James Hansen, the well-known climatologist who had run-ins with the Bush Administration, said a few years ago that we had 10 years, not to reverse global warming –we can’t it is already here– but to mitigate its worst impacts. More recently, he has reduced his time to take action to 4 years. The relation of concentration of greenhouse gases (GHG) in the atmosphere to effects on global climate change is not linear. So what Hansen is talking about is a tipping point. Up to that tipping point small reductions in GHG levels can keep large effects from happening. Once exceeded even major efforts will have little or no effect on keeping them from occurring. The odds are that governments, including ours, will not act in time or choose approaches that are insufficient to the gravity of the problem.

Two common justifications for not acting are cost and the need for a global response. For the first, while there will be costs the price of not acting or doing too little will be much higher. As for the second, we can hardly ask the rest of the world to follow us if we are unwilling to lead.

One simple, direct, and effective means of dealing with carbon loading is to tax carbon producers like coal fired electrical plants and oil companies. The cost impacts of such a tax could be mitigated by rebates from the government to consumers and limitations on industry’s ability to pass along costs to customers.

It is significant that Obama has never considered a carbon tax. Instead he has preferred the less effective more free market solution of cap-and-trade. But even here his position has weakened over time.

Here are some of the major policy ideas of candidate Obama.

1. Reduce carbon emissions by 80% by 2050
2. Cap and trade with auction of 100% of allowances

“A 100 percent auction ensures that all large corporate polluters pay for every ton of emissions they release, rather than giving these emission rights away for free to coal and oil companies.”

3. Invest $150 billion over 10 years in energy technology
4. Reduce carbon in fuel by 10% by 2020
5. 25% of electricity from renewables by 2025
6. New federal buildings to be zero-emission by 2025; 40% more efficient within 5 years
7. All new buildings to be zero-emission by 2030
8. Green Job Corps
9. Digital Smart Grid
10. Double fuel economy for cars within 18 years

As President in his February budget proposal he retained most of these. He refined greenhouse gas reduction to about 14% below 2005 levels by 2020, and about 83 percent below 2005 levels by 2050. The 100% auction of cap-and-trade permits was expected to generate a $150 billion for research and $65 billion a year for rebates to consumers.

On March 31, 2009, Representatives Henry Waxman (D-CA), chair of the House Energy and Commerce Committee, and Edward Markey (D-MA), chair of the House Select Committee on Energy Independence and Global Warming, unveiled a draft climate change proposal based on many of the points of the Obama plan (which they dubbed the American Clean Energy and Security Act or ACES). There were some modifications in the timing of GHG reduction but not the overall goal:

3% below 2005 levels in 2012, 20% below 2005 levels in 2020, 42% below 2005 levels in 2030, and 83% below 2005 levels in 2050

The 20% decrease by 2020 was higher than Obama’s initial figure of 14%. The draft ducked the makeup of the cap-and-trade system entirely. By mid-May, Waxman and Markey had split the difference and agreed to a 17% reduction by 2020. Their bill also created a 2 billion ton offset market for carbon split half and half between domestic and foreign sources. This would allow companies to invest in carbon reducing projects abroad and have 5 tons of foreign reduction count for 4 tons against their domestic carbon saving requirements. The EPA estimates that the cost of the bill woul be $98-$140 a year for an average household.

The ACES bill differs markedly from the Obama plan in that 85% of carbon allowances under cap-and-trade would be given away initially with the government selling only 15%. 30% of the free allowances would go to local electric companies to fund customer rebates with a 2026-2030 phase out, 15% would go to heavy industrial producers until 2025, 10% to state governments for conservation and renewables, 9% to natural gas distributors with a similar phase out, etc. Overtime the number of free allowances would decrease. Only 1.5% (1/10 of the 15%) would go to new technologies.

A lot of thought went into this bill. So what is wrong with it? Quite simply it is too little too late to avoid the tipping point of which Hansen spoke. We are coming to the end of a period where immediate action would keep global effects in the relatively mild range. Even with the Obama-Waxman-Markey plan, we will face climate change effects that will be moderate to severe. And there are reasons to doubt the political stamina for action. The first reductions do not take effect until 2012 and are 3%. This will be at the end of Obama’s first term. The 83% reduction of 2050 is 9 1/2 Presidential terms away or several political eternities. Could anyone in 1999 have predicted the disaster that was Bush and where the country would be in 2009?

ACES passed the House on June 26, 2009 with a paper thin margin 219-212. Obama applauded the House bill although it differed from his original program. How he did it is problematic. He described ACES as a jobs bill, a clean energy act that will reduce our dependence on foreign oil, etc. He mentioned only fleetingly the grave danger that climate change poses to us and our descendants. The fate of the bill in the Senate is anybody’s guess but, given past history, Obama could compromise it even further –because Obama does want a bill, something that he can take with him to the December world climate conference in Copenhagen and claim a leadership role based upon it, whether this is deserved or not.

There are also concerns about the use of offsets. These will start out at about 15% of the total and by 2050 could increase to 33% with most of the carbon reductions coming from abroad. Although there will be an approval board for offset projects, it isn’t clear that projected carbon savings will equal what is really saved. It is also important to note that carbon allowances are financial instruments and a market for them is an integral part of the plan. In light of the unreformed nature of Wall Street, gaming of them is almost a certainty. This gets to the heart of the problem. Rather than dealing directly with industry (a carbon tax, limitations), the Congress and Obama are using industry as their intermediary to reform itself and deal with consumers. They are trusting to the genius of the marketplace, a marketplace that recent events have shown to be both rigged and moronically self-destructive.

This is item 60 in my Obama scandals list