Market-based solutions for defeating a Green New Deal

Here is an update analyzing the subversive uses of market mechanisms by fossil fuel interests. As I wrote about in 2017, the petroleum majors have been exploring faux carbon taxes as a means of undercutting the most important part of California's suite of climate related laws, i.e., non-market mechanisms including restrictive regulatory laws. This tactic of using carbon taxes to dodge mounting litigation and laws fostering an expeditious transition away from fossil fuels is now evolving into a tactic to defeat similarly aggressive versions of a Green New Deal. This may well be a deal that D.C. moderates push to achieve in 2020.

Below is an excerpt from a posting on Naked Capitalism:

 “Big Oil Pushes Corporate-Friendly Carbon Tax in Attempt to Stem Green New Deal Wave” [LittleSis]. “With intensifying demands for bold climate action, the fossil fuel industry and its top allies are lining up behind a corporate-funded, market-centered carbon tax proposal, in an effort to stem the rising momentum around ideas like the Green New Deal and growing shareholder and investor concerns about the climate crisis. Oil and gas powerhouses BP and Shell recently announced that they were each contributing $1 million over the next two years to lobbying efforts for the Baker-Schultz Plan, which proposes an initial tax of $40-per-ton on carbon emissions…. Backed by top global corporate powerhouses, the plan is driven by an industry-friendly logic firmly within the bounds of the neoliberal imagination. For example, under the plan, revenue generated from the carbon tax would be returned back to “taxpayers,” rather than used by the government to oversee an accelerated transition to a system of renewable energy… 
Americans for Carbon Dividends

 (AFCD) is the U.S. lobbying arm for the Baker-Schultz Plan. AFCD appears to be entirely run by the lobbying firm Squire Patton Bogg and several of its top revolving door lobbyists. In addition to the fossil fuel industry ramping up its efforts to promote the Baker-Schultz plan, over a dozen major corporations and corporate-aligned environmental groups just announced a new group, the CEO Climate Dialogue, to promote ‘a market-based solution’ to the climate crisis.” 

The introduction to a paper we recently presented at the Western Political Science Association
meetings in San Diego....

Challenging the California Model for Climate Solutions

Cheri Lucas Jennings, Ph.D.

Bruce H. Jennings, Ph.D.

Abstract

Scientists around the world cite an accumulating body of evidence to urge the 
adoption of dramatic changes in policy to address a worsening climate crisis.
Identifying the precise policies to be pursued, however, is especially 
contentious. California environmental law, often used as a guide by others, is
once again serving as a model for shaping climate policies, including
discussions of a Green New Deal.

Many states are now seeking to implement one or another version of a 
specific California market-based approach to climate change: cap-and-trade. 
A closer examination of this emissions trading law raises serious questions 
regarding both this policy approach as well as the use of market mechanisms 
more generally. Manyof the state’s older, non-market policies for prohibiting 
inherently hazardous activities may provide a more compelling approach for 
addressing the principal sources of climate change; a threat perhaps better 
understood by a different appellation: fossil-fueled crises.

The choice of laws and policies adopted over the next decade may prove 
pivotal for addressing the existential threat posed by fossil fuels. California 
presents an instructive guide regarding the promise as well as treachery 
embedded in the distinctive approaches for addressing rapidly worsening 
global crises.

The Conflicts over Climate Solutions

On February 21, 2019 a youthful group of students made their way to U.S. Senator Dianne
Feinstein’s San Francisco office. Speaking in nervous and tentative tones, they presented
a simple, singular demand: “We want you to support the Green New Deal.”

For many of us familiar with world of politics, this scene is very much the bread and butter 
of office holders everywhere. Such meetings typically afford office holders the opportunity to
demonstrate their political acumen. Carefully listen, ask questions, nod appreciatively, and
thank guests for visiting. It is often a vital opportunity to measure what is going on in the world.

Instead, Senator Feinstein informed the students she had just been re-elected as their U.S. 
senator and they would do better listening to her. Among the many hundreds of thousands 
who subsequently viewed the video clip, her message appeared arrogantly stark: the public, 
not unlike these children, needs to think more carefully about their naive notion of a Green
New Deal and leave the serious decisions to experienced elected officials. As if to 
double-down on this public relations disaster, Senator Feinstein’s staff the very next day 
released a draft version of their more properly considered Green New Deal.

Senator Feinstein’s draft proposal is striking in terms of its simplicity. Whereas the Green New
Deal presented by Congress Member Alexandria Ocasio Cortez et al. identifies broad swaths
of policies ranging from public health and welfare, worker transitions and much more, 
Feinstein’s proposal draws on a mere handful of largely existing laws. And whereas the Green
New Deal demands dramatic reductions in greenhouse gas emissions by 2030, Feinstein calls
for reducing net greenhouse gas emissions no later than 2050.

Many of Ocasio Cortez’ detractors immediately seized upon the seemingly unwieldy
implications of her Green New Deal: vast expenditures creating yet another layer of
burdensome and intrusive regulatory programs. Feinstein’s proposal, by contrast, reflects 
a plan cast by a seasoned legislator: a pragmatic plan merging a handful of new initiatives 
matched with restoring a small group of existing law policies. A closer reading of each 
approach, however, reveals a much deeper divide between the two proposals with respect to
the primary mechanisms for transitioning the national economy away from fossil fuels.

Senator Feinstein’s proposal displays a very different framework for what measures should 
serve as solutions to a crisis threatening the survival of human civilization. Topping the 
Senator’s list of new initiatives is a program largely describing what many regard as
California’s most celebrated climate law: the Global Warming Solutions Act of 2006:

The United States shall reduce net greenhouse gas emissions to zero as soon as 
possible and by no later than 2050, including by:

Instituting a price on carbon that increases over time, impels the cooperation of
foreign nations, and uses revenues to defray household costs and spur new
zero-emission investments;

Dianne Feinstein’s proposal signals a much deeper conflict with the Green New Deal offered
by Ocasio Cortez and colleagues. Indeed, only a few short weeks before rebuffing her
young constituents, Senator Feinstein and her congressional colleagues received a letter
signed by over 600 groups demanding support for a Green New Deal. In addition to
endorsing specific provisions, the groups representing many millions of voters also rejected
failed policy instruments, including “...market-based mechanisms and technology options 
such as carbon and emissions trading and offsets, carbon capture and storage, nuclear 
power, waste-to-energy and biomass energy. Fossil fuel companies should pay their fair 
share for damages caused by climate change, rather than shifting those costs to taxpayers.”
Senator Feinstein’s seemingly innocuous provision for setting a price on carbon based on a
cooperative plan with foreign nations portends a much more contentious debate regarding
the role of citizens, the state, and markets.

The scene vividly displaying a group of young people challenging a powerful political figure
in her office calls forth many different interpretations. Youthful passions versus the sagacity
of the aged; the demand for immediate change versus a patience for incrementalism; casting
out the old and worn versus embracing items of enduring value. In the emerging 
Anthropocene new questions arise about our choices: Are the familiar tools and time-tested
policy approaches simply insufficient to address the fossil-fueled crises of the 21st century ?

Without giving away the lede to this story, 
young protesters around the globe may be on to something….