Offering up one of its first attempts to seriously deal with the issue of climate change, the U.S. Senate unveiled the industry-backed Low Carbon Economy Act of 2007 this Wednesday to much fanfare. Much of it unwarranted, as it so happens. Although the bill, sponsored by a motley assemblage of labor unions and electric utilities and a bipartisan group of senators led by Jeff Bingaman (D-NM) and Arlen Specter (R-PA), would effectively set mandatory limits on carbon dioxide emissions beginning in 2012 through a cap-and-trade system, it comes with a huge caveat: a "safety valve."
The so-called "safety valve," which would allow industry to purchase an unlimited amount of emissions credits at a pre-set price ($12 per ton in this case), was necessary, Bingaman and Specter insisted, to ensure that energy companies would "go along" with the legislation (i.e. not lobby it to death). Casting aside the senators' argument, there are many reasons why establishing a "safety valve" is simply bad policy. One that they should seriously consider removing. As Climate Progress' Joseph Romm recently elaborated in a thoughtful post on the subject, there are three fundamental reasons why you wouldn't want such a provision: setting the valve price too low would undermine the rationale for developing new, better GHG reduction technologies, it would frustrate attempts by the U.S. to participate in a global carbon trading market and it would render future emissions targets meaningless.
Predictably, environmental groups have come out against the "safety valve" provision, rightly calling it a "giant loophole" in the bill that "could create a 'formula for inaction'." Barbara Boxer, the chairwoman of the Senate Environment and Public Works Committee, has also criticized the bill for potentially hindering growth in new energy technologies, explaining that a safety valve "presents problems because the business people tell us it will undermine the certainty of their investments." Would you want to invest in a new, expensive technology with no future?
While it is nice to see the Senate finally reach a compromise on setting stricter limits on carbon emissions (though we must say the bill's enactment isn't assured yet), the truth is such a bill would do little to significantly reduce the country's total GHG emissions. The "safety valve" provision gives energy companies no meaningful incentives to innovate and develop cleaner, more efficient technologies and will thus almost guarantee little movement away from the current status-quo. We need a bill with more bite that will encourage companies to invest in new technologies and that will leave us better prepared to tackle rising emissions in the long-term.
Via ::Reuters: Lawmakers unveil industry-backed climate bill (news website), ::Climate Progress: The Low Carbon Economy Act of 2007 (blog)
See also: ::Signs Of Climate Progress: Advanced Technology Options For Congress To Consider, ::Tell Congress to Support Clean Energy, ::Tell US Congress to Strengthen Fuel Economy Standards, ::New CAFE Standards? Don't Break Out the Champagne Yet