(The author is a Reuters market analyst. The views expressed are his own.)
By Gerard Wynn
LONDON, Feb 7 (Reuters) - Climate change will not be a top issue in the United States under President Barack Obama, despite the soaring rhetoric in his Inaugural Address last month.
Past failure to pass sweeping U.S. climate legislation will probably instead see his administration target modest, discrete, broadly popular measures on efficiency, fuel economy and long-term tax breaks for renewable energy.
“We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations,” the President said, dedicating to the issue more than a minute of his roughly 20-minute Inaugural Address on Jan. 21.
“That is how we will preserve our planet, commanded to our care by God,” he said, of support for clean energy.
But political advisors, scientists and climate campaigners are still digesting the previous failure to pass a climate bill in 2009/2010, after much hype and expectation.
The prospects for such legislation seemed promising before the success of the Tea Party movement getting a grip on House of Representatives control via hardline Republicans.
Now Obama wants to drive research and demonstration projects, buildings efficiency and use the upcoming corporate tax reform process to try to “level the playing field” for renewable forms of energy, according to Whitehouse advisor Brian Deese, deputy director of the National Economic Council, speaking two weeks ago.
He could perhaps target one or two more ambitious items from a menu including a federal clean energy standard; a carbon tax; or rejection of the Keystone Pipeline.
Harvard University economist Robert Stavins noted the rising polarisation in a recent blog which contrasted the passage of clean air legislation with the ill-fated climate bill.
“Environmental and energy debates from the 1970s through much of the 1990s typically broke along geographic lines, rather than partisan lines,” he said.
The Clean Air Act Amendments of 1990 had 87 percent and 91 percent support among Republican and Democrat senators.
The Waxman-Markey climate bill in 2009 passed the House with the support of 83 percent of Democrats and 4 percent of Republicans and never reached the Senate.
Harvard political scientist Theda Skocpol last month criticised environmental NGOs working under the umbrella of the pro-business U.S. Climate Action Partnership (USCAP) for misjudging an increasingly polarised Congress in the abortive climate bill campaign.
They focused too much on insider bargains with business, ignoring grassroots pressure, she said in her paper, “Naming the problem: What It Will Take to Counter Extremism and Engage Americans in the Fight against Global Warming”.
”The USCAP strategy was based on misplaced hopes for bipartisan bargains and a failure to grasp that support from Republicans was not going to be forthcoming.
“Ideological advocates, carbon industry dead-enders, and populist anti-government forces are the ones who hold sway in the GOP (Republican Party) right now, including billionaire elites and grassroots activists fiercely opposed to any and all government efforts to fight global warming.”
In the absence of comprehensive energy and climate legislation, is there space for compromise on modest measures?
One candidate is longer term support for wind power, which has already split Republicans.
Defeated Republican presidential candidate Mitt Romney last year favoured scrapping a wind power tax credit but Congress extended it under a wider fiscal cliff bill at the end of last year in a rare bipartisan show on clean energy.
Republican support makes sense in states with wind farms and manufacturers but others call it “corporate welfare”.
Ultimately the industry needs more than a one-year extension and a deal could emerge on a so-called sunset clause which phased the credit out.
The American Wind Energy Association trade body said in December it could support a six-year phase-out of the credit, to “sustain a minimally viable industry” but that still faces some Republican opposition amid wider budget clashes.
And the highest-ranking Republican on the Senate Energy and Natural Resources Committee, Lisa Murkowski, on Monday backed an alternative, where renewable energy operators would access a partnership tax structure less onerous than corporate income tax and already available to the fossil fuel industry.
Whether that came close to matching the present $12 billion annual wind production tax credit remains to be seen.
Regarding compromise on fossil fuels, there is already acceptance of shale gas among some environmental groups on various conditions, including: protecting groundwater; cutting upstream emissions of the greenhouse gas methane; and in the long-run curbing carbon emissions from gas-fired power plants.
The World Resources Institute’s Jennifer Morgan verbalised a similar position in testimony to the U.S. House Energy and Commerce Subcommittee on Energy and Power on Tuesday.
There is a limit to compromise on an issue which polarises Congress as much as climate change. Failing grand bargains over a Keystone Pipeline or a federal clean energy mandate, Obama has executive agencies and in particular the Environmental Protection Agency (EPA).
The Supreme Court allowed in 2007 that the EPA could include carbon dioxide among the pollutants which may endanger public health which it can regulate under the Clean Air Act.
The World Resources Institute thinktank on Wednesday detailed how a 2020 U.S. carbon emissions target could be met exclusively through state-level and executive agency action, by-passing Congress.
EPA has already ruled on auto emissions and proposed stiff emissions limits on new coal plants, and the next step, logically, would be to extend limits to existing coal-fired power.
Carbon capture and storage can cut power plant carbon emissions by 90 percent or more but has a capital cost of about $1.5 billion per large coal-fired power plant, and is unproven.
Imposing such tough limits across the existing power plant fleet would require a lead-in of at least a couple of decades, and still inspire a backlash in federal courts on the grounds the EPA exceeded its authority, and from Congressional committees controlling its budget.
Less controversial would be a gradual ratcheting of efficiency standards for everything from trucks through home appliances to buildings.
Comprehensive climate legislation will depend on re-vitalised public urgency on the issue which has waned since 2007, or inspired leadership where the present partisan divide may be a step too far.
Reporting by Gerard Wynn