The State of the Climate Change Debate

As oil prices and global temperatures both skyrocket, discussions about climate change solutions grow increasingly complex and increasingly tense. Important legislation designed to curb emissions is pending in Congress, but throw in a presidential election, a weakening dollar, and increasingly tight budgets into the mix, and the future of any such measures is decidedly uncertain.

So where do we stand? What exactly does the legislation mandate? Is it at all feasible? How much would it cost you and your family? How are businesses reacting? We put these questions and others to Terry Tamminen, who has a very full environmental portfolio. He is former chief policy advisor for California Governor Arnold Schwarzenegger. He's author of Lives Per Gallon: The True Cost of Our Oil Addiction. He's Operating Advisor to Pegasus Capital Investors, which focuses on innovative clean-tech companies, and where he heads a team that helps states with the development and implementation of environmental policies. And on top of that, he's also the Cullman Senior Fellow with the New America Foundation, where he spends his time advising world leaders on how to design and implement climate-change solutions.

There's been lot of talk about the climate-change legislation that's pending in Congress. What exactly is this bill all about?

The latest bill to tackle climate change is the Lieberman/Warner "America's Climate Security Act" [also known as S. 2191]. It sets up a cap-and-trade system and other measures to reduce greenhouse gases as close to the sources as possible.

Because of the more than 180 amendments to the bill that have been considered, many still unresolved, it's uncertain exactly what S2191 would accomplish, but generally speaking, it would reduce U.S. greenhouse gas emissions to 1990 levels within 20 years or less, followed by more dramatic reductions comparable to those being attempted by the rest of the developed world under the United Nations's Kyoto Accord.

Aren't some states already taking action along these lines?

They are, and unlike its predecessors, S2191 recognizes that much of this work is already being done by states and regions. Over 30 states now have, or are developing, comprehensive climate action plans, which include participation in one of the three regional cap-and-trade markets that have been created by states. S2191 rewards these early-action states and sets minimum requirements for laggard states to get started.

If it were to pass, what sort of ramifications would the bill (S 2191) have for American families and businesses?

Climate legislation in the U.S., whether federal or state, will have interesting results for all of us. The use of market mechanisms, like cap-and-trade, will force industries that burn large volumes of the dirtiest fossil fuels to internalize the cost of pollution, which will likely cause price increases. But it will reward energy-efficiency and the use of renewables like solar and wind power.

These costs may be passed on to consumers, but experience shows that it could actually lower costs in the long run. The legislation would make us less dependent on fuels like oil that is unpredictable in terms of both availability and price. Total costs will also be lower, because renewable energy (increased development of which is a likely outcome of this legislation) does not impose other costs on the taxpayer, such as defense costs, lung cancer, crop damage, and toxins in food (like mercury from coal-fired power plants).

Can you give us an example of how costs are lowered in this way?

California passed regulations over the past 30 years that incentivize energy-efficient appliances, buildings, renewable energy investments, and conservation. The result is that our average price per kilowatt of electricity is nearly the highest in the nation, but average bills are among the lowest. Californians consume 40 percent less electricity than average Americans -- and we have plenty of flat panel TVs, hot tubs, and air conditioners in the desert -- showing that energy prices are less relevant to consumers and businesses than how energy is generated and used. The same could be true for thoughtful pricing around greenhouse gases, whether imposed by strict regulation and fees or by cap-and-trade systems.

When you say the "long-run" how long are we talking?