerns he will probably have about the bill that he will sign it because he wants to get this started before he leaves office. There’s no question there’s movement. You know [Sen.] John Warner’s [R-Va.] great answer to why, after he opposed McCain-Lieberman twice, he sought to be my ranking [member] on this subcommittee and wanted to do something about global warming, he said two words: science, grandchildren. And I think that’s moving throughout the country and throughout Congress.
Also, most significantly, there has been very significant movement in the business community that has decided, I think, that something is going to happen here. In other words, that eventually there is going to be an American program to reduce greenhouse gas emissions, and they want to be part of the discussion, part of the solution. And a lot of them have decided that the sooner, the better because they want predictability for the very significant investments they are going to have to make.
So that’s why it’s possible. Why do I think it’s difficult? Because this is a big deal, it’s a big problem, and people are anxious now. It also speaks to more direct and tangible reasons why there are groups lobbying very hard against this. There’s a number who are particularly concerned about what they see as the speed with which we require reduced greenhouse gas emissions. We think it’s quite methodical over a four-decade-plus period of time. And then people are actually worried about the cost of it. The best recent answer we have is Environmental Protection Agency actually put out a report about two weeks ago, and it essentially says that the economy can handle it. There won’t be all that economic hardship because, we think, in a dynamic model there’s something about this that’s going to be great for our economy. Because when we deal with global warming, it necessarily has to reduce our dependence on foreign oil. And this bill, when it passes, will be the biggest American energy-independence program we’ve ever adopted.
ROLL CALL: So, what do you think about what the president’s approach is — having guidelines, granted that the emissions reduction in his approach is far lower than yours is? But he basically says that the technology is not there yet to accomplish your goals.
LIEBERMAN: Well, the people supporting the bill have different reactions to the president. Some are very critical. I mean, I was trying to think of a good turn of phrase like with the moon landing: This is a small step for man, a great leap for mankind. This was actually a very big step for the president, but not a very big step in terms of the global movement, to do something about climate change. I think it was significant because he was obviously recognizing the reality of the problem. He said that, for the first time, that we have to have a goal. I think it’s a very long-term, weak goal. Not only short of what the rest of the world was talking about — stabilize by 2025 — but it’s actually less than the Chinese say they are going to do. He also talked about legislation and created a sort of right and wrong way. Now I think as I look at it, is that our bill is right. He probably doesn’t.
But on the specific question of the technology, this is a really important point. Because our bill proceeds from the premise that the laws can drive technology. We saw this in the Clean Air Act. If we set a standard, a national goal, and we create some subsidies, as we do through this bill — investments and research, development and technology — American entrepreneurship will do it. And they will certainly do it a lot sooner. So on some sense, the president is saying this can’t happen until the technology to make it feasible is available. We’re saying, if you just sit back, the technology won’t be there for long time. If you say, this is our national goal, it’ll be there. The most difficult part of this, which is carbon capture and sequestration by the power plants. The administration’s own EPA says that if our bill went into effect, it would drive technology to the extent that by 2015 the necessary carbon capture and sequestration technology would be commercially available. That is a very positive finding by them.
ROLL CALL: Actually, the EPA, as I understand it — this would be an administration objection — that you would cost the economy up to 3 percent of the gross domestic product and we’d lose jobs, and that businesses would go offshore, because of the swiftness of the reductions. What do you say about that?
LIEBERMAN: There are various models they use. We think that their estimate of our bill, using realistic models, would not make an assumption for an 80 percent increase in GDP by 2030, and that’s just 1 percent lower than it would otherwise be.
One of the big items in negotiation here — and it’s going to be very difficult — is what are the early targets we set through reduction? The opening position of the power companies as a group is, we can’t do it any earlier than 2020. That’ll be the negotiation, but [our date of] 2012 is just a starter.
ROLL CALL: Why doesn’t your bill contain a specific encouragement of nuclear power, which is clearly the most cost-effective and available technology, to accomplish these goals?
LIEBERMAN: It will, and, as you know, the McCain-Lieberman bill had a nuclear section in it. Sen. [Barbara] Boxer [D-Calif.] is prepared to vote for a bill and asked us, please don’t push this explicitly through the committee. But we’re working on a nuclear section. There’s a lot of interest in it. It’s obviously of importance to [Sen.] John McCain [R-Ariz.]. And he wants very much to vote for this bill. So, it is going to have a nuclear support provision.
ROLL CALL: Another objection that you hear is that you don’t have a safety valve for the bill. And that you have a mandatory cap but no safety valve. And if some industry just can’t meet the goals, then they’ll shut down or they’ll go offshore. So why no safety valve?
LIEBERMAN: We worked with this, and we’re still working at it. We’ll raise a lot of money with people buying the credits, and all those are going to get refunneled into making the system work. A lot of them are going to helping coal and power plants develop the technology. A lot of them have been going into tremendous, really big, moon-shot-type programs of research and development.
ROLL CALL: How much money will get raised by the sale of emissions?
LIEBERMAN: Oh, very, very expensive — total market value of all the allowances in the system is about $7 trillion by 2050. But to create a safety valve or insurance, our answer to that has been to create something called a Carbon Market Efficiency Board. It is like a Federal Reserve Board for this system that has the power to step in and provide allowances and alter demands based on an impact that is much more onerous than we think — or, God forbid, if the economy goes into a depression for some other reason, and we simply can’t handle this. We are involved in some very important discussions with [Sens.] Arlen Specter [R-Pa.] and Jeff Bingaman [D-N.M.], mostly at the staff level to see if we can come up with a compromise. I think if we can do that, it’ll be one of the most significant things, because, if you ask me, what’s the No. 1 worry that I’m hearing? This is it, which is about the unexpected cost impacts. And what are you going to do if that happens?
ROLL CALL: Now, you can come up with a compromise on that — you think you can get 60 votes for the bill?
LIEBERMAN: I personally think we can. Yes, I do.
ROLL CALL: Well, the other big objection is that we’re going to impose caps on ourselves, but the Chinese and the Indians are not, and they’re going to pump carbon into the atmosphere and grow faster than we are. How do you meet that objection?
LIEBERMAN: These are just two biggest objections that I am hearing as I go door to door to my colleagues. So, I say two things. The first is, the U.S. historically is the largest contributor to the greenhouse gas problem. I think we have a responsibility — a moral responsibility — to be a leader here in solving the problem. But, you know, if the Chinese and the Indians don’t also become part of the solution, our reduction will still have a positive effect in terms of energy independence. But ultimately the world is still going to have a significant problem.
Outside the confines of this bill, I think we have a lot going on. The president is trying to get the Chinese or the Indians to accept goals. I don’t know if they’ll accept a mandate yet. I think that our leadership will put more pressure on them to do something.
We do have this provision in our bill that I think is creative, and at this point the best we can think of, which is essentially to say — don’t mention China, but this is clearly all about China — if a company is selling a product in the U.S., a foreign company, and enjoys a price advantage over an American competitor, that is the result of the fact that the American competitor has had to comply with a greenhouse gas reduction and the foreign company hasn’t, then we will impose a fee on them, the foreign company, to equalize the price. And we think we’ve drafted this in a way that is WTO-compliant. Assuming the positive, that we get this passed — because we’ll probably get it passed in the next two years — there will probably be litigation on it. But I think we can withstand everything. But for now, that’s the best, most specific, club, for lack of a better term, that I think we have.
ROLL CALL: Now, what entity gets the $7 trillion?
LIEBERMAN: $7 trillion goes to the Climate Change Credit Corp., which is a new private-public entity that we’ve set up.
ROLL CALL: Is it to be invested in alternative technology?
LIEBERMAN: In many things — low- income subsidies. I think the biggest single goes to coal, because we’ve reached the conclusion that coal is our most ample natural energy resource in the U.S. So, we’ve got to use it, but we’ve got to use it in a way that doesn’t produce greenhouse gases.
ROLL CALL: Now, what is to prevent this entity from indulging in industrial policy and picking winners and losers, and choosing, like, the Synfuels Corp. in the Carter administration, which got nowhere, or becoming another big ethanol monster?
LIEBERMAN: Well, we’re trying to deal with that. A few of the Senators have raised this question. It’s a fair question, and we’re thinking about it, whether or not there’s something we can do. It is a lot of money they’ll be spending, of course. These are people nominated by the president and confirmed by the Senate. So, we’re working on that, and we’ve built into this a mandatory, every-three-years review by the National Academy of Sciences. We presume that over the 40-plus years of this bill it will be changed many times. The process was, all of the discussions and the negotiations we’re having with our colleagues will result in a manager’s amendment, will result in a substitute bill, which we’re going to introduce on the floor.
ROLL CALL: OK, one last thing. I want to ask you some [Oklahoma Republican Sen.] James Inhofe-type questions. He claims, for example, that there are 400 scientists who say that the worldwide supposed consensus is not right, and that it really has not been fully established that man is responsible for what is indisputably a warming phenomenon. That, for example, Greenland once was green. Why? Because we’ve had cyclical warming. Mars is getting warmer. It could be sunspots. So what do you say to all that?
LIEBERMAN: Well, just that the scientific consensus here is so strong, that not only that the planet is warming, but we’re doing it. People are doing it with carbon dioxide in particular. In the time that I’ve been interested in this, since the late ’80s, early ’90s, at the beginning you’d have to use computer modeling, to suggest the worst impact. Now you can see with melting of the polar ice caps. It’s quite remarkable. And so, to me, there is not much scientific debate — real scientific debate — anymore about the fact that we’re warming. I don’t undervalue what the president did [Apr. 16]. I think it was actually quite significant. He’s come a long way. Not as far as we think he should — but basically, he acknowledged, this is a real problem, we’re causing it, and America’s got to do something about it. The other thing to say, is that, as John McCain says, if we’re right about the science, then doing something will really save the planet for our grandchildren and beyond. If for some reason we’re wrong, we will nonetheless, then, dealing with the global warming problem — what we see as the problem — make America energy independent, make the world’s environment cleaner for our grandchildren, and incidentally improve our national security because we’ll no longer be dependent on countries that don’t like us very much for oil.