For the Obama administration, maintaining an appearance of pro-activity with respect to environmental management when compared to the previous administration was never going to a particularly difficult task
Indeed, no matter how messy the approach adopted in the Clean Energy and Security Act may appear to be, the fact that it seems to finally represent some action on the part of the American government towards responding to the challenges associated with global warming is certainly pleasing.
Surely, any form of action at all was always going to beat the ‘zero meaningful action’ policy approach adopted under Bush.
How carbon permits should have been allocated
That said, the approach adopted under the bill toward the allocation of permits for carbon emissions under the proposed cap and trade system appears not only be unnecessarily complicated but also somewhat unfair and lacking in transparency.
As I understand it, one of the key features of the bill is the adoption of a new cap and trade system with respect to carbon emissions, which is envisaged to operate in a manner which is somewhat similar to that currently in place in Europe.
The fairest (and most logical) approach toward the allocation of permits for carbon emissions under this system would be for the government to sell a given number of permits, either each year or otherwise on a periodic basis, via an auction process. Companies would submit bids for a sufficient number of permits to cover their anticipated volume of emissions.
As well as being beneficial for government coffers, since sales of the permits would raise much needed revenue, such an approach would be completely transparent and fair, allowing all firms across all sectors the equal opportunity to secure the required level of permits to cover their anticipated level of emissions, regardless of any political influence or otherwise which is commanded by the industry in which they operate.
But this approach is strange
But instead, under the current bill, the vast majority of the permits issued (approximately eighty-five per cent) will simply be handed out for free, leaving just fifteen per cent to be allocated through a transparent auction process (refer article).
Not only does the idea of doling out free permits to the worst polluters seem to be somewhat strange and contradictory to what the scheme is trying to achieve, but the process of deciding exactly who is to receive such handouts is inevitably political, with some industries being able to secure a better deal than others based on their political power and influence.
Even if it were free of political influence, the process of deciding who gets such permits would appear to be horribly complex, not to mention the lack of transparency from an accountability viewpoint.
Instead, the whole lot should have been auctioned through a straightforward auction process, which would have represented a simpler, fairer, more transparent and better approach.
America must lead, not wait for others
But messy action is surely better than no action, and it is pleasing to see that America finally appears to be on the move with respect to action on global warming.
Kudos to Europe for it efforts to date, but climate change is a global problem in need of a global solution. Any form of effective response to the challenges which it poses requires the support of all major players within the global landscape, not just those of one continent.
In addition, given its status as the single most influential leading nation with respect to many aspects of global society, any lack of action on the part of the emerging or developing world does not provide any form of justification whatsoever for inaction on the part of America. (Equally, inaction on the part of America does not provide any justification for inaction on the part of my home country of Australia)
Leadership is about action. Leaders step out and act first – they don’t sit back and wait for others.
This concept applies not just to individuals, but to nations as well, and given its unique leadership position, America must not wait for countries like China and India to come on board.
Instead, it must step out and join Europe in taking the lead in responding to the world’s global warming challenges, and no matter how awkward its approach, it’s pleasing to see that the American government finally seems to be getting serious in this regard.
Only once the leaders move, will others do likewise.
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