Majority Leader Harry Reid offers a realistic energy bill
SENATE MAJORITY Leader Harry M. Reid (D-Nev.) intends to bring an energy bill to the Senate floor the week of July 26. It will feature four key elements -- a response to the Gulf of Mexico oil spill, promotion of energy efficiency, a boost for clean-energy production and a cap on carbon emissions from power plants. This is not ideal, but it would be a useful start.
The carbon dioxide released into the atmosphere by burning fossil fuels adds to the greenhouse effect that threatens to bring destructive changes to the planet. Decreasing those emissions demands innovation -- the development of greener and cheaper sources of energy such as wind, solar and nuclear power -- and the use of economic incentives to wean industries off cheap coal and oil. To provide such an incentive, we have has long favored putting a price on carbon, either (most simply) with a gradually rising tax or with a cap-and-trade system. By gradually increasing the cost to companies of the carbon dioxide they produce, the United States can generate revenue and marshal market forces to encourage businesses to invest in greener technology. To this end, even a limited cap -- like the one on utilities emissions proposed in the Senate bill -- is better than none. Once a structure is in place, a cap can be expanded to encompass more industries and adjusted to drive innovation in the right direction.
Moreover, power generation is the right industry to target: Power plants account for 40 percent of all U.S. carbon dioxide emissions, and many utilities already have gotten on board with the concept of a cap. Rather than simply opposing the cap out of hand, as many have in the past, Republicans should help make sure that it works sensibly. Much will hinge on how the carbon allowances are allocated. The best model would auction the allowances and use the funds generated to provide rebates to consumers and encourage research and development of improved green technologies. Such a model would make the measure more palatable to taxpayers and drive more responsible energy use. Some utilities already are lobbying Congress, in exchange for accepting the carbon cap, to delay or loosen Clean Air Act restrictions on other forms of pollution, including smog and mercury poisoning. That's a bad deal. Fixing the long-term problem of carbon emissions should not come at the cost of worsening short-term environmental problems.
The Reid proposal is less ambitious than the stillborn bipartisan attempt of Sens. John F. Kerry (D-Mass.), Joseph I. Lieberman (I-Conn.) and Lindsey O. Graham (R-S.C.), and far less ambitious than the Waxman-Markey bill passed by the House. But in the current economic and political climate, it offers a reasonable compromise that could lay the groundwork for a sensible carbon policy.