Category: Uncategorized

Cheat Sheet for Climate Policy: Part II – What’s Important for a Good Climate Bill

Posted on by The Progressive Policy Institute

How to tell a good climate bill from a bad one? This series will guide you through the main issues that are likely to arise in the coming weeks as the Senate takes on climate change. In this post we highlight issues that are very important — but not quite essential — in climate policy. These ideas will likely play a key role in the eventual passage of legislation from the Senate. (To read the other posts in the series, click here.)

In our last post we identified the two absolutely critical issues for any climate policy: putting a price on carbon and targeting meaningful emissions reductions. Pricing carbon imposes costs on emitters, thereby changing behavior and encouraging innovation, but it will also generate revenues. Once they are generated, who receives them and how they are spent are important elements of climate policy.

Category II Issues: Key Elements of Climate Policy

#1: Public revenue or private giveaways?

If carbon is priced with a tax, it will generate new government revenues. If, as seems likely, carbon is priced with some form of cap-and-trade, things get a little more complicated. For cap-and-trade to work, emissions allowances must be allocated in some way. The two simplest ways to allocate allowances are to give them away for free, or to auction them to the highest bidder. Only the latter would generate any new public revenues. Allowances are assets with real value, so giving them away is no different from a government subsidy to the recipient.

Auctioning allowances is generally more efficient than giving them away — society as a whole is better off the more allowances are auctioned. Nevertheless, many groups of emitters or industries have made arguments (and will continue to do so) that they should be given free allowances. They argue the impact of climate policy on their industries will be too onerous or that they represent the interests of their consumers. Generally speaking, these claims are old-fashioned Washington handout-seeking behavior.

Fights over allowance allocation were predictably rampant when the House considered its bill, Waxman-Markey, last year. Comparatively few allowances would be auctioned under Waxman-Markey, especially before 2020, and substantial allowance handouts (35 percent of allowances) would be given to local gas and electricity distribution companies, ostensibly to protect consumers from increases in electricity prices. It is very likely that allocation will again be a central (possibly the central) political issue in the Senate debate.

A carbon price won’t affect every person, firm, or industry equally. In particular, low-income households will feel the effects of a carbon price far more than wealthy households, and an equitable climate policy should compensate the losers to offset that disparity. The best way to do so would be to compensate them with cash (through direct rebates or tax cuts) raised from auctions – yet another factor in their favor. Under a giveaway scenario, the government could hand out free allowances to utilities, hoping that they pass along savings in the form of lower energy prices. That may help consumers, but they would still be better off if they receive the savings directly out of auction or tax revenues and can make their own choices about how to spend that compensation—more on how these revenues could be spent in the next section. Besides, lower consumer energy prices can blunt the price signal a cap sends, leading to increased energy usage.

However attractive auctioning all allowances is, it’s probably not politically realistic. Handouts will probably have to be made to some industries to get votes for the bill (though there’s still hope, on both the right and left, that the general welfare can prevail over handouts to special interests ) In any case, auctions are the most desirable distribution mechanism, and should be a major component of any climate legislation.

#2: What do we do with the money?

Assuming you’ve auctioned at least some allowances (or have revenues from a carbon tax), what should the government do with the money? There is no easy answer here, but in general we have three options:

a) Reduce existing taxes

If the government receives revenues from a carbon price, one response is to cut the taxes already on the books. Reducing other taxes shifts the U.S. tax burden from those who currently bear it (primarily income earners) to carbon emitters and, indirectly, to consumers of carbon-intensive goods and services. In general, this is a good thing, for the simple reason that you are lowering taxes on something you generally want people to do (work) and raising them on something you don’t want them to do (emit carbon). In economic terms, you move from taxing something we generally think has positive externalities to something we know has negative externalities. And politically, who doesn’t like lower taxes? One drawback is on that you may end up reducing progressive income taxes in favor of carbon pricing, whose costs might be harder to bear for those who can least afford it.

b) Dividends to consumers

If you’re troubled by the possibly regressive character of tax cuts, but think returning carbon price revenues to the people ultimately affected by increased prices is a good idea, then a good alternative is direct payments to consumers. This is the “cap-and-dividend” approach taken by the Cantwell-Collins bill in the Senate that Danny wrote about recently. Under cap-and-dividend, revenues generated by an allowance auction (or a carbon tax) are used to make payments directly to consumers. In other words, every household would get a check. Because all households would get equal payments, the plan turns a somewhat regressive carbon price scheme on its head by transferring money from those with a large carbon footprint (often the wealthy) to those with a smaller one (often the poor). Politically, it’s broadly appealing—even conservatives that tend to oppose redistribution of wealth find a lot to like, in large part because dividends “cut government out of the picture.”

Instead of sending everyone the same amount, it’s also possible to try to identify specific losers from climate policy and compensate them directly. One example of such relative losers might be trade-exposed industries, who would stand to lose competitive ground against foreign firms not subject to a carbon price (more on this issue later in the series). Making payments to industries instead of households isn’t usually characterized as cap-and-dividend, but the difference is only distributional—who gets the money. One disadvantage is that direct dividends pose a bureaucratic challenge — there is no clear mechanism for distributing them.

c) Public goods

Alternatively, the government could spend the revenues from an auction. In some cases, the government can create greater benefits by spending revenues than by giving them back. Restricting ourselves to climate-related spending, good examples might be energy R&D, investments in adaptation to climate change, or efforts to reduce emissions internationally or verify international emissions offsets. Indeed, the federal government will need to spend money in some of these areas regardless because the private sector may underinvest in energy R&D, and will almost certainly underinvest in climate change adaptation and international mitigation efforts. The Waxman-Markey bill devotes auction revenues to many of these areas, and a Senate bill probably will (and, in large part, should) do the same.

Of course, carbon price revenues could also be used for any other government expenditure, from education to infrastructure or defense. Revenues could also be used to pay down the debt. Any of these might be worthwhile expenditures, but it’s important to remember that any revenues that are not returned through dividends or lowering other taxes represent a tax increase on anyone who uses carbon—that is, everyone. Opponents of action on climate often characterize it as a major tax increase. To the extent that revenues from a carbon price are dedicated to unrelated government expenditures, this criticism isn’t dirty politics, it’s a fact. Taxing and spending on a given project may or may not be a good idea, but bringing carbon into the picture doesn’t change the fact that it’s taxing and spending.

#3: Market design: banking and borrowing

A major policy and political priority for climate legislation is to reduce emissions as effectively and cheaply as possible. Whether this goal proves to be attainable or not depends greatly on how cap-and-trade markets are designed. While these issues tend to fly under the radar of the political debate — partially because they are complex and partially because they are not very sexy — they have major implications not only for how firms will behave under a cap-and-trade system, but the timing of actual emissions reductions.

There are multiple options for controlling the costs of climate legislation compliance (most of which will covered in our next post), but the key aspects are the closely related concepts of banking and borrowing of allowances. The general concept of banking isn’t terribly complicated: firms ‘bank’ allowances by overcomplying with the cap (they reduce their emissions more than is required) throughout the program, thus building a surplus of allowances that they can use at a future date. Similarly, firms may choose to ‘borrow’ allowances, by using an allowance from a future year, then repaying that allowance with future reductions (possibly with interest).

Polluting firms have two reasons why they want to be able to bank and borrow. First, the path of the lowering cap (established by legislation) will likely not be set in a way that is optimal for regulated parties. Banking and borrowing credits gives them the flexibility to take an emissions-reduction path that is most cost effective, either by filling their bank with credits through overcompliance in the early years of the market or by borrowing in later years if they expect some kind of efficiency increase to come through at a certain future time. Second, banking and borrowing can protect firms against unforeseen shocks to their compliance paths. For instance, a company may have unanticipated problems that force it to use a more carbon-intensive energy source, increasing its emissions above the number of allowances it possesses. Borrowing allows the firm to get more allowances now in exchange for stronger future reductions.

While some may claim that banking and borrowing look like a way to game the system, they are simply mechanisms to help firms control costs and reduce their emissions as efficiently as possible. A strict cap-and-trade system where firms can only trade amongst each other would be more expensive. Banking and borrowing helps reduce costs while still achieving the cumulative emissions reductions desired. A study by Resources for the Future scholars Harrison Fell and Dick Morgenstern contends that borrowing generates significant cost savings, especially when the cap is being lowered at some rate (which is the case in all serious climate proposals). If borrowing is restricted, costs go up.

Allowance banking and borrowing are key issues for climate policy because they will not only play a major role in the behavior of firms in the cap-and-trade market, but they will also have a strong influence on the actual path of emissions reduction. This gets back to the point we made in the last post, where we said that specific reduction targets don’t matter as much cumulative emissions reductions. The ability to bank means that carbon polluters may strongly overcomply, meaning that they will reduce far beyond the 17-20 percent reduction goals in 2020. Analyses from the EPA and the EIA back this up. The flipside, however, is reductions in later years may be less than the cap as companies start to cash in their banked allowances. As long as the cumulative emissions over the life of the regulation come in under the cap, it’s fine for the year-to-year levels to be ruled by how regulated parties bank and borrow.

The Bottom Line

In the last post, we presented three issues that we deemed essential to any climate bill. Here we discuss the merely important:

  1. How are emissions allowances allocated—are they auctioned, or given away?
  2. How are the public revenues from climate policy spent?
  3. Is the allowance market designed for economic efficiency—does it allow banking and borrowing?

In our next post, we will travel further down the rabbit hole and address some further issues climate policy that are still relevant and meaningful, but less important than what we’ve talked about so far.

Photo credit: https://www.flickr.com/photos/uwehermann/ / CC BY-SA 2.0

Crist Independent Run Likelier; Brown Takes Lead in California

Posted on by The Progressive Policy Institute

The madness in Florida continued to rivet political junkies this week, as the odds of Gov. Charlie Crist withdrawing from the Republican U.S. Senate field and refilling as an independent continued to rise. A second poll (this one from Rasmussen) shows Crist doing pretty well in a three-way contest with Republican Marco Rubio and Democrat Kendrick Meek. Nate Silver notes, however, that the dynamics of a three-way race are not friendly to the perma-tanned governor:

[If] Crist wants to avoid falling into third place, he probably needs to start appealing to Democrats and Democratic-leaning independents almost immediately. There’s a little bit more breathing room over on that side of the aisle because Kendrick Meek is relatively unknown by the electorate: just 26 percent of the electorate have an opinion of him, according to Quinnipiac, versus 57 percent for Rubio (and 84 percent for Crist)…. But Crist will need a fairly broad amount of support from Democrats and Democratic leaners in order to have a shot in a three-way race in which Rubio will almost certainly finish in at least the mid-high 30s, and his best way to achieve that is to prevent Meek from getting traction in the first place. Having denied Meek viability, he could then tact back toward the center or the center-right come the fall.

But, this isn’t easy: the more Crist thrusts to the left after having being reborn as an independent, the more flip-floppy he’ll look. It’s quite a needle to thread and it’s possible that he’s simply waited too long to make this move.

Crist has until April 30 to make up his mind what he’s doing.

In one of the fast-approaching 2010 primaries, things are heating up in Indiana, where former Rep. John Hostettler and state senator Marlin Stutzman are tacking to the right in the GOP primary in an effort to knock off the early prohibitive front-runner for the Senate, former Sen. Dan Coats. At least one conservative pundit is predicting a Stutzman upset, and he’s gotten support from self-appointed conservative GOP litmus-tester Jim DeMint, American Conservative Union president David Keene and RedState.com’s Erick Erickson.

Meanwhile, down in Georgia, Democrats desperate for a Senate candidate got lucky, as Labor Commissioner Michael Thurmond, an African-American who has won three statewide elections, filed to take on Sen. Johnny Isakson, who’s been having some health problems. Thurmond’s move should help keep Georgia’s Democratic biracial coalition intact if former Gov. Roy Barnes, who is white, beats Attorney General Thurbert Baker, who is African-American, in the gubernatorial primary. Thurmond had been mulling a race for Lieutenant Governor.

As I noted in a separate post this week, the most fascinating polling news was a Rasmussen survey in California that not only showed former Gov. Jerry Brown moving out in front of Republican Meg Whitman in the gubernatorial contest, but also indicated that Whitman’s heavy spending on ubiquitous ads may be backfiring early in the cycle. Rasmussen has also done the first public polling since Bob Ehrlich officially launched a rematch against Maryland Democratic Gov. Martin O’Malley, showing a close race led narrowly by O’Malley.

 

Ed Kilgore’s PPI Political Memo runs on Mondays and Fridays.

Does Charlie Crist Have a Prayer?

Posted on by The Progressive Policy Institute

The following is an excerpt from a column by Ed Kilgore in today’s New Republic Online:

The first thing you need to understand about Florida’s political climate is that its seemingly endless summer of Boom Times seems to be coming to a close. The vast migration to the state that caused its population to increase over 16 percent since the 2000 census seems to be winding down, and last year, shockingly enough, it actually lost population. The state’s economy is suffering from problems that are deeper than any business cycle: Its 2.7 percent drop in per capita personal income has pushed the state near the bottom of rankings by percent change of personal income data. State government and politics have followed suit, inaugurating a period of unhappy partisan and ideological wrangling with no clear outcome in sight.

Many of the troubles resemble the problems of Florida’s distant political cousins, Arizona and Nevada, both Sunbelt areas with significant retiree populations that have also been hit by an economic triple-whammy of rapidly declining housing values, reduced tourism, and eroded retirement savings. Not surprisingly, all three have developed volatile, toxic political climates this election cycle. (In Nevada, the only politician who is perhaps less popular than the Harry Reid is the Republican governor, Jim Gibbons. In Arizona, the 2008 Republican presidential nominee, John McCain, whom you’d expect to be riding high along with the GOP’s national renaissance, is scrambling to the right to survive a primary challenge by a defeated former congressman and radio talk show host, J.D. Hayworth.)

In addition, Florida has certainly suffered from the global economic slump because it is a major magnet for foreign investment. It also shares some of the structural problems of its otherwise very different Southern neighbors, particularly chronic underinvestment in public education. And when it comes to the fiscal and political consequences of a bad economy, Florida is one of just a handful of states with no personal income tax, which has made property-tax rates on steadily decreasing real estate values a red-hot issue (a billion-dollar deal that allowed the Seminole Indian tribe to expand its gambling operations was one of the only things that allowed legislators to balance the latest state budget).

So the question is, what does this mean for Charlie Crist, the erratic and heavily-tanned governor who is throwing the calculations of both major political parties into chaos? And what does it mean for Democrats, whose electoral future continues to depend, in part, on the whims of Florida’s diverse and fickle voters?

Read the rest at the New Republic Online.

Earth Day and Energy Security

Posted on by The Progressive Policy Institute

Throughout the progressive blogosphere, Earth Day generates tons of buzz as like-minded liberals gather in chat rooms and on message boards for an annual rally to protect Mother Earth. Re-energizing (pun intended) focus on the environment in the wake of a so-so Copenhagen Summit is a worthy endeavor, of course, but it can sometimes feel like preaching to the choir.

Meanwhile, the Kerry-Graham-Lieberman bill is languishing in the Senate with little hope of movement before November’s elections. And despite its tri-partisan co-sponsorship, conservatives continue to insist on peddling the notion that climate change and Santa Claus share more than a melting polar ice cap. Meanwhile, their supporters continue to buy it, grasping at incontrovertible “proof” like leaked emails from Cambridge.

While the right is intent on pretending climate change doesn’t exist, there’s one aspect of it that’s getting tougher and tougher to ignore: energy security. Not everyone believes that the earth is warming, but most eagerly accept the idea that America should be buying less gasoline from the Middle East. The most credible messenger is the military — the one organization whose mission demands that it become more energy efficient.

Late last year, my PPI colleague Mike Signer wrote a piece on the topic for U.S. News. Here’s what he said:

[T]he most innovative and effective actors in the carbon-reduction arena bear zero resemblance to this outdated cartoon. No hemp-wearing hippies here: Today, it’s the Army, Air Force, Navy, Marines, and Coast Guard who are aggressively pursuing plans for sustainable energy, reducing carbon, and achieving energy independence.

It’s no mystery why: Our armed men and women are truly the point of the spear. The services aren’t motivated just by the “soft power” of moral authority or the pursuit of idealism for its own sake. It’s in fact “hard power” concerns—the security of our troops, the economic independence of our energy supply, and the long-term need to better control the geopolitical implications of climate change—that have driven the military to take the lead.

Consider the facts. Today, an infantry soldier on a three-day mission in Afghanistan carries over 25 pounds of batteries to charge his equipment, hampering his maneuverability and can even causing muscular-skeletal injuries. In Iraq and Afghanistan, U.S. forces have suffered chilling casualties guarding convoys of trucks carrying oil. Meanwhile, every $10 increase in the price of oil translates into a $1.3 billion increase in the Pentagon’s operating costs.

In all of these cases, clean energy and efficiency programs would not only help reduce our carbon output and achieve energy efficiency; they would directly increase the effectiveness of our military.

Remember in the summer of 2008 when the price of a gallon of gas ran to a shocking $4? Well, multiply that by 100 — literally — to get cost of a gallon every day in Afghanistan. By the time you add the transportation price and supply losses from attacked convoys, the Pentagon estimates that fuel costs the American taxpayer $400 a gallon. And much of that $400/gallon is put in Abrams tanks that get… wait for it… just over a half-mile to the gallon. Ergo, one mile in an Abrams tank costs about $700.

The good news is that organizations like Operation Free — a group of military veterans who recognize the life and death nature of fuel efficiency – are traveling the country to promote the policies that will improve our energy security. So whether or not you “buy” climate change – and frankly, you really should — it’s tough to argue against a military that is trying to cut the tether to carbon-based fuels that hamper mission effectiveness. Focusing on this aspect of the issue may well be the best bipartisan way to move public opinion on reducing the use of carbon-based fuels.

Photo credit: https://www.flickr.com/photos/soldiersmediacenter/ / CC BY 2.0

Rah-Rah for Retrofits

Posted on by The Progressive Policy Institute

We’ve heard a lot of doom and gloom on environmental topics recently, with progressives providing dark statistics about escalating carbon levels and conservative rebutting with stormy predictions of economic eclipse.

But Earth Day is supposed to be a feel-good day. And, as Thomas Friedman argued yesterday, when you start winning, everything becomes easier. That’s why President Obama’s victory on health care helped led National Security Advisor Jim Jones’ to declare that “America is back” on the world stage.

So it’s fitting that Vice President Joe Biden yesterday announced just under a half-billion dollars worth of stimulus monies for efficiency retrofits. In a little over a year, the administration has won a surprising number of victories in the push to mine “negawatts” through efficiency. Where we were slouching toward disaster through the laissez-faire, do-nothing inertia of the prior administration, we are now plowing toward a brighter, cleaner horizon.

Among other highlights, Biden announced that $20 million will be distributed to cities in the southeastern states of Alabama, Florida, Georgia, North Carolina, Louisiana, South Carolina, Tennessee and Virginia to dramatically increase the effectiveness of retrofits across the region. The new programs will use a pay-for-performance approach to finance affordable, accessible programs for both small and large residential, commercial and public buildings. But that’s just one of dozens of programs spread through Boulder to Camden, Cincinnati to Seattle.

What’s not to like? These projects pay for themselves. They work with local and state governments to quickly upgrade buildings. They employ local workers and are the quintessence of “shovel-ready.” And perhaps most importantly, they showcase in very public ways the powerful nexus of public works and progressive policy. These are wins — and, hopefully, preludes to victory this summer, as the administration and Congress turn to the effort to price carbon.

Plan B for Climate Policy?: A PPI Series

Posted on by The Progressive Policy Institute

PPI has long been a proponent of an economy-wide cap-and-trade system to confront the problem of climate change. But as the fortunes of cap-and-trade legislation in the Senate fade, we need to begin looking at other options before Congress. In the first post of this series, we looked at the Cantwell-Collins “cap-and-dividend” bill. This post examines the Carper-Alexander “3P” plan introduced this February, a bill that regulates only non-greenhouse-gas pollutants that some have suggested could be expanded into an electric-sector carbon cap-and-trade plan.

In early February, Sens. Tom Carper (D-DE) and Lamar Alexander (R-TN) introduced what we will call the “3P” (P for pollutant) bill, which tightens emissions of SO2, NOx and mercury from coal and oil-fired power plants through cap-and-trade markets. While the bill covers only non-greenhouse-gas pollutants, it has been discussed as a possible template for a climate bill targeting the electricity sector — or “4P.”

Carper-Alexander is nothing radically new. Considering how knowledgeable the American public is about cap-and-trade in general, it’s a safe bet to say most people don’t know that there is already a cap-and-trade market working to reduce air pollution from fossil fuel-fired power plants in the U.S. as we speak.

If you’ve ever had any discussions about market solutions to pollution problems, then chances are you’ve heard about the 1990 amendments to the Clean Air Act, which established a pollution reduction market to address acid rain in the Northeast. Specifically, it created a cap-and-trade market for sulfur dioxide (SO2: primarily responsible for acid rain, not a greenhouse gas) and nitrogen oxides (NO and NO2, both commonly labeled NOx: harmful to humans, primary precursor to ground-level ozone, which is a greenhouse gas) for the eastern half of the country. Since its inception in 1990, it has impressively reduced acid rain problems at much lower costs than initially predicted. It is the example advocates and economists point to when discussing how cap-and-trade can help control greenhouse gas emissions. This program was further strengthened in 2005 when the Environmental Protection Agency (EPA) issued the Clean Air Interstate Rule (CAIR), which established permanent caps and aggressive reductions for SO2 and NOx emissions beyond the Clean Air Act.

Designed to protect human health, CAIR is in poor health itself. A D.C. Circuit Court in 2008 found it failed to follow Clean Air Act statutory mandates and vacated the rule. The court then reinstated it under the stipulation that the EPA make some significant changes. The EPA is currently retooling CAIR to bring it in line with the court ruling. Just like with carbon emissions, however, it would be nice if Congress stepped up to the plate and made a law that clearly told the EPA how to administer these regulations. Unlike on carbon emissions, there’s a chance Congress can act relatively quickly.

The Basics

The Carper-Alexander bill sets a 3.5 million ton cap for a national market of SO2 emissions in 2012, then ratchets it down to two million tons in 2015 and 1.5 million tons in 2018, an 80 percent reduction of 2008 emissions. This final limit would remain unless after 2021 the EPA finds a lower cap is needed to protect public health.

The NOx market would operate slightly differently, as the country would be split into two zones, with the eastern states and western states each getting their own NOx market. The eastern market will face a cap of 1.39 million tons in 2012, which will tighten to 1.3 million tons by 2020. The western market will be capped at 510,000 tons in 2012, cranking down to 320,000 ton by 2020. When combined, the two markets will reduce NOx emissions from 2008 levels by 53 percent. The bill calls for mercury to be reduced by 90 percent by 2015, but it is not regulated in a market. Rather, the bill sets a cap for mercury (no trading) and leaves it to the EPA to promulgate the program rules.

A 4P bill could be very similar to the 3P proposal. Likely, the bill would establish a single market for CO2 emissions from power plants with reduction goals for future years, likely extending out to 2020. The bill could possibly call for New Source Performance Standards on all four pollutants for new plants. It might also include offset provisions for CO2 production. This legislative approach could be appealing if a more comprehensive proposal fails to gain support in the Senate and legislators begin to look for smaller-scale, more piecemeal approaches to emissions reduction.

The Good

The 3P bill takes aggressive action to reduce harmful air pollutants that derive from the combustion of fossil fuels, namely coal and oil, for electricity generation. Even though it targets only non-greenhouse gas pollutants, 3P could actually lead to indirect climate change benefits. While pollutants capped under the bill can be lowered through the use of filters and other technologies, a 3P scheme could also spur plant upgrades, the retirement of older (and dirtier) plants, and fuel-switching to less carbon-intensive sources, including natural gas, renewables, nuclear and hydropower — all of which would lead to lower carbon emissions. By successfully applying a cap-and-trade system for mitigating environmental damages, 3P also reinforces the notion that these systems can work in the real world without harming the economy.

Furthermore, 3P saves the EPA from legal limbo by clearly establishing the reduction goals for SO2, NOx and mercury emissions over the next 10 years and providing clarity for both firms and regulators. The bill also seems politically innocuous — even infamous climate change denier Sen. Jim Inhofe has said vaguely positive things about it. If the Obama administration goes looking for a bipartisan win on the environmental front, it may look to push the 3P.

The Bad

As already mentioned, 3P is not a climate bill, though it may have some indirect climate benefits. But even a 4P climate bill would be less than ideal. If CO2 were added to the 3P’s list of targeted pollutants, the bill would still fall short as it would regulate only the electricity sector — transportation, manufacturing and other carbon-emitting sectors would evade regulation. Electricity generation accounts for roughly one-third of total greenhouse gas emissions in the U.S., meaning that a 4P bill would still be far less preferable than an economy-wide cap-and-trade system.

Additionally, were a 4P bill to be structured similarly to the current 3P bill, it would give a great deal of authority for market design and administration to the EPA as CO2 would technically be regulated under the Clean Air Act. Regardless of your opinion about the EPA’s ability to properly administer a massive emissions market, it’s a political sticking point, as highlighted by current proposals to strip EPA of its authority to regulate greenhouse gases.

The Upshot

The 3P bill could provide a viable pathway for carbon regulation of the electricity sector. If the highly anticipated tri-partisan climate bill from Sens. John Kerry (D-MA), Joe Lieberman (I-CT) and Lindsey Graham (R-S.C.) does not create the kind of momentum for climate and energy legislation the authors are hoping for (more on that in the next entry), one option could be for the Senate to take a more piecemeal, sector-by-sector approach, in which a 4P bill (SO2, NOx, mercury and CO2) moves forward.

Both Carper and Alexander have sponsored carbon emissions legislation specific to electricity generation in past sessions of Congress. Both those bills called for electricity-specific cap-and-trade markets to reduce carbon emissions. Carper has signaled he’s open to incorporating his bill into a broader climate bill, though it’s unclear if he meant including CO2 in the structure of his bill or working the SO2, NOx and mercury caps into another piece of legislation.

The Carper-Alexander bill provides a simple structure, and clarifies existing regulations within EPA. It would not be an ideal approach to emissions reduction, but if all else fails, it could provide a workable jumpstart. The Clean Act Air showed that cap-and-trade can work once before, and it might have a chance to do it again.

Photo credit: https://www.flickr.com/photos/emmajg/ / CC BY-NC-SA 2.0

Cheat Sheet for Climate Policy: Part I – What’s Essential for a Good Climate Bill

Posted on by The Progressive Policy Institute

How to tell a good climate bill from a bad one? This series will guide you through the main issues that are likely to arise in the coming weeks as the Senate takes on climate change. In this post, we identify the essential ideas that need to be enshrined in any climate bill. These are the provisions that no good climate policy can do without. (To read the other posts in the series, click here.)

With Sens. John Kerry (D-MA), Lindsey Graham (R-S.C.), and Joe Lieberman (I-CT) set to release their climate legislation next week, climate change seems poised to return to the top of the agenda in Washington. One lesson learned from the last big fight on the Hill — health care — is that things can get confusing and ugly quickly for non-expert observers when media attention shines a light on the congressional sausage factory. It becomes hard to keep issues and ideas straight, harder still to understand which are important, and the avalanche of political rhetoric can make it tempting to just tune out.

Our goal for this short series is to help you cut through the noise. These posts are intended to be a climate policy cheat sheet that will help you decode the discussions. The issues we’ll cover are not equally important — some, like a price on carbon, are integral to the success of any climate and energy policy. Others, like expanding oil drilling, are substantially less significant from a climate/emissions perspective, though perhaps more relevant from other angles (energy security, politics, etc.).

To make the relative importance of these issues clear, we’ve divided them into four categories of decreasing significance — the crucial, the merely important, the relatively minor and the distractions. We’ll summarize the issues in each of the four categories in different posts, starting today with the absolutely vital issues. These categories, we hope, will help you figure out whether something is relatively trivial, or if the farm is being given away in the course of the legislative debate.

We want to make it clear that these categories are based only on the policies’ impact on the key issue: reducing emissions as much as possible for the lowest cost. Other policy goals like economic equity, increased domestic energy production, energy security, etc. might all be important, but (at least in the context of climate policy debates) they’re subordinate to the primary aim of emissions reduction. We’ll mention these goals when one of the policies we discuss affects them, but they are not our focus. We also won’t spend much time discussing the relative levels of political support for different policies – we’ll leave the political commentary to others.

We’re sure that not all of you will agree with our judgment of the relative importance of these issues. That’s fine — encouraging and enabling quality debate on climate policy (look elsewhere for a science debate) is the entire point of the list.

Category I Issues: The Sine Qua Non of Climate Policy

#1: A price on carbon

As Nathan’s written here before, a climate policy without a price on carbon isn’t a serious one. Fossil fuels have deep roots in our economy, and only a carbon price can effectively reach all sources of greenhouse gas emissions. Just as important, no other policy can achieve reductions as efficiently as a carbon price can. The price mechanism forces firms to identify inefficiencies that generate excess greenhouse gas emissions, resulting in the cheapest emissions cuts.

A carbon price can come in one of two forms: either tax carbon emissions directly, or cap them and distribute a limited number of emissions allowances. While a carbon price is not the only policy that matters, it is the one that matters most by far. Anyone who tells you a carbon price is not the most important aspect of climate legislation, no matter how well-intentioned, is wrong.

No climate proposal from the Hill, and few media reports, however, will mention a carbon price. Instead, you’ll hear about cap-and-trade or, since that term has become politically unpalatable, any one of a number of rebrandings: “cap and dividend,” “creating a green economy,” “incentives-based mechanisms,” or something altogether new. If there’s one point worth making here, it’s this — none of these names matter very much, at least substantively. They serve a political purpose, not a policy purpose.

By far the most important question to ask is whether a rebranded proposal puts a price on carbon or not. Is there a cap on emissions and allowances or permits that emitters can trade? Is there a single price (whether it’s called a tax or not) on carbon emissions? If there is, the rest of the proposal is secondary (the details of which may or may not be important). If not, it’s not an honest climate policy.

#2: Breadth of coverage—how much carbon gets priced?

A related issue is how much of U.S. carbon emissions a price mechanism covers. A tax or cap-and-trade system could cover the entire economy, or just one or more sectors. Generally speaking, the broader the coverage of a single emissions market, the greater the possible emissions reductions and the lower the cost per unit of emissions reduction. In other words, broader markets are better. There is some indication that the Kerry-Graham-Lieberman proposal will have an energy-sector only cap, with other measures used to reduce emissions elsewhere. This is useful, but not as good as an economy-wide cap.

A useful rough rule of thumb is that electricity-sector emissions are a third of total U.S. emissions, transportation-sector emissions are another third, and everything else (industry, agriculture, etc.) comprises the remaining third. Since it’s hard to measure emissions from some sectors (like agriculture), a program that includes all U.S. emissions isn’t practical. But including electricity, transportation and industry is feasible and can cover approximately 85 percent of all U.S. greenhouse gas emissions. Policies that cover these sectors are better than those that don’t, and policies that have the same price mechanisms for all three are best of all.

#3: Emissions reduction targets — setting the cap

Setting a price on carbon is critical, but it’s only a means to an end. The goal, of course, is to reduce greenhouse gas (primarily CO2) emissions and limit environmental damages. Once you know that a proposal is a serious one (because it includes a price on carbon), your next question should be how much that policy will reduce emissions. In short, what’s the target?

For a cap-and-trade system, knowing the target is easy: it’s the cap. The concept is pretty simple: set a finite number of emissions allowances and distribute them to actors in the economy in the first year of the program. In each succeeding year, lower the number of allowances available until you reach a desired level of emissions.

For a carbon tax, figuring out emissions reductions is a little more complicated. A rising tax produces similar results as a tightening cap, but you trade emissions certainty (you don’t know exactly how much reduction you’ll get, unlike with cap-and-trade) for price certainty (emitters know exactly how much it will cost for them to emit greenhouse gases). With a cap, it’s the opposite – we know exactly how much we’ll get in reductions, but the market for allowances will determine the price.

More often than not, the first thing highlighted about a new climate proposal are the reduction targets, especially the near-term targets. From an environmental perspective, however, the more important issue is cumulative emissions, not emissions at any point in time. That’s because CO2 and other greenhouse gases are stock pollutants — they accumulate over time. It doesn’t necessarily matter if high or low volumes are released at certain times, just what those volumes add up to over the course of the regulation.

The current global benchmark, to which U.S. action will contribute, is to reach an emissions path that keeps average temperature rises to 2 degrees Celsius. For climate legislation, what matters is the general path of emissions, not necessarily the specific reductions in 2020 or 2040. As we’ll explain in our next post, specific market regulations will determine the exact emissions in any given year, but the market needs a path to follow, which is determined by the lowering cap (or increasing tax). There’s no way to guarantee some set percentage reductions in any year without a direct mandate, which would be extremely costly and restrictive. When you hear lawmakers railing about how 20 percent reductions from 2005 levels in 2020 are unreasonable but 14 percent cuts are attainable, know that they are having a political discussion, not a policy one.

In short, the exact percent emissions targets don’t matter too much year to year. Instead of worrying about whether the goal is to reduce greenhouse gas output by 17 percent or 20 percent in 2020, worry about the trajectory of emissions reduction over the lifetime of the regulation. The long-term outlook is much more important than the short-term benchmarks. Unfortunately, finding out what this long-term outlook is can be hard. It’s a failure of policy leaders and the media that short-term single-year targets are widely publicized while the effect of a given policy on the future stock of greenhouse gases in the atmosphere is rarely discussed.

The Bottom Line

These issues — a carbon price, its reach and the emissions target — are by far the most important parts of a climate proposal. The first questions you should ask of any such proposal are:

  1. Does it create a price on carbon?
  2. How much of U.S. emissions are covered by that price?
  3. What is the path of emissions reduction set by the cap?

The answers to these questions are the most critical to designing effective climate policy. Other things are important, too, as we’ll describe in our next post, but don’t let them distract you. If you care about climate change, keep your eyes on these three ideas.

Photo credit: https://www.flickr.com/photos/evenprimes/ / CC BY-NC-ND 2.0

Update: This item has been corrected.

Earth Day at 40: Can Obama Outperform Nixon?

Posted on by The Progressive Policy Institute

Today is the 40th anniversary of Earth Day, the first of which took place in 1970 at the beginning of the golden age of environmental legislation in the United States. It’s a telling statement that in the past four decades, the most successful environmental record belongs to Richard Nixon.

Our most disgraced president looks rather hippie-esque when you look at the achievements that passed during his administration: the National Environmental Policy Act, the Clean Air Act, the Clean Water Act, the Marine Mammals Act, the Safe Drinking Water Act and the Endangered Species Act all became law under his watch, and he established the Environmental Protection Agency (EPA) soon after Earth Day One.

Since then, environmental policy has often meandered from favored conservative punching bag to a second-tier issue. President Barack Obama has a chance to cement a similar environmental legacy by acting on climate, energy and natural conservation legislation. How has he done so far? In his first term in office, President Obama has achieved notable environmental progress by simply not being President Bush.

Following arguably the most anti-environment administration since the 1970s, almost anyone would shine in comparison. Like on many other fronts, Obama does not lack for ambition. He included energy as one of his three top priorities during the 2008 campaign and has signaled that it will be getting his attention very soon. That being said, the Obama administration has not yet established an impressive or even cohesive environmental record. Many of the president’s actions have been piecemeal, either addressing specific policy problems or cleaning some of the messes left over from the previous eight years. He has yet to achieve a stout victory on the environmental front, but it has only been one year. He still has time to work.

Below is a list of the top five environmental actions that occurred in the first year of the Obama administration – and five other items on which he needs to do more work:

The Accomplishments

  • Endangerment finding: This finding, which said that carbon dioxide is a pollutant that endangers human health, gave the EPA authority to regulate it under the Clean Air Act. This is the most significant step toward reducing greenhouse gas emissions the U.S. government has yet taken.
  • CAFE standards: The EPA increased average fuel economy standards for cars and trucks in the U.S. fleet to be 35 mpg in 2020, the first increase since 1990. The regulation is estimated to reduce greenhouse gas emissions by 960 million metric tons by 2030.
  • The stimulus package: The American Reinvestment and Recovery Act channeled $8 billion toward energy projects, mainly focusing on renewables and energy efficiency. It included another $6 billion in water and wastewater projects.
  • Copenhagen: Simply put, international climate negotiations would have collapsed were it not for the direct personal involvement of the president. He was instrumental in getting almost every country in attendance to commit to two-degree temperature rise targets, helped get important concessions from China on emissions monitoring and established long-term financing ($100 billion annually by 2020, $20 billion for the U.S.) for international adaptation efforts.
  • Executive appointments: Lisa Jackson at EPA. Steven Chu at Department of Energy. Nancy Sutley at Council on Environmental Quality. Ken Salazar at Department of Interior. John Holdren at the White House Office of Science and Technology Policy. Jane Lubchenco at National Oceanic and Atmospheric Administration. Carol Browner as special adviser to the president on energy and climate change issues. These are all smart, competent, committed people who will help the president shape effective environmental policies over the course of his administration.

So what can Obama do for the environment in 2010 and the second half of his term? Here are just a few things:

The To-Do List

  • Climate: Above all, the president should push Congress hard to pass legislation that controls greenhouse gases by setting a price on carbon. The president already has a climate bill, Waxman-Markey, that had passed the House last year and was ready to go to the Senate. Instead of pushing this bill, he and the Senate leadership chose to focus on health care. That process consumed the heart of this Congress’ legislative calendar and much of its political energy. While that choice was understandable, it leaves action on climate and energy as the largest unfulfilled element of the president’s legislative agenda.Debates on climate appear set to start again in the Senate with the release of a new bill next week. The president should push the debate forward, hopefully resulting in a new law that sets economy-wide greenhouse gas controls before the November elections. This is admittedly an ambitious goal. If it proves impossible, Obama should dedicate as much energy in the second half of his term to climate as he did to health care in the first.
  • Air pollution: With so much focus on climate, traditional forms of pollution haven’t drawn much attention. Conventional pollutants like sulfur dioxide, nitrous oxides, mercury and ozone still pose significant health risks, and economists believe reducing emissions of these pollutants would result in substantial net benefits to the economy in life expectancy and quality of life. The EPA’s recent attempts to tighten regulations on these pollutants (both of which, it must be said, were authored by the Bush EPA) were struck down by courts. The Obama EPA should renew efforts to regulate these pollutants by issuing new versions of these rules (called CAIR and CAMR) as soon as possible. The president should throw his support behind proposed “3-pollutant” legislation on the Hill that would remove the legal barriers to stricter regulation of these pollutants, and follow that legislation up with action from the EPA. (More on that bill in a later post.)
  • Nuclear waste storage: The president has thrown his support behind nuclear power with $8 billion in loan guarantees for two new plants in Georgia. Regardless of your opinion of nuclear power as an energy source, you have to admit the storage of waste poses quite a problem. The president eliminated Yucca Mountain, the long-controversial water repository in Nevada, without proposing a specific alternative. He organized a blue-ribbon panel to look into solutions to the nuclear waste problem, and the commission is supposed to issue its recommendations sometime next year. They have their work cut out for them.
  • Environmental foreign policy: The president should also consider making environmental issues a more central part of his foreign policy. Whether it’s pushing China, India, Russia and others to agree to global cuts in carbon emissions, or calling Japan out for its cynical efforts to avoid limits on bluefin tuna fishing, ample opportunities exist for advancing U.S. environmental interests internationally and re-establishing our position as the global leader on environmental policy innovation. The president has made a good start in this area, but he can do more.
  • Future environmental dangers: Finally, the president can move beyond environmental issues that have been neglected in the past to examining possible future environmental risks. Many such risks, such as pollution of water with pharmaceuticals and the environmental impacts of nanotechnology, aren’t sufficiently understood. Government also lacks the tools to deal with these issues even if they are identified as dangers. The president should dedicate resources to investigating these and other future risks, and push Congress to give the EPA authority to regulate them when supported by the science. These are the kinds of forward-looking reforms that Nixon pursued, and which could give Obama an enduring environmental legacy.

Success on these fronts — and above all on climate — would not only fulfill President Obama’s environmental promises, but would put him in contention as the most environmentally successful president since Nixon, and likely ever.

As the Earth Turns: How Environmentalism Has Evolved

Posted on by The Progressive Policy Institute

When Earth Day was first celebrated 40 years ago today, environmental distress was in our face. Rivers caught fire, oil spills fouled U.S. shores, toxic waste dumps proliferated, and Los Angeles seemed permanently wreathed in smog. Now we worry more about things we don’t see — runoff and waste from farms, growing carbon concentrations in the atmosphere, fish disappearing from the oceans.

This change underscores both the successes and the limits of the “first generation” of environmental law and regulation. Starting with the landmark Clean Air Act of 1970, Americans for the first time began to grapple seriously with the environmental havoc wrought by the industrial revolution.

We’ve made undeniable progress since then, as Gregg Easterbrook and other writers have documented. Our air and water are cleaner. This would be a good day, in fact, for environmentalists and their business antagonists not to indulge in the usual doomsday talk. What we’ve learned since the first Earth Day is that ecological calamity isn’t inevitable, that the damage we do to nature is often reversible, and that we can curb pollution without wrecking our economy.

Republicans still cling to the myth that a clean environment is a luxury we can’t afford, hence their refusal to take climate change seriously. And some environmental activists evidently believe that alarmism in the defense of ecological health is no vice. If the idea is to shake Americans out of their “denial” about global warming, the opposite seems to be happening. Polls show the public is growing more skeptical about the hazards of climate change. Allegations (unfounded, as it turns out) that British university researchers cooked climate data in an excess of environmental correctness haven’t helped.

Even discounting for some hyperbole, however, the new environmental challenges are real enough. Unlike the great industrial cleanup, which focused on specific “point sources” of pollution like smokestacks and drainage pipes, we’re faced today with damage from “non-point” sources like fields and hog farms, high-tech fishing fleets and the millions of cars, dry cleaners, lawnmowers and even cows pumping carbon and other greenhouse gases into the atmosphere.

The top-down, “command and control” regulations of the first generation of environment activism could not cope effectively with these new problems. That’s why PPI back in the 1990s started advocating a “second generation” of policy tools for dealing with new and more diffuse ecological challenges. Examples include innovations like the Toxic Release Inventory, which allows citizens to find out about health risks posed by local polluters; market incentives like carbon pricing and the cap-and-trade system first set up in 1990 to combat acid rain; and “civic environmentalism,” which decentralizes decisions about, say, how to manage habitat vital to endangered species, from Washington regulators to local landowners.

Now it appears as though we’re heading into a third phase, in which environmental and energy policy merge into one. The environmental movement traditionally has aimed at mitigating the impact of industrial society on nature. Now we’re talking about something truly revolutionary – a shift from a dirty economy powered by cheap fossil fuels to a clean, low-carbon economy. This prospect beckons not only because of the environmental benefits, which would be large, but also because of the potential for immense economic and security gains. It would enable the United States to reduce its costly dependence on foreign oil suppliers, many of whom don’t have our best interests at heart. And it opens up broad new avenues for economic innovation and growth in the development of clean technology and fuels.

Some will use Earth Day to depict America as an energy wastrel and despoiler of the earth. Instead of donning hair shirts, progressives ought to stress America’s opportunity to lead the world toward its clean energy future.

Photo credit: https://www.flickr.com/photos/thomas-merton/ / CC BY-NC-SA 2.0

Dark Horses

Posted on by The Progressive Policy Institute

On Monday I reported on an exchange I had with RealClearPolitics’ Jay Cost on my contention that the political landscape is likely to get a lot rockier for Republicans in 2012, no matter how well they do this November.

I don’t want to keep this exchange going perpetually, but Jay’s last update raises two issues that I want to mention before turning the page. First, he quite rightly argues that the governing record of the Obama administration, and the policy and message response of the GOP, could have at least as large an impact on 2012 as the demographic factors I stressed in my original piece. No question that is true, and that’s the sort of thing I write about nearly every day. But I don’t get the sense that Republicans are paying much attention to the changes in landscape that are going to occur semi-automatically as we move from a midterm to a presidential cycle — changes that will complicate every step they take. And that was the main point of my Salon article, which was by no means some sort of definitive personal manifesto on everything related to the 2012 elections.

But Cost makes an argument on another question where I am much less inclined to agree with him: How likely it is that a “dark horse” will emerge in 2012 to revolutionize the Republican presidential field? Sure, again, anything’s possible, particularly this far from Election Day 2012. But as I observed in my original piece, presidential campaigns these days almost have to develop long in advance, particularly for “dark horses” who have to establish name ID, raise a lot of money, and then perform the ritual of semi-residence in early primary and caucus states. (I suspect there may be some understandable confusion on Jay’s part based on the assumption that I was arguing that various “dark horse” candidates would be poor general election candidates, but my main contention was that Republicans had a weak field of leading candidates, and that none of the dark horses had the chops to get the nomination).

Jay thinks my lukewarm assessment of lesser-known potential Republican presidential candidates like John Thune, Mitch Daniels, Mike Pence and Tim Pawlenty is just a matter of partisan bias. He even makes the (to me) astonishing statement that Thune’s appeal is no more superficial than Barack Obama’s in 2008 (which I’d say reflects more than a little partisan bias). So let’s think about what makes a “dark horse” candidate formidable, at a time when there are no kingmakers to pluck a Warren Harding out of obscurity and lift him to the nomination. I’d say the minimum qualifications are one if not more than one of the following qualities: exceptional public renown; special identification with a major cause or new ideology; a particular appeal to important and previously underrepresented constituencies; a remarkable public personality; or a novel approach to presidential candidacy. To some extent, dark horses these days, unless they just get lucky, need a candidacy that is in some respect historic. Giant fountains of money also help, though none of the people being “mentioned” as dark horses in 2012 are named Michael Bloomberg. Geography can matter, too, but that’s usually not dispositive unless a candidate’s geographical origins are somehow “historic” or unique.

So let’s look at Cost’s list of potentially formidable 2012 dark horses with those criteria in mind. John Thune is a minor legend in Republican insider circles because he narrowly won a GOTV-driven slugfest in the heavily Republican state of South Dakota in 2004, thus beating Senate Minority Leader Tom Daschle. This was a testament to Thune’s personal attractivenss, durability, and willingness to toe the party line, but these are not typically the qualities that vault someone from obscurity to a presidential nomination. So far as I can tell, he is not particularly known for any policy positions, issues, or personification of any underrepresented constituency group or geographical grouping. Yes, he is broadly acceptable to every major element of the GOP, but “acceptability” is a quality that matters only when one is no longer a dark horse, and in any event, who isn’t “acceptable” in these days of monochromatic conservative uniformity in the GOP? That is also the problem of Indiana Rep. Mike Pence, were he to run for president. He’s a guy beloved of movement conservative types for representing the movement conservative point-of-view in the House GOP Caucus. But are self-conscious “movement conservatives” really a voting faction in the GOP nominating process, and are they so aggrieved by the rest of the field that they will coalesece around Pence? There’s no particular reason to think so.

Mitch Daniels is another insider heart-throb, in no small part because he was a major Washington figure as OMB Director under Bush 43, and then successfully took his act mainstream by being elected and then re-elected governor of a usually Republican state where Republican statewide candidates have often struggled. I can see the argument that Daniels’ resume equips him to become the symbol of the suddenly preeminent conservative issue of fiscal discipline (though oppo researchers would have great sport with his responsibility for Bush budget deficits). But again: is that a quality that so separates him from the field that he can make it his own? And does he have other personal or representational characteristics that could give him the rock-star aura to come out of national obscurity, and, say, win the Iowa Caucuses? Maybe, but the evidence of that isn’t obvious.

And then there’s Tim Paw, and it is true that he coined a very interesting and serviceable slogan in talking about “Sam’s Club Republicans.” It is also true, as Jay notes, that Reihan Salam and Ross Douthat turned that slogan into a pretty unorthodox agenda for the GOP–so unorthodox, in fact, that it was generally rejected or ignored by conservatives, aside from its very orthodox endorsement of tax subsidies for marriage and child-bearing. But that has little or nothing to do with Pawlenty, who has been conventionally conservative in his proto-presidential campaign, and whose Big Idea seems to be the ancient and completely symbolic chesnut of a balanced budget constitutional amendment.

Is there anything about these putative “dark horses” that makes any of them particularly stand out, other than as “acceptable” alternatives to the front-runners if one of them happens to get a one-on-one contest? I don’t see it. And there’s certainly nothing about any of them that is comparable to the Democratic “dark horses” that Jay Cost cites in his own piece: John Kennedy, Jimmy Carter, Bill Clinton and Barack Obama. Kennedy was the first serious Catholic candidate for president since Al Smith; Carter was the first serious Deep South candidate since the Civil War; Clinton ran aggressively against the pieties of his own party; and Obama became a huge national celebrity as a state senator and went on to beat a legendary Democrat in virtually all-white Iowa.

Until someone emerges on the fringes of the Republican presidential field who can truly separate him- or herself from the field, anyone is entitled to some serious skepticism about the faith of many Republicans that they’ll wind up with a presidential candidate who doesn’t share the handicaps of the established field.

As for the weakness of that established field, check out Nate Silver’s 538.com post that comments on my exchange with Jay Cost and offers some objective evidence that the elephants running in 2012 don’t quite match the donkeys who ran in 2008.

This item is cross-posted at The Democratic Strategist.

Four Things Obama Needs to Do in the Middle East

Posted on by The Progressive Policy Institute

In a recent piece, I discussed the growing sense of “Bush nostalgia” among Arab reformers. Such nostalgia has less to do with George W. Bush and more to do with the period of democratic promise the Middle East experienced in 2004-5, partly a result of aggressive, but short-lived, efforts to put pressure on authoritarian regimes.

For its part, the Obama administration has shown little real interest in democratization in the Arab world, falling back on the “pragmatic” neo-realism of the Clinton and first Bush administrations. Compared to the destructive policies of his predecessor, President Obama’s approach seems a breath of fresh air. But his foreign policy vision, while certainly sensible, has so far been remarkably conventional and unimaginative. Perhaps that’s what was initially needed. Now, however, is the time for bolder, more creative policy making. Here are four things Obama can – and should – do in the Middle East to advance U.S. interests and ideals:

  • Recognize the region’s changing balance of power. Traditional allies like Egypt and Jordan (two of the world’s largest U.S. aid recipients) are losing influence. Increasingly authoritarian, erratic and perceived as excessively pro-American, they have little credibility with Arab audiences. On the other hand, emerging powers like Turkey and Qatar are pursuing independent foreign policies and maintaining positive relations with both the West and the “rejectionist” camp (Iran, Syria, Hamas and Hezbollah). Not surprisingly, both countries, seen as “honest brokers,” have played a major role in mediating regional conflicts and supporting dialogue efforts, including on the Syrian-Israeli, Israeli-Palestinian, Hamas-Fatah and internal Lebanese tracks. The U.S. should encourage their efforts, keeping in mind that they may be uniquely well-positioned to exert influence on Iran and Syria.
  • Promote Turkish accession to the EU. Turkey is the closest thing the Middle East has to a “model,” one of only two countries in the world led by a democratically elected Islamist party. According to a 2009 survey, 64 percent of Arab respondents in seven countries believe “Turkey’s EU membership prospects make Turkey an attractive partner for reform in the Arab world.” Considering its growing regional importance, the U.S. cannot afford for Turkey to turn inward and become embroiled in conflict between its secularist military and Islamist-leaning government. For a time, Turkey’s desire to join the EU provided incentives to implement wide-ranging legal and political reforms. However, as the EU drags its feet on accession talks, and Turks lose hope in EU membership, the reform process looks less encouraging than ever. Turkey must, however, remain enmeshed in Western institutions and partnerships. The Obama administration should use its leverage with European allies to ensure the accession process moves forward.
  • Begin strategic engagement with nonviolent Islamist groups. In most Arab countries, Islamist groups, such as the Muslim Brotherhood in Egypt, Jordan and Syria, are the largest, most influential opposition groups. But Obama has so far failed to engage them, despite his emphasis on “dialogue” with diverse actors. Engagement would serve several purposes, discussed in detail here, including information-gathering, improving our credibility with Arab publics and putting pressure on autocratic regimes to open up. Secretary of State Hillary Clinton, or another senior official, could begin by giving a major speech on the U.S. and political Islam (something which the Clinton administration did on several occasions), stating unequivocally that the U.S. will accept democratic outcomes, even if that means the election of Islamist parties. The State Department should also issue a directive explicitly permitting State Department employees, including ambassadors in the region, to meet with and incorporate members of Islamist organizations in their programming.
  • Embrace “positive conditionality.” The U.S. gives hundreds of millions of dollars annually to Arab authoritarian regimes. Rather than cutting aid, which is unlikely to be politically viable, the U.S. could offer large packages in additional assistance, conditioned on meeting a series of explicit benchmarks on democratization. If the country failed to meet these benchmarks, the aid would be withheld and carried over to a reform “endowment” for the next fiscal year. This way, the more governments rejected the aid, the greater the incentive would be to accept it in future years.

None of these four “steps” are particularly revolutionary. But that’s the point: the Obama administration could take action immediately – if it had the political will. With the troop drawdown in Iraq, and the Iranian nuclear threat, there may be a temptation to wait for a better time. But, in the Middle East, the better time, sadly, never seems to come.

If anything, a confluence of factors appears to be converging, suggesting the time to act is now. There are critical elections in Egypt and Jordan coming up in 2010 (and 2011). For the first time in Egypt, there is an inspiring national figure, Mohamed ElBaradei, who seems capable of uniting a notoriously fractious opposition behind a common vision for reform. Egypt, along with Algeria and Tunisia, will be facing succession struggles sooner rather than later. Meanwhile, internal tensions in Turkey seem to be rising, with the threat of escalation looming in the background. In other words, this is a difficult time of transition in the Middle East and the U.S. will need to do considerably more than just tread water.

The views expressed in this piece do not necessarily reflect those of the Progressive Policy Institute.

The Bridge We Are Still Crossing

Posted on by The Progressive Policy Institute

Few subjects create as much controversy as that of race, and that’s particularly true of any discussion of race and the 44th President of the United States. So it’s of considerable interest that the ever-estimable David Remnick, editor of The New Yorker, has penned a new biography of Barack Obama, entitled The Bridge, that is focused primarily on Obama’s role as a major figure in the history of American race relations.

For those interested in this topic, I’ve written a pretty lengthy review of Remnick’s book for the Washington Monthly. I conclude that the racial conflicts raised and addressed by Obama’s rise to the White House remain, unfortunately, relevant to his presidency. I’m sure my review will eventually be added to the long list of material that conservatives object to as raising what they call “the race card.” Too bad.

Sources of the Rasmussen “House Effect”

Posted on by The Progressive Policy Institute

If you are a progressive political junkie, odds are that one of the most depressing features of your week is the release of new polls from Scott Rasmussen. By and large, the ubiquitous robo-calling firm yields results that are more encouraging to Republicans than others (e.g., the big advantage it shows for the GOP in the generic congressional ballot), and the sheer weight of its state polling can be mind-numbing and spirit-sapping.

It’s generally been thought that this “house effect” of Rasmussen polls is the result of the early and stringent use of “likely voter” screens, which tend to produce a more conservative electorate. According to that theory, the “house effect” would be reduced as we get closer to election day and people make up their minds whether or not they are going to vote (this also accords with Rasmussen’s good record of final-days accuracy in recent elections).

But Nate Silver, as is his habit, takes a closer look at Rasmussen’s operations, and reaches a different conclusion: the raw sample Rasmussen uses before applying a “likely voter” screen seems to bear a “house effect” as well:

Although Rasmussen rarely reveals results for its entire adult sample, rather than that of likely voters, there is one notable exception: its monthly tracking of partisan identification, for which it publishes its results among all adults. Since Labor Day, Rasmussen polls have shown Democrats with a 3.7-point identification advantage among all adults, on average. This is the smallest margin for the Democrats among any of 16 pollsters who have published results on this question, who instead show a Democratic advantage ranging from 5.2 to 13.0 points, with an average of 9.6.

Why would that happen? Nate doesn’t suggest any deliberate bias by Rasmussen; but the firm does use polling techniques that tend to skew the sample:

Raw polling data is pretty dirty. If you just call people up and see who answers the phone, you will tend to get too many women, too many old people, and too many white people. This is especially the case if you rely on a landline sample without a supplement of cellphone voters.Pollsters try to correct for these deficiencies in a variety of ways. They may use household selection procedures (for instance, asking to speak with the person who has the next birthday). They may leave their poll in the field for several days, calling back when they do not contact their desired respondent. An increasing number may call cellphones in addition to landlines.

Rasmussen does not appear to do any of these things. Their polls are in the field for only one night, leaving little or no time for callbacks. They do not call cellphones. They do not appear to use within-household selection procedures. In addition, their polls use an automated script rather than a live interviewer, which tends to be associated with a lower response rate and which might exacerbate these problems. So Rasmussen’s raw data is likely dirtier than most.

Add in the likelihood that Republican voters are a bit more enthusiastic about reporting their views to pollsters at present, and you can see how Rasmussen’s “house effect” could be baked right into the cake. But if that’s true, the assumption that Rasmussen’s numbers will get more reliable as we approach election day may be questionable as well. Silver thinks the Rasmussen “house effect” is a new development that has emerged during this election cycle. So, too, may be a pattern of inaccuracy unless the firm takes corrective action.

Thus, Democrats are not necessarily exhibiting their own biases by taking Rasmussen’s results with a large grain of salt or mentally shifting the numbers leftward a few points. That’s an inexact science, but so, too, is polling.

This item is cross-posted at The Democratic Strategist.

Will GOP Block Wall Street Fix?

Posted on by The Progressive Policy Institute

As the Senate turns to financial reform this week, the big question is whether any Republicans will join in, or whether the party will stick to its new political doctrine of Maximum Feasible Obstruction.

This doctrine is predicated on the idea that Barack Obama, elected with nearly 53 percent of the vote, is a dangerous radical bent on extinguishing American liberties and importing Euro-style social democracy. It’s an idea so crazy on its face that many progressives are convinced that racism must lurk behind it.

Maybe, but some conservatives also convinced themselves that Bill Clinton maintained a secret airport in Arkansas to import narcotics from Central America. The right’s feral attacks on Clinton led a sympathetic Toni Morrison to dub him in a figurative sense “America’s first black president.”

Whether or not race is a factor, Republicans have evidently calculated that there is no political cost in withholding cooperation from Obama, at least on domestic issues. That may have been true of health care, which lost public support as the debate wore on. But fixing Wall Street is another matter.

The Pew Center for Research reported yesterday that Americans overwhelmingly favor (by 61-31) reform of financial rules, even as they evince growing skepticism of government activism. It’s pretty clear the public takes a “never again” stance toward bailing out Wall Street bankers, speculators and bonus babies.

That’s why Mitch McConnell, the GOP Senate leader, latched onto the theme that the bill crafted by Sen. Chris Dodd (D-CT) would actually make future bailouts more likely. President Obama blasted that “cynical and deceptive assertion” over the weekend, and McConnell yesterday seemed to back down.

Still, Democrats need Republican votes to bring a bill to the floor. The Washington Post reports this morning that Democrats are targeting Sens. Olympia Snowe and Susan Collins of Maine and Bob Corker of Tennessee. Bucking his party’s sullenly oppositionist temper, Corker has worked constructively with Sen. Mark Warner (D-VA) to offer sensible improvements to the Dodd bill.

That bill is snagged on GOP opposition to a new regulatory body, to be independent but lodged in the Federal Reserve, that would protect consumers of credit cards, mortgages and other loans from deceptive or predatory practices. Dodd has signaled a willingness to compromise on another controversial provision, an industry-financed $50 billion fund to liquidate bankrupt firms. And the New York Times reports today financial sector lobbyists have lavished contributions on members of the Agriculture Committee, which is grappling with a key provision to regulate derivatives.

During the health care debate, Republicans did not appear to be moved by the plight of Americans with no medical insurance. But financial reform involves something Republicans traditionally care deeply about – money. Where are the sobersided conservatives of yesteryear, who understood that the safety and soundness of our financial system is fundamental to America’s economic health? Striking the right balance between regulation and innovation, security and risk, is an urgent national priority that ought to engage responsible leaders in both parties.

If Republicans aren’t willing to set aside reflexive partisanship long enough to stand up for American capitalism, we really are in a world of political hurt.

Photo credit: https://www.flickr.com/photos/epicharmus/ / CC BY 2.0

Khartoum Dispatch: Assessing the Sudan Elections

Posted on by The Progressive Policy Institute

 

Millions of Sudanese have just finished voting in their country’s first multiparty elections in 24 years. Election officials estimate that, in a relatively peaceful process, turnout of registered voters exceeded 70 percent nationwide, including up to 55 percent in one state in war-ravaged Darfur. (Final turnout figures had yet to be announced at the time of publication.) The voting period was extended from three to five days due to a host of technical problems and irregularities. Sometime this week, the National Election Commission will announce the results.

Yet despite the higher than expected estimated turnout, the election should hardly be a cause for celebration among advocates for democracy. At the top of the ballot, Sudanese leader and indicted war criminal Omar al-Bashir’s name appeared as his party’s candidate for president. Bashir took power via military coup in 1989. In the years since, his regime prosecuted a war in the south from 1989 through 2005 and, more notoriously, has conducted a deadly policy of mass murder and displacement in Darfur since 2003.

On the surface, the Bashir government has made all the right moves, urging all Sudanese parties to participate and asking the international community to observe the process. But the facts on the ground show a government that has engaged in political repression and intimidation, and an election that fell short of international standards. Citing the restrictive environment, in the last week of the campaign period leading opposition parties announced a general boycott of the elections. As the results from the election are counted up, one thing is clear: A “democratically elected” Bashir government will be no less ruthless and oppressive than the Bashir military dictatorship.

Yet since last fall, the Obama administration has avoided directly challenging the credibility of Sudan’s elections, despite being heavily engaged in mediation efforts across Sudan. Many analysts feel that the U.S. merely wants to get past the elections in order to focus on the critical referendum for south Sudan scheduled for January 2011 — a vote that many expect will lead to the south’s secession from Sudan. It’s an outcome that the U.S. favors, predicting that the south will be a reliable, oil-producing ally in restive East Africa. In a bid to set the table for next year, the administration has seemed ready to accept the legitimization of the Bashir regime in this month’s vote in exchange for his cooperation on the referendum.

But with the election’s legitimacy in tatters, President Obama must be clear that the election of Bashir will have no effect on how the U.S. views those in power in Khartoum — as an unrepresentative clique that refuses to loosen their firm grip on the country. And regardless of the results, the administration must continue to pressure all parties to bring comprehensive and durable peace to Darfur, implement the final stages of the north-south peace agreement that mandates the 2011 referendum, and carry on the long process of democratization that serves as the most solid foundation for durable peace.

The State of Play

The elections were first put in place with the 2005 signing of the Comprehensive Peace Agreement between Bashir’s National Congress Party (NCP) and the Sudan People’s Liberation Movement (SPLM). That ended a civil war — Africa’s longest running — which pitted the mainly Muslim north, controlled by the Bashir regime, and the Christian south, ruled by the SPLM. The agreement also called for a referendum in the south, scheduled for January 2011, which would determine whether Sudan would remain united or the south would secede.

Bashir and his regime entered the 2010 election season with its autocratic rule intact. At the helm of a one-party state for two decades, they retained complete control of the security and media sectors, and possessed far greater financial and organizational resources than the SPLM and opposition parties in the north. Control of Darfur also remained assured, while it was thought that southerners would care less about the elections than the referendum in 2011. Given these advantages, Bashir, at campaign rallies and in formal interviews, had built up the elections as a milestone for the country. “No one forced these elections on us,” Bashir recently stated. “We want fair elections, we want clean elections.”

Despite such favorable conditions, the NCP has not restrained the National Intelligence and Security Services and other elements of the state security apparatus from committing human rights violations. Student activists have been their primary targets. Members of Girifna — a youth organization whose name means “we are fed up” in Arabic — have used social media tools to relay their encounters with state security. The most gruesome incident involved the arrest, detention and torture of a member in March. While in custody, the security agents threatened him with a picture of a well-known Darfuri student activist whose mangled body had been discarded a month earlier near the University of Khartoum.

Human Rights Watch has documented these and other numerous cases of arrests, detention and intimidation of activists and opposition party members; harassment of journalists; breaking up and prevention of public gatherings; and censorship. In Darfur, home to almost 20 percent of the population, opposition parties and citizens also face these challenges, as well as the day-to-day security realities of a place far from peace. Candidates themselves, for instance, have been violently targeted by unknown assailants, while whole areas of the region remain off-limits to election monitors, United Nations/African Union peacekeepers and humanitarian organizations. According to the International Crisis Group, the NCP also had its eyes on rigging elections in Darfur to secure millions of much-needed votes in the three Darfur states. In a recent report, the group highlighted the systematic ways in which the NCP has manipulated the census, influenced the delineation of electoral districts, limited voter registration, and co-opted and bought the loyalties of traditional leaders.

It’s not just Bashir’s government. The SPLM has been accused of harassment and intimidation against smaller opposition parties in the south and independent candidates that broke away from the SPLM after not receiving the party’s nomination. Equally worrisome for southerners, the elections are taking place during a period in which they have already seen the worst violence since the end of the war in 2005. Last year alone, over 2,500 people died in inter-communal violence, and many civil society leaders and analysts in the south fear even greater violence ahead of the 2011 referendum.

The result of the political chaos was an election whose legitimacy was already in doubt before a ballot was cast. With a week left before the elections, the SPLM candidate for president suddenly announced he was withdrawing from the race on account of the unfair conditions and the ongoing crisis in Darfur. Other leading parties within the alliance also announced their formal boycott of the vote. No major political figures challenged Bashir, and many of the other parliamentary and state-level positions in the north went uncontested in last week’s ballot.

What’s at Stake

For Bashir — who remains wanted by the International Criminal Court on seven charges of war crimes and crimes against humanity for his government’s policies in Darfur — the elections are aimed at one objective: restoring legitimacy at home and abroad.

For the people of Sudan, the stakes could not be any higher. Where will the elections leave the Darfuri people? Over two million out of Darfur’s estimated seven million people live in displaced persons camps, while Darfur’s rebel movements continue to clash with Sudanese government forces in hot spots across the region. Millions in Darfur boycotted the registration period because they did not want their participation to bestow credibility on an election process that left them with few candidates on the ballot representing their interests. With a new mandate on power supported by the participation of Darfur in the elections, many Darfuris and Sudanese fear that the NCP will likely abandon the peace process and instead seek to gain greater control of Darfur through the state and national leaders “elected” to serve their interests.

As for the people of south Sudan, they retain the option to secede from a newly legitimized government in Khartoum with the referendum in 2011. Yet these elections have demonstrated that political space in south Sudan is also quite restrictive, with the arrest and intimidation of independent candidates and detention of election monitors. As Alex de Waal wrote, “As the endgame of the [Comprehensive Peace Agreement] is played out, the fundamental question facing Sudan may not be whether it is one nation or two, but whether it is governed or ungoverned. The ongoing decline of trust and legitimacy has created a situation in which staying in power is the only task that either of the two ruling parties can achieve.” An American endorsement of — or, at the very least, silence in the face of — illiberal and even brutal behavior by both Khartoum and Juba, the southern capital, could have unintended consequences for the future.

The chief concern among southerners is that Bashir may attempt to use his new government to obstruct the referendum process. Perhaps signaling postelection plans to stop secession by any means necessary, Bashir, on the last day of campaigning, revealed the results of what he claimed was a confidential poll of southern Sudanese. This survey, he said, found that 30 percent of southerners would opt for secession in the referendum scheduled for January 2011, while 40 percent would choose unity. These numbers contradict all other assessments of public opinion that consistently show overwhelming support for secession. Southerners fear how Bashir will interpret his mandate to govern them over the next eight months before the referendum.

Meanwhile, the millions of Sudanese living in the north may share similar fates to the people of Darfur. Communities in eastern Sudan and the so-called Three Areas (South Kordofan, Blue Nile and Abyei) have also suffered decades of Khartoum’s neglect and oppression. Keeping the fragile peace in place in these regions will require intensive consultative processes with a variety of stakeholders. There has also been no discussion as to what will happen to the Interim Constitution, adopted after the signing of the peace agreement, if the south chooses secession. Sudanese human rights and civil society leaders fear that because of the lack of constitutional guarantees, there will never be another round of elections in Sudan.

Business as Usual or Change We Can Believe In?

In his inaugural address, President Obama declared, “To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history; but that we will extend a hand if you are willing to unclench your fist.” Unfortunately, in the case of Sudan, the hand remains extended, even as the fist remains clenched and poised to strike.

To handle the crisis in Darfur and fulfill the U.S.’s role as a guarantor to the peace deal, the Obama administration wisely chose to engage all parties in Sudan to find peaceful resolutions to the multiple challenges facing the country. U.S. Special Envoy Scott Gration and Secretary of State Hillary Clinton laid out the objectives of this approach in October 2009: a definitive end to conflict, gross human rights abuses and genocide in Darfur; the implementation of a north-south agreement that results in a peaceful post-2011 Sudan, or an orderly path toward two separate and viable states at peace with each other; and assurance that Sudan does not provide a safe haven for international terrorists. In addition to this plan, administration officials promised to balance the use of sticks and carrots, with benchmarks of verifiable changes in behavior by Khartoum and others who would block the path to durable peace.

The run-up to the elections, however, has shown an administration hesitant to call out the Bashir regime. Instead, it has argued that the elections — regardless of the political conditions — are a necessary step for peace. Rather than challenging the regime to follow through with its commitment to create a hospitable environment for free and fair elections, Gration has regularly downplayed and, in some cases, made excuses for the substandard electoral processes. In the chaotic weekend following the pullout of a number of parties and candidates, Gration exerted considerable effort to salvage the process, telling reporters that Sudanese officials had “given [him] confidence that the elections … would be as free and as fair as possible” and that they “have gone to great lengths to ensure that the people of Sudan will have access to polling places and that the procedures and processes will ensure transparency.” As a result, many opposition parties and civil society activists in Sudan have begun to lose confidence in the U.S.’s commitment to democracy and human rights.

It is not too late for President Obama to hold firm to his inaugural promise and declare his administration’s disapproval of politics as usual in Sudan. When the election results are announced this week, he can lead the international community in interpreting their significance. Rather than offering unearned praise, he should state that the administration still regards Bashir as an indicted war criminal on the wrong side of history. If the U.S. fails to stand up for its principles, advocates for democracy around the world will be disheartened, the Bashir government will continue to act with impunity, and the Sudanese people will lose faith in America, even as they face an uncertain and potentially dangerous future.

Download PDF.

Erie Times-News: Erie figures to be missing high-speed link

Posted on by The Progressive Policy Institute

Mark Reutter in the Erie Times-News:

Mark Reutter, a fellow for the Progressive Policy Institute who spoke at a recent high-speed rail summit in Erie, would like to see Erie rail service make a return trip to the future.

From 1935 to 1950, he said, the fastest trains in the world were streamliners that routinely topped 90 mph.

Some of the fastest were among the 42 passenger trains that passed through Erie daily during the 1940s.

Those trains eventually fell victim to the rise of the interstate highway system and declining ridership.

Will faster trains be more popular trains? Only 12,000 people — about 32 a day — board in Erie each year.

Read the entire article.