This is an article that I wrote for The American Prospect in September, 2005, about the politics of energy and climate change in state and local governments.
Laboratories Of Progress
It’s time to look past the blockage in Washington and fight for good energy policy at home.
In the absence of federal progress, state and local governments have emerged as key arenas for policies to address global warming. These policies include strategies to encourage the use of cleaner cars, renewable energy, high-performance buildings, and, most importantly, the proposal to cap carbon-dioxide emissions from utilities in the Northeast. State and local programs won’t lower emissions to a sustainable level without federal and international action. But they are a start that can also help transform public opinion and awareness.
Local and regional government leaders joined the climate-change debate in the early 1990s with the creation of the Cities for Climate Protection (CCP) Campaign. CCP members use a five-step process: making an inventory of greenhouse-gas emissions, setting reduction targets, and drawing up an action plan, plus implementation and evaluation. The action areas include energy efficiency in public buildings and lighting, transportation planning, solid-waste disposal, vehicle fleet management, and mitigation of urban heat concentration.
It is seemingly easier to implement climate-change programs in liberal Seattle; Portland, Oregon; Cambridge, Massachusetts; and Ann Arbor, Michigan, but the program thrives in Salt Lake City, too. The 157 participating cities and counties are scattered across 35 states and include both traditional environmental centers and some less obvious locations. The most successful local programs are those with either strong grass-roots constituencies or committed mayors, like Salt Lake City’s Rocky Anderson and Richard Daley in Chicago. CCP communities are linked by the ICLEI–Local Governments for Sustainability, an international alliance that provides technical assistance. Municipal officials need to hear a convincing argument before they will spend money to address a global environmental threat. Local climate-change activists succeed by connecting the threat of climate change with the high cost of energy, cash-strapped municipal budgets, the health of the economy, and local quality of life.
There are, of course, limits to this approach. Most elected officials plan for the near future measured in budget cycles. They pick the low-hanging fruit where investments in energy efficiency can be recouped quickly, such as substituting light-emitting diodes for incandescent bulbs in traffic lights. They are slower to make the choices that will return their investments over the long haul, like energy-efficient buildings.
State governments, in contrast to local ones, have a larger array of tools at their disposal, with greater control over utilities, building codes, tax incentives, agriculture, and land use. Twenty-eight states have produced climate-change plans, and there are several major regional programs. And unlike the federal response, the states are acting with some bipartisan collaboration.
The states are developing greenhouse-gas reporting mechanisms that build the foundation for future reduction efforts and help businesses identify areas where they can make savings. Twenty-one states and the District of Columbia require that utilities use renewable resources to generate some of their electricity, a renewable portfolio standard (RPS) that was left out of the recent federal energy bill. But activists in Colorado put their RPS proposal on the ballot in 2004, after it was rejected four times by the Legislature. The grass-roots effort needed to overcome utility-industry spending drove up the turnout in Colorado, helping elect a new Democratic U.S. senator, and representative, as well as Democratic majorities in both legislative chambers.
The federal Clean Air Act preempts state regulation of automobile fuel efficiency but allows states to set limits on greenhouse-gas emissions from vehicles. California has long been a leader on this front. With six northeastern states already on board, Washington and Oregon about to join California’s approach, and Pennsylvania and Illinois considering the proposal (plus tough new standards in Canada), the auto industry will find it increasingly difficult to maintain two product lines for each vehicle it manufactures. Automakers instead got the Bush administration to include in its new fuel-efficiency regulations a federal preemption against any state laws that try to reduce carbon-dioxide emissions from cars.
Public-sector pension funds are a growing part of the climate-change debate. State Treasurers Denise Napier of Connecticut and Phil Angelides of California acknowledge their fiduciary responsibility as trustees of their state pension systems, pushing the companies in which they invest to make sure the threat of climate change does not jeopardize their states’ investments. They were among 15 institutional investors asking utilities how greenhouse-gas emissions affect their bottom line and what they are doing to reduce negative impacts. They, and other governmental-fund managers, work with the Investor Network on Climate Risk to develop profitable opportunities in energy efficiency and renewables.
State policy-makers will have their first significant presence at the Kyoto Protocol negotiations, which resume in Montreal this winter when the National Caucus of Environmental Legislators sends a delegation. They will join municipal leaders who participate in the CCP program and can offer an alternative view on climate change for international partners looking to the United States.
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The most ambitious initiative of all is happening in the Northeast. In 2003, New York Governor George Pataki invited his colleagues in the region to enter a discussion now known as the Regional Greenhouse Gas Initiative (RGGI). Eleven states (Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, and Delaware, plus Pennsylvania and Maryland as observers) agreed to discuss the creation of a model regulation creating a multistate cap-and-trade program covering carbon-dioxide emissions from the utility sector.
The RGGI states created a mechanism that brings 24 nongovernmental organizations representing electric-generator, environmental, consumer, and other affected interests to meet with the environmental regulators in the region. A draft of the model rule was leaked to the media in August, and it sets a target-implementation date of 2009.
Under the proposal, carbon-dioxide emissions will be capped at approximately 150 million tons between 2009 and 2015, with a 10-percent reduction between 2015 and 2020. Utilities will be issued permits that can be bought and sold to allow them to reach their reduction goals at the lowest cost. Because greenhouse-gas reductions produce equal benefits for the states regardless of where in the world they occur, the permits could be traded both inside and outside the RGGI region. Emission goals could be reached by offsetting some carbon-dioxide emissions in other sectors of the economy.
The RGGI is designed to be flexible and expandable. It will be able to incorporate other sectors of the economy and other greenhouse gases beyond carbon dioxide; new jurisdictions can join the region, and the permits will be tradable in international markets. The eastern Canadian provinces and the West Coast states are observers in anticipation of an international carbon-trading system in which the RGGI will participate. Much of the international community sees the RGGI as the single most important climate initiative happening in the United States.
The most intriguing aspect of the RGGI is the possibility that the carbon permits could be sold to the utilities on the basis of a “polluter pays” policy. Under the draft rule, 20 percent of the permits would be sold at auction. At current European carbon-permit prices, an auction of all of the permits would generate approximately $1.5 billion. That’s more than double the amount currently raised in the RGGI states by the system benefit charges that fund state energy-efficiency and renewables programs. The carbon auction could generate funds to expand existing programs, provide financial assistance to low-income families struggling with energy costs, or help move workers out of the fossil-fuel industries.
Any program as ambitious as the RGGI faces big hurdles. The process was designed to be a regulatory matter handled by the governors of the region, bypassing the legislatures. But a carbon-permit auction may require legislative approval in every state in the region. The environmental community hurt its chances of success by acquiescing to a process that excluded state legislators.
Winning approval of a strong carbon auction will also be difficult, as opponents will brand it a tax. Various industry groups will try to block implementation of a strong program on a state-by-state basis. If they fail with the governors, they will appeal to the state legislatures, where their strength is greater than the environmental community’s.
The go-it-alone attitude of many environmental group means that as they seek to increase the amount of the carbon permits to be auctioned, they are facing off against industry groups and the state agencies that designed the process, with virtually no support in legislatures across the region.
It is a truism that you should never let a more powerful opponent strike first. But in my state, the Associated Industries of Massachusetts (AIM), the largest employer association in the commonwealth, sent in June a strongly worded statement to Governor Mitt Romney’s administration in opposition to the RGGI. A summary statement was sent to all legislators, AIM members, and opinion leaders. It was the first attempt to frame the issue, and it hit all the right buttons, criticizing the process, the participants, the timing, and the policies of the RGGI. It warns of increased energy costs, economic-competitiveness problems, job losses, increasing costs of health care and management of local government. The environmental community has yet to make any concerted effort to communicate with legislators, falling behind in an area where it starts with a disadvantage.
The problem is compounded by the political ambitions of Governors Pataki and Romney, who represent two of the three biggest carbon-dioxide emitting states. Both are laying the groundwork for presidential campaigns in 2008. They will come under enormous pressure from Republican constituencies to repudiate the RGGI even while they try to achieve something they can call a victory. As lame-duck governors, both will face opposition from industries organizing in their home states. Romney already capitulated once to his national Republican audience when he added language to the Massachusetts climate-change plan indicating that he has doubts about the scientific certainty of climate change. It’s hard to imagine how presidential ambitions won’t further color the process.
One of the hidden giants moving against climate-change initiatives in the states is the American Legislative Exchange Council, or ALEC, which calls itself “the nation’s largest bipartisan, individual membership association of state legislators” and is backed by conservative corporate funding. Donors sit at the table with legislators and draft model legislation and resolutions on state policy. Now 32 years old, ALEC has assembled a network that includes more than 100 of the nation’s state legislative leaders and five governors, in addition to 98 members of Congress.
Not surprisingly, ALEC opposes carbon-dioxide-emission standards, opposes state responses to the Kyoto Protocol, and is in favor of “sound science” in the climate-change debate. You want more information on what ALEC does? Too bad: Its Web site, including all of its model legislation, is password protected and unavailable to nonmembers.
Federal preemption laws remain a potent threat anytime the states move aggressively. The proposal to prohibit state regulation of carbon-dioxide emissions from autos joins other preemptions added in the new federal energy act. These include the placement of liquid natural gas facilities and the construction of electric transmission lines. Previously Congress had preempted state action on auto fuel efficiency, energy standards, and some appliances. ALEC uses its muscle in statehouses across the country to lend a veneer of state support for federal preemption of state authority.
The far smaller National Caucus of Environmental Legislators operates on $150,000 annually but still manages to do serious educational work with legislators. The latest arrival at the state level is the Progressive Legislative Action Network. Unlike many other progressive policy networks, its tax status will allow it to have an explicit advocacy agenda. It sees itself as the progressive alternative to ALEC.
Many of the organizations that work on energy and climate-change policies at the national level have some presence at the state level, including the Natural Resources Defense Council, Public Interest Research Groups, and the Union of Concerned Scientists. They are badly outfunded by conservative and industry-backed groups, though, and have fairly weak grass-roots components. And unlike so many other segments of the progressive community, very few of the environmental organizations have anything resembling an electoral arm. The climate-change community, like all progressive movements with strong legislative leaders, is also threatened by term limits in 15 states. For example, California Assemblywoman Fran Pavley, whose clean-car law is known simply by her last name, cannot seek re-election to the General Assembly. There is no farm team for the next generation of elected climate-change leaders.
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Too often Americans think that “the environment” is found in great parks and forests that we visit while on vacation, the places where we hunt and fish, and that endangered species live in exotic places — that the environment is external to our lives. The current debate about the environment encourages people to think that there is a balance we must strike between prosperity and environmental protection, and most Americans opt for prosperity when forced to choose between the two.
The fossil-fuel industry questions why we should change our behavior at the local level to fix a global problem like climate change. After all, how can my town, my state, address an issue that affects the whole planet? American policy-makers and activists answer the question directly and talk all too frequently about climate-change policy as if it were medicine: Take this now, even though it has bad side effects, to save yourself.
Environmental activists need to better acknowledge that climate-change policy is about economic development. (The Kyoto Protocol is, after all, a massive development treaty.)
The climate-change debate is a disaster in Washington, but it does not have to be in the states. We can make progress, but it requires changes in the way environmental groups approach the issue. Insider discussions about particular policies might allow for incremental victories, but those talks do not change the American view that the economy and the environment are in competition with each other.
The gains made at the municipal level show how we can change both policies and the debate by drawing the connections between a sound energy policy and a stronger economy. Local activists who support CCP programs have had to sharpen their government-finance skills to sell some of the programs. They have learned to talk a language that appeals to people whose primary interests are local and financial and who are not on a quest to protect the world environment.
Many governments are on the way to reducing their emissions and creating the opportunities for families and businesses to reduce their fuel consumption, their costs, and their greenhouse-gas emissions. We can create a new popular language around energy independence, security, and economic growth, with far less of the corporate influence found in the national debate. State and local governments will be the testing grounds for policies and a message that challenges the nation’s disastrous energy and climate-change policy. It is not enough to stop there, but it offers an opportunity to rekindle political interest — and far more promise than the current federal arena.
Jim Marzilli is a Massachusetts state representative and a member of the National Caucus of Environmental Legislators.