Analysis & Opinions - Politico

Health Care Could Help Climate Bill

| April 1, 2010

Advocates for a strong climate change bill feared it had been subsumed by the health care conflict.

The administration's big health care push, they thought, left no oxygen in Washington for a second mega fight. And climate change skeptics got a boost from the e-mail mini-scandal enveloping British scientists. In addition, most everyone assumed that Congress had no energy for another tough vote this year.

But this hiatus might mean just the opposite.

While everyone was focused on health care, environmental and energy legislation advocates had time to rethink their policy. The delay might be just what the doctor ordered.

First of all, nothing succeeds like success. President Barack Obama has shown that he has what it takes to get things done. Second, the break gave lawmakers time to rethink what had been the accepted wisdom on climate change legislation.

A healthy portion of the credit for this must go to a bipartisan counterproposal by Sen. Maria Cantwell (D-Wash.) and Sen. Susan Collins (R-Maine). Their bill would give consumers some of the money raised from pricing carbon.

This partial refund, though not as strong as other revenue-neutral policies, marks a critical improvement in Washington's thinking about climate change policy.

To make this legislation work, Congress realized it has to increase the price of energy. But if you increase the price of energy during a Great Recession, you have to give it back to consumers some other way.

Climate policy should set us on a path to transform our energy supply. It should not be a deficit-reduction tool. This realization was evident in the White House's new budget, which no longer showed cap-and-trade revenues.

The second attraction of the Cantwell-Collins counterproposal lies in its attempts to deal with another big problem of the original legislation: The price volatility inherent in a cap-and-trade market.

Energy price volatility in the European carbon trading system sent shivers down the spines of American utilities and manufacturing sectors, as well as the U.S. Chamber of Commerce and other business groups. So now Congress is discussing measures that aim to reduce volatility.

A stable energy price will allow better planning for both U.S. businesses and American households. The "collar" (a ceiling and floor for emissions prices) laid out by Cantwell-Collins is still too loose and actually expands over time, allowing for substantial volatility. But it marks a big step in the right direction.

Finally, in recent days, Republicans, like South Carolina Sen. Lindsey Graham, and Democrats, like Massachusetts Sen. John Kerry, have been talking about levying a "linked carbon fee" on transportation fuels.

The Kerry-Lieberman-Graham outline, sponsored by Kerry, Graham and Sen. Joe Lieberman (I-Conn.), proposes a linked fee on the carbon content in fuels — hopefully in a way that makes alternative vehicles and alternative transportation more attractive to both consumers and manufacturers.

This is yet another bow to the realization that the volatility of a cap-and-trade system is a nonstarter for large sectors of the economy.

This Senate threesome has used the time provided by the health care throw-down to meet with various industry experts, seeking their engagement in hopes of avoiding another lobbying and advertising frenzy to defeat a big bill.

Major endorsements would make a "yay" vote from coal, oil, and natural-gas states a real possibility. And it would avoid the hyperpartisan debate that drove the health care vote.

There are still those who say the damage done by health care will kill climate legislation. But the fact is that while that battle raged, significant progress was made in understanding how to go about legislation to reduce greenhouse gas emissions.

Chances have now increased substantially that, in spite of everything, a climate bill can be passed.

Elaine C. Kamarck, a lecturer at the Harvard Kennedy School of Government and co-chairwoman of the U.S. Climate Task Force, served in the Clinton administration as senior adviser to Vice President Al Gore.

For more information on this publication: Please contact the Belfer Communications Office
For Academic Citation: Kamarck, Elaine C..“Health Care Could Help Climate Bill.” Politico, April 1, 2010.