Full Disclosure: Using Transparency to Fight Climate Change
An essential first step in any effective climate change policy is to require major contributors to fully disclose their greenhouse gas emissions.
Congressional leaders are finally working seriously on long term-approaches to counter climate
Full Disclosure: Using Transparency to Fight Climate Change
An essential first step in any effective climate change policy is to require major contributors to fully disclose their greenhouse gas emissions.
Congressional leaders are finally working seriously on long term-approaches to counter climate change. But all the major proposals leave a critical policy gap because they would not take effect for at least five years. Meanwhile, U.S. greenhouse gas emissions continue to increase, and company executives continue to make decisions that lock in the emissions of future power plants, factories, and cars.
Congress could fill that policy gap now by requiring greater transparency. In the immediate future, legislating product labeling and factory reporting of greenhouse gas emissions would make markets work better. Such disclosure would expose inefficiencies and allow investors, business partners, employees, community residents, and consumers to compare cars, air conditioners, lawn mowers, and manufacturing plants. As people factored that information into everyday choices, company executives would have new incentives to cut emissions sooner rather than later. Greater transparency would also help jump start whatever cap-and-trade or other regulatory approach emerges from the current congressional debate. A carefully constructed transparency system is therefore an essential element of U.S. climate change strategy. Such a system would fill a legislative void and provide immediate benefits as Congress continues its debate.
Congress is debating long-term approaches to climate change. Barbara Boxer (D-CA), chair of the Senate Environment and Public Works Committee, and John Dingell (D-MI), chair of the House Energy and Commerce Committee, are holding wide-ranging hearings, and Speaker Nancy Pelosi (DCA) has created a select committee to coordinate climate change action in the House. Three major bills propose variations on a cap-and-trade approach to cutting greenhouse gas emissions. All combine industry emission limits or “caps” with government-created markets for trading emission permits. The bills differ mainly in the progressive severity of caps and in how they are set. The most ambitious proposal, introduced by Boxer and Sen. Bernie Sanders (I-VT), proposes caps that would reduce emissions to 80% below 1990 levels by 2050.
Ironically, though, even if the 110th Congress approves some variation on a cap-and-trade approach, the new law will not create any immediate incentives for manufacturers, power providers, factory farms, and other major contributors to reduce emissions. If President Bush signed such legislation in 2008, his action would only signal the beginning of another debate over the rules that would govern the system. That debate is likely to be long and acrimonious because the fine print of the regulations will determine which companies are the real winners or losers from government action. Regulations will govern the mechanics of trading emission permits, the allocation of “caps” among industries and companies, and the timing of compliance—all costly and contentious issues for energy-intensive businesses.
Such delay may be inevitable but its costs will be high. Even conservative projections conclude that U.S. greenhouse gas emissions will continue to increase rapidly during the next decade and will produce increasingly serious consequences. The administration’s latest climate action report, circulated in draft, projects that a 19% increase in emissions between 2000 and 2020 will contribute to persistent drought, coastal flooding, and water shortages in many parts of the country and around the world. That increase could be as high as 30% under a business-as-usual scenario. The U.S. Environmental Protection Agency (EPA) reports that carbon dioxide emissions, the most common greenhouse gas, increased by 20% from 1990 to 2005, and emissions of three more potent fluorinated gases, hydrofluorocarbons, perfluorocompounds, and sulfur hexafluoride, weighted for their relative contribution to climate change, increased by 82.5%. The United States still holds the dubious distinction of being the world’s largest producer of greenhouse gases.
Each large contributor to increasing U.S. greenhouse gas emissions has a unique story. Carbon dioxide emissions from generating electricity, responsible for 41% of total U.S. emissions from fossil fuel combustion in 2005, continue to increase faster than energy use because dramatic increases in the price of natural gas have led some power providers to increase their reliance on coal. The most recent estimates of the federal Energy Information Administration project that such emissions will increase 1.2% a year from 2005 to 2030. (The burning of petroleum and natural gas results in 25% and 45% less carbon emissions per unit respectively than does the burning of coal.) Power companies are investing now in facilities that will shape the next half-century of electricity generation—and the next half-century of greenhouse gas emissions. Many of the more than 100 new coal-fired power plants on the drawing boards will have useful lives of 50 years or more.
Carbon emissions from the incineration of municipal solid waste, not even including paper and yard trimmings, increased 91% from 1990 to 2005 as more plastics, synthetic rubber, and other wastes from petroleum products were burned. Carbon emissions from cement manufacture increased 38% as construction activity increased to meet the demands of the growing U.S. economy. Carbon emissions from the burning of gasoline, diesel fuel, and jet fuel to power cars, trucks, planes, and other forms of transportation increased 32% during the same period because of increased travel and “the stagnation of fuel efficiency across the U.S. vehicle fleet,” according to the EPA.
Executives will need powerful incentives to alter current plans in orde