ANLA and SAF have done a yeoman’s job of keeping green industry firms informed of what is happening in Washington in terms of the effects of mid-term elections and the critical regulatory and legislative issues facing nursery/floral businesses today. Be sure to check out the Washington Impact section (click here) of the ANLA Knowledge Center and the latest SAF analysis of the effects of mid-term elections on your business (click here). As the saying goes, what you don’t know, can hurt you.
COLLEGE STATION — Jonathan R. “Jon” Pawlow will be the Distinguished Lecturer for the eighth Ellison Chair in International Floriculture Distinguished Lecture Series at Texas A&M University on Oct. 27. His topic will be “Emerging Water Resources Issues — What are the Trends? What are the Policy options?”
Pawlow is counsel for the water resources and environment subcommittee of the House Committee on Transportation and Infrastructure. He is responsible for matters within the subcommittee’s jurisdiction relating to water pollution control and water infrastructure, wetlands, hazardous waste cleanup, and water resources management, conservation, and development.
The event will begin at 2 p.m. on October 27 with a reception in the Horticulture and Forest Science Building atrium, and his address will begin at 3 p.m. in Room 102.
The Distinguished Floriculture Lecture Series is sponsored by the Texas A&M Horticultural Sciences department’s Ellison Chair in International Floriculture, currently held by Dr. Charlie Hall.
“Given the importance of water across all sectors of agriculture, we are extremely excited to have Jon as our next lecturer, given his vast knowledge and experience with water-related issues in the country,” Hall noted.
Pawlow is an attorney and scientist/engineer with expertise in the environmental and intellectual property fields. He has more than 15 years of private law practice experience, and substantial public sector legislative, regulatory, law, policy, and technical experience with the U.S. Environmental Protection Agency and as assistant chief counsel with the Office of Advocacy of the U.S. Small Business Administration prior to joining the House Transportation and Infrastructure Committee.
He earned his law degree from the Georgetown University Law Center, and bachelor’s and master’s degrees in water resources engineering and environmental science from Rutgers University. Pawlow is a member of the District of Columbia and Virginia Bars, and is registered as a patent attorney to practice before the U.S. Patent and Trademark Office.
Much attenti0n has been placed on the recent health care reform legislation. Here is a short compilation of resources that will help in determining business-level impacts:
The recent signing of health care reform legislation has brought a renewed national focus on events here in Washington, DC. With a shift in Congress’ attention, ANLA’s government relations team looks to several key issues, and threats, for our industry. Click here to view video updates on immigration reform, health care reform legislation, the Biomass Crop Assistance Program and the National Tree Planting Program.
Dr. Robert Stavins, who is Director of Harvard’s Environmental Economics program and the opening keynote speaker for this year’s Seeley Conference (June 27-29 in Ithaca, NY) provides the following perspective on the future of cap & trade legislation:
In a recent article in the New York Times, John Broder asks “Why did cap-and-trade die?” and responds that “it was done in by the weak economy, the Wall Street meltdown, determined industry opposition and its own complexity.” Mr. Broder’s analysis is concise and insightful, and I recommend it to readers. But I think there’s one factor that is more important than all those mentioned above in causing cap-and-trade to have changed from politically correct to politically anathema in just nine months. Before turning to that, however, I would like to question the premise of my own essay.
Is Cap-and-Trade Really Dead?
The evolving Kerry-Graham-Lieberman legislation has a cap-and-trade system at its heart for the electricity-generation sector, with other sectors to be phased in later (and it employs another market-based approach, a series of fuel taxes for the transportation sector linked to the market price for allowances). Of course, due to the evolving political climate, the three Senators will probably not call their system “cap-and-trade,” but will give it some other creative label.
The competitor proposal from Senators Cantwell and Collins — the CLEAR Act — has been labeled by those Senators as a “cap-and-dividend” approach, but it is nothing more nor less than a cap-and-trade system with a particular allocation mechanism (100% auction) and a particular use of revenues (75% directly rebated to households) — and, it should be mentioned, some unfortunate and unnecessary restrictions on allowance trading.
And we should not forget that cap-and-trade continues to emerge as the preferred policy instrument to address climate change emissions throughout the industrialized world — in Europe, Australia, New Zealand, and Japan (as I wrote about in a recent post).
But back to the main story — the dramatic change in the political reception given in Washington to this cost-effective approach to environmental protection.
A Rapid Descent From Politically Correct to Politically Anathema
Among factors causing this change were: the economic recession; the financial crisis (linked, in part, with real and perceived abuses in financial markets) which thereby caused great suspicion about markets in general and in particular about trading in intangible assets such as emission allowances; and the complex nature of the Waxman-Markey legislation (which is mainly not about cap-and-trade, but various regulatory approaches).
But the most important factor — by far — which led to the change from politically correct to politically anathema was the simple fact that cap-and-trade was the approach that was receiving the most serious consideration, indeed the approach that had been passed by one of the houses of Congress. This brought not only great scrutiny of the approach, but — more important — it meant that all of the hostility to action on climate change, mainly but not exclusively from Republicans and coal-state Democrats, was targeted at the policy du jour — cap-and-trade.
The same fate would have befallen any front-running climate policy.
Does anyone really believe that if a carbon tax had been the major policy being considered in the House and Senate that it would have received a more favorable rating from climate-action skeptics on the right? If there’s any doubt about that, take note that Republicans in the Congress were unified and successful in demonizing cap-and-trade as “cap-and-tax.”
Likewise, if a multi-faceted regulatory approach (that would have been vastly more costly for what would be achieved) had been the policy under consideration, would it have garnered greater political support? Of course not. If there is doubt about that, just observe the solid Republican Congressional hostility (and some announced Democratic opposition) to the CO2 regulatory pathway that EPA has announced under its endangerment finding in response to the U.S. Supreme Court decision in Massachusetts vs. EPA.
(There’s a minor caveat, namely, that environmental policy approaches that hide their costs frequently are politically favored over policies that make their costs visible, even if the former policy is actually more costly. A prime example is the broad political support for Corporate Average Fuel Economy (CAFE) standards, relative to the more effective and less costly option of gasoline taxes. Of course, cap-and-trade can be said to obscure its costs relative to a carbon tax, but that hardly made much difference once opponents succeeded in labeling it “cap-and-tax.”)
In general, any climate policy approach — if it was meaningful in its objectives and had any chance of being enacted — would have become the prime target of political skepticism and scorn. This has been the fate of cap-and-trade over the past nine months.
Why is Political Support for Climate Policy Action So Low in the United States?
If much of the political hostility directed at cap-and-trade proposals in Washington has largely been due to hostility towards climate policy in general, this raises a further question, namely, why has there been so little political support in Washington for climate policy in general. Several reasons can be identified.
For one thing, U.S. public support on this issue has decreased significantly, as has been validated by a number of reliable polls, including from the Gallup Organization. Indeed, in January of this year, a Pew Research Center poll found that “dealing with global warming” was ranked 21st among 21 possible priorities for the President and Congress. (It should be noted some polls are not consistent with these.) This drop in public support is itself at least partly due to the state of the national economy, as public enthusiasm about environmental action has — for many decades — been found to be inversely correlated with various measures of national economic well-being.
Although the lagging economy (and consequent unemployment) is likely the major factor explaining the fall in public support for climate policy action, other contributing factors have been the so-called Climategate episode of leaked e-mails from the University of East Anglia and the damaged credibility of the Intergovernmental Panel on Climate Change (IPCC) due to several errors in recent reports.
Furthermore, the nature of the climate change problem itself helps to explain the relative apathy among the U.S. public. Nearly all of our major environmental laws have been passed in the wake of highly-publicized environmental events or “disasters,” ranging from Love Canal to the Cuyahoga River.
But the day after Cleveland’s Cuyahoga River caught on fire in 1969, no article in The Cleveland Plain Dealer commented that “the cause was uncertain, because rivers periodically catch on fire from natural causes.” On the contrary, it was immediately apparent that the cause was waste dumped into the river by adjacent industries. A direct consequence of the “disaster” was, of course, the Clean Water Act of 1972.
But climate change is distinctly different. Unlike the environmental threats addressed successfully in past legislation, climate change is essentially unobservable. You and I observe the weather, not the climate. Until there is an obvious and sudden event — such as a loss of part of the Antarctic ice sheet leading to a disastrous sea-level rise — it’s unlikely that public opinion in the United States will provide the bottom-up demand for action that has inspired previous Congressional action on the environment over the past forty years.
Finally, it should be acknowledged that the fiercely partisan political climate in Washington has completed the gradual erosion of the bi-partisan coalitions that had enacted key environmental laws over four decades. Add to this the commitment by the opposition party to deny the President any (more) political victories in this year of mid-term Congressional elections, and the possibility of progressive climate policy action appears unlikely in the short term.
An Open-Ended Question
There are probably other factors that help explain the fall in public and political support for climate policy action, as well as the changed politics of cap-and-trade. I suspect that readers will tell me about these.
The 2008 ANLA/Lighthouse Voter Guide is a non-partisan, informational guide that spells out the voting records for representatives and senators on green-industry issues, and a review of “industry champions.” The Lighthouse Program is the nursery and landscape industry’s national grassroots program. The program is a partnership between state and regional nursery/landscape associations and ANLA.
With the news full of failing banks, dried-up credit and falling stock markets, it’s no shock that people are afraid about what’s ahead, entrepreneurs included. And yet even in the midst of all this, the opportunities ahead are bright for green businesses providing renewable energy.
In a recent post, I outlined the non-financial sections of the “Emergency Economic Stabilization Act of 2008” fully expressing my frustrations. But there are always two sides of every coin. Perhaps the silver lining in the “bailout cloud” was an extension and expansion of tax credits for renewable energy. The impact of the $700 billion bailout remains uncertain as this point, but the impact of these incentives for renewable energy is likely to be huge, helping to solve our financial problems, our climate problem, and our energy problems at the same time.
The bill provides for an eight-year extension of renewable energy investment tax credits covering up to 30% of the cost of solar power projects for homes or commercial sites. The short time frame of these tax credits in the past, and their frequent expiration from year to year have created enough uncertainty to dampen long-term growth. Eight years is long enough to allow for long-term planning, and encourage long term growth.
Along with the extension of the credits, the $2000 cap on the tax credit for residential systems has been removed. With a residential system of $30,000, the tax credit will be $9000 in 2009 rather than being limited to $2000 as before. While a large percentage of the solar market has been limited to states like California that have provided the most generous state-level subsidies, removing the cap will greatly expand the market for solar power across the country.
Distributors and installers will see opportunities expand nationwide. A recent study by Navigant Consulting found that extending these credits will create 440,000 jobs, contributing to the growth of green collar jobs, and these numbers did not include the removal of the cap.
Other renewable energy technologies will also benefit from the measures in the bill, including small wind, geothermal, fuel cells, and ocean (wave/tidal) energy. The measure allows utilities to take advantage of the investment tax credit as well, removing another restriction, and allows clean energy bonds to be created to support the creation of renewable energy production.
As renewable energy continues to grow and its costs fall, it’s becoming increasingly competitive with power from other sources like coal. These tax credits will help to get us there. We’re not out of the woods yet by a long shot, but these moves to a greener economy may help us dig our way out.
The Food, Conservation, and Energy Act of 2008, which governs Federal farm programs for 2008-12, was enacted into law in July 2008. ERS’ side-by-side comparison of this new Farm Act with previous legislation is now available (click here). Summarized but substantive, this comparison is a time-saving reference on farm bill provisions. Title X deals specifically with horticultural crops.