It’s been a bad month for cap and trade.

Governor Chris Christie has decided to pull New Jersey out of the Regional Greenhouse Gas Initiative (RGGI), the Northeast’s carbon cap-and-trade program. New Hampshire’s legislature has also voted to leave, though the governor may veto the bill. Other states are considering their positions. As states leave RGGI and its market gets smaller, the advantages of linking up diminish, eroding its economic and political viability. Meanwhile, California’s attempt to implement cap and trade is under attack from the left and, as a result, has hit procedural roadblocks. These events have come as a surprise to many who follow this sort of thing—but are they important? Maybe. Three reactions are possible.

Whatever you read today, you’ll find writers marking Earth Day by taking stock of environmental progress. Some will celebrate how far we have come in the last 41 years: no burning rivers, bald eagles are back, etc. Others will stress how far we have to go, citing biodiversity loss, water crises, and above all climate change. (And if your reading habits are sufficiently diverse, others will argue we’ve gone too far, and that environmental rules are hurting our economy). All of these (yes, even sometimes the third) are partly right, but arguing over which frame is “right,” if any can be, is not that illuminating.

A better way to take stock of environmental progress is to look at the tools we are using. And unfortunately doing that leaves me profoundly depressed. For almost every environmental problem, the best, most cost-effective solutions are rejected in favor of second-bests, hopeful handouts, or inaction.

Would that allow you to sue all those farmers . . . cow by cow, or at least farm by farm? – Justice Scalia

You’re going to put a $20 a ton tax on carbon, and lo and behold, you will discover that nuisance will be abated. And we bring in 15 economists. – Justice Breyer

In oral arguments for AEP v. Connecticut today the Supreme Court today seemed skeptical of Connecticut and other states’ argument that they should be allowed to pursue nuisance suits against major power companies for their GHG emissions. The transcript is available, and SCOTUSblog has a good overview of the arguments. Though making predictions based on oral arguments is dangerous, I will be very surprised if the court allows this case to proceed. But it is much less clear which of the available reasons for halting the case the court will choose. That decision will have implications that extend well beyond the legal details, and choosing one of the reasons—displacement—could even be beneficial for climate policy.

Last year’s Deepwater Horizon oil spill revealed not just technological problems, but policy gaps as well. Among the most notable of these gaps is the federal limit on liability for oil spills, set at $75 million for offshore facilities. This is three or four orders of magnitude smaller than the damages associated with a major offshore spill like Deepwater Horizon, whose damages are estimated in the tens of billions. Firms that cause more damage than the limit aren’t liable, at least not under federal law. It is only BP’s decision to waive this limit that has kept it from being a much larger problem.

But we may not be so lucky next time, and the spill has greatly increased pressure to increase or eliminate the cap. I and my colleagues at Resources for the Future have written on this and, most notably, the President’s Commission on the spill recommended significantly raising liability caps. Congress could not agree on a measure to do so last year, however, and urgency ebbed in the election season. The problem still exists, however, and discussions in Congress have begun again. The latest development is a potential compromise between Democratic Sens. Mark Begich and Mary Landrieu. But unfortunately, this compromise is likely to make the situation worse, not better.

Everything old is new again. Around this time last year, the Environmental Protection Agency (EPA) was in the process of issuing major rules that would lead to regulation of greenhouse gases under the Clean Air Act (CAA). Many in Congress opposed these moves, and sought to delay or halt them. I wrote about these attempts in this space (here, here, here, and here) and, as I predicted, they failed—none reached the President’s desk.

The US was in an awkward position in Cancun. The administration clearly wanted to show leadership, but it was hamstrung by an inability to deliver legislation with any tangible commitments. Since that seemed unlikely to change in the new Congress, US negotiators were left playing defense on the key issue — mitigation.

This makes movement in other areas (such as finance and forests) difficult, though that is in part due to US insistence on parallel, rather than serial, treatment of issues.

It’s a familiar argument: we know that putting a price on carbon will impose economic costs, but we can’t be absolutely sure that major climate change will happen. Therefore, we shouldn’t impose a carbon price, or at least we should avoid doing so in a recession, and be very reticent to do so at any point. The argument strikes many as logical and wise.

It is neither. And it won’t help make good policy or make progress towards consensus on what good climate policy should be.

As you know by now, no climate bill will emerge from this Congress. Most have picked up Lindsey Graham’s metaphor — “cap and trade is dead” — though I prefer to think of a bill as “mathematically eliminated”. In other words, the right reaction is not permanent loss of hope but “wait til next year.” That hope is faint, however, given the likely makeup of the next Congress.

It has not taken long for the process of taking stock and assigning blame to begin. Will Marshall here at Progressive Fix has written on Congress’ failure (and I agree with everything he writes). The New York Times op-ed page has been dominated by pieces on why the bill failed, and who is to blame. Grist summarizes reactions. I don’t have much to add to what has already been said. I’m disappointed, but not surprised, and I think there is plenty of blame to go around. That said, I’m still very optimistic about the prospects for action on climate – and by that I mean specifically a national, comprehensive carbon price – in the relatively near future. I think failure in 2010 is a setback, but will be viewed in retrospect as a minor one. This is little different from the way I felt weeks or months ago, but events of last week seem to have suddenly made me a contrarian. Climate pessimism is the new zeitgeist. So why the optimism? Because changes are coming that make climate action inevitable. The world is moving, with or without the Senate.

When Sen. Lindsey Graham (R- S.C.) recently declared cap-and-trade “dead,” he may have been more right than he realized. Graham was referring to the political prospects for carbon pricing in this Congress, but cap-and-trade has been the tool of choice for limiting emissions of other pollutants — like sulfur dioxide and nitrous oxides — for almost 20 years. The EPA proposed a rule yesterday that could sharply limit the role of trading in markets for those pollutants.

The president had a gilt-edged opportunity last night to show leadership on energy and climate policy. Most everyone who has written about the speech agrees that he let it slip through his fingers.

The president started, of course, with a discussion of the Deepwater Horizon spill and cleanup efforts, only linking the spill to larger questions of energy, energy security and climate towards the end of the speech:

When I was a candidate for this office, I laid out a set of principles that would move our country towards energy independence. Last year, the House of Representatives acted on these principles by passing a strong and comprehensive energy and climate bill—a bill that finally makes clean energy the profitable kind of energy for America’s businesses.

Over the past few weeks, we’ve written a series of posts here detailing the issues that make up climate policy. The result is a climate policy cheat sheet of sorts: a list of these issues, divided into categories based on our view of their importance. Now that the Kerry-Lieberman draft bill has been released, we can use the list of issues to analyze it. Other summaries of the bill are out there, but we hope this one is simple and accessible enough to be useful to non-experts (this is the same goal we had for the cheat sheet itself). While we clearly have a policy preference—the greatest emissions reduction at the lowest cost—we don’t want to analyze or criticize the bill here; we just want to describe it. Other than the preferences and opinions implicit in our issue categories, we’re just giving you the facts here. We hope that sparks debate (even if it’s unlikely to convince you to tackle reading the 1000-page bill itself).

How to tell a good climate bill from a bad one? This PPI series will guide you through the main issues that are likely to arise in the coming weeks as the Senate takes on climate change. Some of the issues that come up will be essential to a good climate bill. Others might get [...]

How to tell a good climate bill from a bad one? This series will guide you through the main issues that are likely to arise in the coming weeks as the Senate takes on climate change. In previous posts, we looked at the crucial, the merely important and the negotiable elements in a climate bill. In this post, the last in the series, we highlight issues that might be popular or politically important, but which actually don’t matter that much for climate results. (To see all the posts in the series, click here.)

As with any big issue in Washington, climate policy has its share of sideshows and special-interest pet projects. If somebody’s favorite policy can be plausibly (or even implausibly) tied to climate, it’s a good bet they’ll attempt to do so. Conversely, if someone wants to hijack the climate debate, they may try to attach an unpopular issue to it. There are also a good number of perfectly well-intentioned ideas that, in reality, won’t make much difference in terms of climate policy.

How to tell a good climate bill from a bad one? This series will guide you through the main issues that are likely to arise in the coming weeks as the Senate takes on climate change. In previous posts, we looked at the crucial and the merely important issues that factor in the climate debate. In this post we highlight issues that matter for climate policy, but will not necessarily make or break it. (To read the other posts in the series, click here.)

So far, we’ve established the absolutely critical aspects needed to make credible climate policy and identified the important features that would make that policy effective. Now we will focus on issues that aren’t quite on the same level, negotiable elements that could still have a meaningful role in determining the long-term viability and effectiveness of a domestic emissions mitigation program. These issues — specifically, price controls and the international implications of U.S. legislation — could become a big part of the political discussion.

How to tell a good climate bill from a bad one? This series will guide you through the main issues that are likely to arise in the coming weeks as the Senate takes on climate change. In this post we highlight issues that are very important — but not quite essential — in climate policy. These ideas will likely play a key role in the eventual passage of legislation from the Senate. (To read the other posts in the series, click here.)

In our last post we identified the two absolutely critical issues for any climate policy: putting a price on carbon and targeting meaningful emissions reductions. Pricing carbon imposes costs on emitters, thereby changing behavior and encouraging innovation, but it will also generate revenues. Once they are generated, who receives them and how they are spent are important elements of climate policy.

How to tell a good climate bill from a bad one? This series will guide you through the main issues that are likely to arise in the coming weeks as the Senate takes on climate change. In this post, we identify the essential ideas that need to be enshrined in any climate bill. These are the provisions that no good climate policy can do without. (To read the other posts in the series, click here.)

Our goal for this short series is to help you cut through the noise. These posts are intended to be a climate policy cheat sheet that will help you decode the discussions. The issues we’ll cover are not equally important — some, like a price on carbon, are integral to the success of any climate and energy policy. Others, like expanding oil drilling, are substantially less significant from a climate/emissions perspective, though perhaps more relevant from other angles (energy security, politics, etc.).

Today is the 40^th anniversary of Earth Day, the first of which took place in 1970 at the beginning of the golden age of environmental legislation in the United States. It’s a telling statement that in the past four decades, the most successful environmental record belongs to Richard Nixon.

Our most disgraced president looks rather hippie-esque when you look at the achievements that passed during his administration: the National Environmental Policy Act, the Clean Air Act, the Clean Water Act, the Marine Mammals Act, the Safe Drinking Water Act and the Endangered Species Act all became law under his watch, and he established the Environmental Protection Agency (EPA) soon after Earth Day One.

The largest problem with efficiency standards is that they encourage increased use of whatever is being made more efficient. If your car is more efficient, it’s cheaper to drive it, and you’ll probably do so more often (and for longer distances). You might even move farther away from work or make other choices that increase your fuel consumption (but not your cost — remember, you’re more efficient now). This is great for you since you get increased utility from driving more, but your vehicle emissions won’t go down as much.

The Environmental Protection Agency (EPA) this week announced that it would not require greenhouse gas emitters to get permits until 2011, a decision that sets the stage for the administration’s regulation of greenhouse gases in the absence of climate change legislation. I posted recently on the EPA’s reconsideration of the “Johnson Memo,” a piece of regulatory arcana that determines when pollutant emitters have to get permits under the Clean Air Act for new plants or major upgrades to existing plants. The EPA’s final version of the memo (cheat sheet here) shows an agency that’s attempting to juggle several imperatives: congressional concerns, industry pressure, and its own mandate to regulate greenhouse gases as a pollutant.

Greenhouse gases (GHGs) are the sexy pollutant. “Traditional” pollutants like sulfur dioxide (SO₂) and nitrous oxides or NOx (which are themselves GHGs, though their climatic effects are not the basis for their regulation) get less attention, with media, legal, research, and to a lesser extent regulatory attention devoted to GHGs. These pollutants have much greater health impacts than GHGs, however. Moreover, how the Environmental Protection Agency (EPA) regulates them under the Clean Air Act (CAA) might shed some light on how they will regulate GHGs under the same statute.