What’s Wrong With Obama’s Green Team?

(reposted from GreenBiz.com)

by Marc Gunther

It’s hard not to be impressed by the people working for the Obama administration on the environment. For the most part, they’re smart, well-intentioned, dedicated. Let’s hope they can deliver meaningful results soon on the issue that matters most: climate change.

Today, I’m at the Society of Environmental Journalists convention in Madison, Wisconsin. It has attracted a parade of administration officials: Tom Vilsack, the agriculture secretary, marine biologist Jane Lubchenko, who leads the National Oceanic and Atmospheric Administration; Nancy Sutley, head of the White House Council on Environmental Quality; Gina McCarthy, an EPA administrator in charge of air quality, and others. Al Gore keynoted, and we heard from economists, scientists and a CEO or two during a very full day.

The Obama people came to sell cap-and-trade, hard. One version of a carbon regulation bill has passed the House, another’s pending in the Senate and the UN meetings in Copenhagen where a global agreement is supposed to be negotiated to replace the Kyoto treaty is just two months away.

Chances are, though, that, the U.S. won’t have legislation by then, which will make it difficult to get a global accord.

That’s because, for all the brainpower and commitment of Obama’s green team, the president has made climate change, at best, his No. 4 priority, behind the economy, health care and the wars in Afghanistan and Iraq. The Republicans haven’t helped on the climate issue, either.

To be sure, Obama & Co. have spent a fortune subsidizing clean energy through the economic stimulus bill. But that won’t be as much help as a cap-and-trade bill with strong targets.

Here are a few highlights from today’s event:

Climate legislation will be good for farmers, even though it could raise the cost of fertilizer and fuel, Vilsack argued.

“It’s one of the best things that can happen to rural America,” he said.

That’s because the carbon offsets in the House and Senate climate bills will generate revenues for farmers. Offsets are a way that regulated industries, like the utilities that own coal plants, can comply with the “caps” on global warming pollutants by paying unregulated entities — in this case, farmers — to reduce their emissions. (Just trying to explain this makes me dizzy.) So, while the costs of fuel and fertilizer will grow because they are made from fossil fuels, the potential value of offsets to farmers could reach as much as $15 billion a year, Vilsack said. To put that in context, he said, net income to all farmers is about $55 billion a year.

In theory, farmers could be paid for a variety of environmentally friendly practices that would reduce their carbon emissions. Among them: no-till agriculture, better conservation practices, applying fertilizer in different ways, capturing methane from pigs, cows or chickens or planting trees on underutilized land.

Vilsack said a “yogurt company in New Hampshire” — presumably Stonyfield Farm — could be paid for developing new feed for cows that reduces their emissions, a polite way of saying their burps and farts would be composed of less methane.

Speaking of cows, EPA doesn’t want to regulate them, says Gina McCarthy, the assistant administrator for EPA’s Office of Air and Radiation.

When asked if EPA will try to regulate carbon emissions from every Dunkin’ Donuts and dairy farm, McCarthy joked: “I am personally going to do that, yes, And I want to make that announcement here in Wisconsin.”

McCarthy, the former head of Connecticut’s department of environmental protection, knows her stuff and talks like a real person, not a like a politician or federal bureaucrat. She said EPA has no desire to regulate global warming pollutants on its own, even though it has been granted the right to do so by the Supreme Court. Of course, that wouldn’t prevent further court challenges. EPA, she said, would prefer to enforce a cap-and-trade system because it’s more flexible, market friendly and likely to drive innovation.

She admitted, however, that managing offsets will be tough, particularly since the legislation is sure to permit international as well as domestic offsets, and allow offsets for both reforestation (planting trees) and avoided deforestation (not cutting down trees).

“Offsets are going to be one of the trickiest pieces of any cap-and-trade program,” McCarthy said. “If they’re not sound and they’re not verified and they’re not credible and they’re not permanent, then you don’t have a cap.”

So how, she was asked, would EPA monitor offsets in such places as Indonesia and Brazil? “It’s my new retirement package,” she quipped. The real answer, she added, is that the government will have to rely on third-party auditors.

Gore bored.

Funny thing about Al Gore. I’ve probably heard him speak a half dozen times, and once spent a couple of hours at his home in Nashville while reporting a story (Al Gore’s Next Act: Planet-Saving VC) for Fortune. I always look forward to hearing him because I so admire his commitment to the climate issue. He’s really smart, too, as well as knowledgeable. And, I sense, he’s fundamentally a good guy.

Invariably, I’m disappointed because he simply cannot talk without pontificating. Today was no exception. Aargh! (If you doubt me, listen here. [MP3 link])

Gore did sound an optimistic note about the potential for a Washington breakthrough over climate, even hinting at one point that the Republicans could become supporters of a bill:

The political system of the U.S. and the world share one thing in common with the climate system — both are nonlinear. The potential for change can build up without noticeable effect until that potential reaches a critical mass capable of breaking through whatever barrier has been holding us back.

We’re very close to a political tipping point.

Was that one Nobel laureate talking to another? I hope so. It’s time for President Obama to move climate to the top of his to-do list, so his green team can have a real impact.

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