Rep. Henry Waxman just wrested a key chairmanship away from Rep. John Dingell, a Michigan Democratic with close ties to Michigan’s ailing auto industry. Many environmental groups believe that Rep. Waxman’s ascendance represents a victory for the planet. Mr. Waxman strongly supports taking action on climate change.

Just as importantly, his constituents in smoggy California are likely to support, rather than oppose, increased fuel efficiency for motor vehicles. Rep. Dingell’s constituents, on the other hand, may view heightened fuel efficiency as a threat to Michigan’s chief industry.

Getting Rep. Dingell out of the way - as Chairman of the Committee on Energy and Commerce, he could kill fuel efficiency proposals regardless of how much support they enjoyed in the house - may well remove one of the biggest obstacles to reining in greenhouse gas emissions from motor vehicles. This is no small thing given the immense environmental impact of the transportation sector, which accounts for nearly one-third of U.S. greenhouse gas emissions.

Putting the right people in the right places may be one of the most important ways to break the logjam.

This is progress. But “drill, baby, drill!” does not constitute “doing something” about climate change.

 Over the past few years, major energy companies and environmental groups have met to hammer out a workable climate change policy. The good news is that there’s widespread agreement about climate change science and the need for action. The bad news is that squabbling over the spoils of a future climate change policy threatens to dilute support for major climate change legislation.

Major federal climate legislation is likely to take the form of a cap and trade system like the one used by the European Union or the regional cap and trade systems emerging on America’s coasts. On a macro level, this makes a lot of sense: cap and trade systems are a very efficient, flexible, cost-effective way to reduce emissions.

On a micro level, however, there’s a problem: the auction or allocation of greenhouse gas allowances will create winners and losers, which strains pro-climate action business coalitions. Giving away allowances means awarding windfalls to energy-intense businesses. Auctioning them puts low-polluting industries on the inside track.

Interestingly, some of the oil executives interviewed for the article called for fuel efficiency regulations:

“At a time of sharply rising prices, oil executives say [a cap and trade system] is not the best way to reduce carbon emissions. Better, they argue, to raise fuel efficiency requirements directly or set up a low-carbon fuel standard.”

From an economist’s perspective, this is foolish. Regulations may cost more than they are worth, or they may not achieve the desired level of pollution. A cap and trade system starts by defining the desired level of pollution, then lets market actors sort out who can reduce emissions for the least money - which means that we get the level of emissions we want at the lowest possible price.

From the oil companies’ point of view, however, it’s not foolish at all to call for regulation. A cap and trade system would put them at a competitive disadvantage with respect to companies that can easily reduce their carbon emissions. A new set of regulations might keep the playing field level - or, rather, tilted at the same angle.

From a policy perspective, would a new set of regulations be a way of breaking a political logjam even as we create an inefficient system? Or would proposed regulations be seen as a threat to the status quo, to the tilt of the playing field?

So, McCain’s running mate doesn’t believe that humans are causing global warming. She figures the jury’s still out on this one, that science will tell us eventually, and that we should do some more research.

Of course, the science has told us. Repeatedly. The Intergovernmental Panel on Climate Change, in its exhaustive review of climate science, has even published a summary for policy makers.

Senator McCain’s choice of Palin, who also believes that creationism should be taught alongside evolution in public schools, casts serious doubt on his commitment to combat climate change. If Palin’s willful ignorance about the basic facts of climate change wasn’t a deal-breaker for him, I think it’s fair to wonder if McCain is backing down on climate change. Five years ago, McCain cosponsored the Lieberman-McCainClimate Stewardship Act. This week, he picked a global warming denier as his running mate. That, my friends, is not what we call making progress on the issue.

We can’t afford to stall on meaningful climate change action for another four to eight years.  McCain’s veep choice isn’t just embarassing from a scientific and environmental point of view - it’s dangerous. If McCain is elected to office, Gov. Palin, global warming denier, will be breaking tie votes in the Senate.

Together, North and South Dakota could provide enough wind energy to power half the U.S. population. Unfortunately, half the country would have to move to the Dakotas to use the power.

Why is it so difficult to access the power of the plains? Because we have a balkanized grid system.

If we wanted to harness the nation’s capacity for wind and solar energy - and ship that power to the places most people live - we would need to build long-distance transmission lines from the sun-rich deserts and wind-swept plains to the populated coasts. The cost of this massive increase in infrastructure could be spread over decades of time and tens of millions of consumers, and it would drastically decrease the greenhouse gas emissions associated with electricity production.

However, our balkanized system of producing and transmitting electrical power poses a serious obstacle to modernizing the grid. States have traditionally exercised power over the grids, and they have little incentive to invest in infrastructure that would benefit other states. This leaves us with a classic collective action problem: together, we’d all be better off with a modernized grid. Individually, each state is better off concentrating on its own power needs rather than taking the risk that other states will free ride off their investment in an interstate grid.

The federal government attempted to step in when Congress gave the Department of Energy permission to approve transmission lines if states failed to act, but a group of Senators opposed the DOE when it tried to act on its new authority.

There’s obviously a mismatch between the scale of the problem (building a modern, interstate electrical grid) and the scale of the government charged with handling the problem (50 states, many power companies). Our country’s fierce parochialism would pose a threat to increased electricity generation even if the growth of renewable energy weren’t at stake (electrical generation is growing four times as fast as electrical transmission, which is a recipe for a bottleneck). As it is, clinging to an outdated political power structure is preventing us from building a modern grid that would allow us to address climate change and air pollution.

So, how do we break the logjam? What can we do to ensure that federalism doesn’t keep us from addressing nationally and globally urgent problems?

As my inaugural post should have indicated, I am fascinated by the myriad problems that coalesce under the “E-Waste issues” category. Most of these aren’t really strictly legal-there’s a lot to be said, for example, on the topic of whether the ever-increasing ephemerality of electronic appliances (both in terms of planned obsolescence and shoddiness of manufacture, in stark contrast to the days where your Sansui stereo receiver weighed 200 pounds and was designed to last to the dystopian future and beyond) is the prime agitating force behind many E-waste issues. One prominent, borderline-legal aspect of E-waste management that must inevitably be considered, however, is the ease of “proper” disposal. I suspect that we approach truism when we admit that a greater disparity in difficulty, cost, and convenience to a consumer between the “right” method of disposal and the “wrong” method of disposal corresponds to a steadily lessening compliance, especially in an arena that is so new and, comparatively, unfamiliar.

A personal anecdote might be helpful here. I spent several years living in Chicago, a city whose managerial “issues” are both legion and infamous. When I arrived, the primary “regular” recycling paradigm involved the “blue bag” system: you were instructed to put your recyclables in an ordinary alley trash bin, but instead of using a standard garbage bag, you were to use a blue plastic bag supplied by the city. This magical plastic implement would signal to trash collectors that…well, actually, I’m not sure what it practically signaled, as few believed that the system actually worked, many buildings were effectively ignored by the blue-bag program, and compliance/comprehension in areas that were served remained perilously low (you can check out a Chicago Reader article on this and other Chicago recycling problems here; an obituary for the blue bag program, which was officially put out to pasture on May 2nd, is available here.).

Near the end of my stay in the Windy City, however, the winds of change brought with them a new recycling initiative. Cognizant of the failings of the blue bag approach-but, in typical Chicago fashion, loathe to take action that would upset Chicago’s delicate balancing of warring interests-the city government decided to move to a single-stream model, focused around the placing of “blue-cart” recycling centers around the city. These carts would essentially be free-standing recycling “dumpsters,” where all recyclables (admittedly, a greater variety than I’ve found to be traditionally accepted in New York) could be dumped with impunity. The single-stream model removes the sorting and cataloging that has traditionally served as one of the many consumer-level impediments to recycling, and its adoption represented an important step forward for the city.

However, the decision to embrace a distributed disposal model brought with it several additional problems. As the second Reader article above notes, the program has struggled with funding issues from the get-go, and some areas of the city simply weren’t very well served by the new program; moreover, the locations that were established were frequently…let’s be charitable and say that they were located slightly counterinuitively. For example, the closest location to my apartment was located at 1758 S.Clark. For those unfamiliar with the area or the city of Chicago in general, I’ve included a very high-tech illustration of this location below, courtesy of Google Maps’ satellite view.

Yep; my drop-off center was in the middle of nowhere, next to some train tracks, in a random parking lot at 18th and Clark. All that was missing was some broken-down Terminators and perhaps a flaming barrel or two.

Obviously, this model presents several problems. One, you need a car to haul your stuff to the center. Two, time and effort is required to actually make the trip…and for those for whom leisure time is a rare luxury indeed, time is no-doubt better spent at places other than the nearest recycling depot. That most residents of my area found this approach to recycling impracticable was aptly demonstrated by the sheer preponderance of Trader Joe’s bags I saw used as carriers for recyclables.

Tying this back into my original topic: currently, municipal E-waste models seem to embrace this “you bring it to us” paradigm, which no-doubt limits compliance by even those whose Janist-like dedication to recycling would normally equate one accidentally thrown-out glass jar with a minor tragedy worthy of garment rending. In Westchester, for example, large E-waste recycling is seemingly limited to specific dates and locations; convenient if your huge old CRT happens to break the day before the collection down the block, not so much if a power spike kills ten computer monitors in early January in the northern part of the county. The burden is placed largely on the consumer; the negative aspects of compliance are potentially severe, and those without access to transportation cannot hope to take advantage of the services provided.

So what’s the solution? More central control? A centrally standardized approach to E-waste management? Not necessarily. Convenience for the consumer needs to be a plank of any plan that seeks to seriously confront the E-waste recycling problem. These initiatives are likely to be economically inefficient; after all, arming municipalities with call-and-pick-up programs is likely to cost more than the current model while providing little in the way of immediate financial benefit. The Penns and Tellers of the world, then, will not be pleased with initiatives along this line. Yet the scope of the problem and the general difficulty of compliance in the majority status-quo would seem to compel measures that go above and beyond economic modeling and cost/benefit pragmatism to embrace a strategy that would do as much as possible to avoid future E-waste-related tragedies.

In the area of environmental and resource protection, “Do no wrong” seems to make sense whether you are trying to break the current policy logjam or portage around it. Congressional earmarks which basically make up the lion’s share of the Army Corps of Engineers’ Civil Works program, are good place to start.

Recently, I joined in on a bipartisan letter sent by former EPA assistant administrators for water, from the Clinton, Bush I and II administrations, urging congressional support for EPA’s proposed veto of the Yazoo Pumps project in Mississippi, one of the more destructive projects in recent history in terms of wetlands habitat. Below is the text of the letter sent to Senator Barbara Boxer, chair of the Senate Environment & Public Works Committee. Similar letters were sent to the ranking member and to counterparts on the relevant House committee.

May 1, 2008

The Honorable Barbara Boxer
Majority Office
410 Dirksen Senate Office Building
Washington, DC 20510

Re: Yazoo Backwater Pumping Plant, Mississippi

Dear Madame Chairwoman,

As former EPA Assistant Administrators we are keenly appreciative of the value of our nation’s wetlands. We appreciate EPA’s decision to initiate a Clean Water Act section 404© review of the Yazoo Backwater Pumping Plant project in Mississippi. We write to you today to ask that you support the Agency in this important effort. The Agency’s commitment to protecting the remaining wetlands of the Mississippi Delta is an important step.

Construction and operation of the Yazoo Pumps would drain or damage 200,000 acres of wetlands at a cost to the federal taxpayers of well over $220 million. This project sits squarely at odds with EPA’s obligations under the Clean Water Act, and with the Administration’s commitment to “no net loss” of wetlands.

We recognize the historic nature of this decision to proceed with a 404© review. The Environmental Protection Agency has vetoed only 11 other projects under the Clean Water Act. The impacts of the Yazoo Pumps are 25 times the combined wetlands impacts of all the other projects previously vetoed by EPA. The wetlands of the Mississippi Delta region are vital to the health of important fish and wildlife, including 20 percent of the nation’s duck populations, numerous migratory birds, and the federally threatened Louisiana black bear. We write today to urge you to support the Agency’s work to stop this project.

We encourage the complete 404© review be conducted expeditiously and emphasize to you the tremendous importance of the Mississippi Delta wetlands for generations to come.

Thank you.

Bob Perciasepe
EPA Assistant Administrator for Water
1993-1998

Lajuana Wilcher
EPA Assistant Administrator for Water
1989-1992

Tracy Mehan
EPA Assistant Administrator for Water
2001-2003

Chuck Fox
EPA Assistant Administrator for Water
1998-2001

EPA and OMB are in the right place on this issue, but there was rumbling of opposition from some quarters on the Hill. Hence this letter sent from the last four assistant administrators, Republican and Democrat.

For more background see: http://www.epa.gov/owow/wetlands/pdf/Yazoo_PD_Final_FRN.pdf

A friend recently pointed me towards an interesting (if brief) piece recently done for MSNBC (warning: video link) entitled “Green Hospitals Extend Mission to ‘Do No Harm’”. The piece touches upon the efforts taken by one local hospital to “green up” its facilities, via incorporating more recycled materials into the environment and attempting to take a holistic approach to minimizing an environmental footprint.

Given as hospitals are such a giant source of various problematic waste-products–and given how regulated the hospital waste-regime seems to be at present–it’s interesting to observe what appears to be a voluntary embarkation onto an ancillary (but, one hopes, effective and trend-setting) process for continuing to minimize the effect of such facilities on environmental.

…and heck, speaking as someone who finds hospitals to be only mildly less offensive and alienating than airports, a trend towards a more sensible, environmentally friendly design aesthetic seems to bode well for the essential humanity of the facilities in question.

A big concern with national climate change policy proposals regards the issue of international competitiveness. A national climate change policy like a cap-and-trade system or a carbon tax will impose higher costs on the producers of regulated products, and if foreign producers of competitive goods are not similarly regulated, they will possess a competitive advantage over our domestic producers. Without proper measures, consumers in the U.S. will probably prefer to buy the cheaper (less regulated) imported products over the more expensive (but climate change-regulated) domestic goods. This could not only damage domestic industry (even if producing goods just as efficiently as their foreign competition), but could also lead to more production of unregulated, dirty, carbon-intensive goods (what’s referred to as leakage). A double whammy.

One potentially elegant solution to this problem presents itself in the form of “border adjustments“. With border adjustments, a tariff would be imposed on any product imported into this country from a country that did not impose adequate climate change regulations on its production. A recommendation along those lines has been recommended by two large U.S. Unions (the IBEW and the AFL-CIO), and by the U.S.’s largest coal-burning utility, AEP (strange bedfellows indeed). Their proposal would require “large emitter” countries (read: China & India) to submit allowances to the US for any unregulated emissions created during the productions process of products they intend to export to the US.

A second, much less talked about side to border adjustments regards the exporting of US products regulated under climate change legislation. Using the same competitiveness arguments as with incoming border adjustments, if we want our ostensibly “cleaner” US products to be able to compete with foreign products on their turf, we could offer “rebates” to exporters to strip these products of their regulatory costs when exported to these countries. Without such rebates, we’ll be placing domestically produced exports at a competitive disadvantage with their foreign produced, cheaper, and “dirtier” competition; a situation ripe for leakage.

There are a lot of important issues at stake when thinking about competitiveness and climate change policies. When thinking about these and other issues, it’s been helpful for me to realize that by placing a price on greenhouse gas emissions, a cap-and-trade system or carbon tax will be forcing producers of carbon-intensive goods to cover the true (or at least truer) costs of their products (they will be internalizing an externality). If we agree that unregulated producers in other countries (and currently in this country) are not being forced to pay for these costs, then we can also say they are actually being subsidized by their governments. By imposing border adjustments on such subsidized products, we would just be leveling the playing field.

For more information:

• “Competitiveness Under Climate Policy,” a blog post by Daniel Hall at the environmental economics blog Common Tragedies.
• A paper by Richard Morgenstern at Resources for the Future regarding Competitiveness & Mandatory US Climate Policies.
• “Should a Carbon Tax be Border Adjustable?”, a blog post over at Greg Mankiw’s Blog.

In a Rose Garden speech last week, President Bush said that the public deserves “an honest assessment of the costs, benefits and feasibility of any proposed solution” to climate change. Today his administration took a small step towards that goal, monetizing the benefits of reduced greenhouse gas emissions for the first time in its proposed fuel economy standards.

The change was prompted by the Ninth Circuit, which threw out the president’s last fuel economy standards in part due to their failure to quantify those benefits. Rejecting the Department of Transportation claim that the broad range of values made monetization too difficult, the court held, “While the record shows that there is a range of values, the value of carbon emissions reduction is certainly not zero.”

Bush’s latest fuel economy proposal will begin requiring industry to internalize the costs of their contributions to global warming. This sort of monetization should be incorporated in all future rules and permitting decisions, to the extent that statutes permit; it’s one of the most effective ways we can begin to address climate change until a new regulatory scheme is in place.

Unfortunately, the president thinks a ton of carbon dioxide is worth about as much as a sandwich at Cosi (without chips.) Valued at $7/ton, the pollution would be a steal at twice the price. In Europe, carbon dioxide is trading at around $40/ton — but everything’s more expensive there.

NHTSA claims that it settled on the $7 value by averaging the lower bounds ($0/ton) and upper bounds ($14/ton) of the IPCC’s latest estimates of global warming’s costs. The IPCC never actually said that climate change would have zero economic costs, however; the administration manufactured that figure by limiting its focus to purely domestic impacts. Nor does the IPCC ever suggest that domestic costs will be zero, but, in a creative interpretation of the report’s silence, the administration concludes, “[The IPCC] does not necessarily rule out low or zero values for the benefit to the U.S. itself from reducing emissions.”

The upper bound, meanwhile, is right around what environmental groups had previously recommended as a minimum value. And it’s less than a third what the EPA recently estimated a ton of carbon dioxide would cost under the the Lieberman-Warner bill. Granted, EPA was measuring the costs of reducing global warming pollution while NHTSA was measuring the benefits of those reductions. I’ve never taken an econ class in my life, but I guess I’d assumed that in a functional market there would be some relation between the two.

There’s lots more to discuss in the CAFE proposal (including NHTSA’s refusal to accept the determination of Congress and two district courts that fuel economy standards don’t preempt state controls on vehicle greenhouse gas emissions), but that can wait for another post.

Happy Earth Day everyone.