[Peakoil] Waning US political interest in global warming???

[tuohy]

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PUBLIC POLICY INTELLIGENCE REPORT
07.12.2007
Climate Change: The Consequences of Waning Interest*By Bart Mongoven *

Live Earth, a global series of concerts intended to raise awareness of
climate change issues, has come and gone and probably soon will be
forgotten. Attendance at the venues was satisfactory and television ratings
were low, but not unexpectedly so. Live Earth had the potential to serve an
important role in the re-emergence of grassroots concern in the United
States with climate change, but it appears to have failed in that task. That
project remains undone, and those fighting for the passage of significant
climate change legislation in the United States in 2007 are beginning to
face the consequences of waning public interest in the climate issue. They
are also facing the lack of a coherent grassroots movement in support of
action on climate change.

The move toward legislation in the United States addressing climate change
is nearing a decisive moment. Though public concern remains far higher than
it was a year earlier, the emotion driving the issue has dissipated much
more quickly than it rose. Still, while climate change has emerged as a
top-tier issue, the public's focus is back to the issues that dominated in
2006: immigration, health care and the war.

As a result of the momentum that had built up, politicians in Washington
nonetheless find themselves dealing with the specifics of altering energy
policy -- something that affects almost every industrial sector and every
aspect of life in the United States. The impatient rhetoric that "we must do
something now" has met the Gordian knot that is America's energy system.
Complexity has won, and decision-making has slowed.

In the larger picture, the politics surrounding climate change in the coming
months and years will run on two parallel tracks. One set of debates will
focus in the near term on a political resolution of the current climate
change policy, and another set of debates will focus on how people live
their lives and conceive of their relationship to major environmental
issues. The second track, driven by advocacy of sustainable
consumption<http://www.stratfor.com/products/premium/read_article.php?id=289194>,
is more important. It will determine the long-term future of energy and
global energy policy, but the first is important, too, as it will set the
ground rules for the policies that follow in the coming decades.

Among the most important ground rules will be two issues that arise out of
the federal government's desire to soften the economic impact of emissions
cuts. The first will be the rules governing emissions trading, beginning
with a discussion of carbon credit auctions versus free allocations. The
second will be the issue of "safety valves" and "off-ramps" in the emissions
reduction targets. Both issues are terribly important to the companies,
activists and other interest groups intensely involved in the climate issue.
For the rest of the public, even a basic description of these topics risks
putting the reader to sleep (something that will be tested later in this
piece).

Because these technical issues lack the emotional punch of drowning polar
bears, and because public pressure is not at a particularly high level, the
coming debate over these issues will provide important insights into the
degree to which policymakers themselves have embraced climate change as an
issue. It also will show the degree to which they see climate change as
having become embedded in voters' minds as a key issue. Finally, it will
show the limitations facing climate change activists if political support
remains tepid in the absence of a strong grassroots movement. Through these
two issues we will soon have a valuable barometer of how far the issue of
climate change has come.

*Flagging Interest?*

The U.S. public's interest in and concern about climate change is
dramatically higher than it was a year ago. According to polling data, in
July 2006, 13 percent of Americans were very concerned about climate change
and 51 thought that immediate action was necessary to change energy policy.
Public attention increased dramatically at the end of 2006 and through the
winter of 2007. By April, the peak of public concern, the issue of climate
change was on the cover of Time magazine and featured in almost three times
more news stories in the United States than a year earlier. Polls showed
that 29 percent viewed climate change as the nation's highest-priority issue
(by comparison, 34 percent thought health care was first), and 60 percent
felt that immediate action was required. Congress saw these polls and began
to act.



Since April, however, the issue has cooled, albeit at a higher plateau than
a year earlier. This is because, unlike the war or health care, climate
change does not lend itself to a continual thread of news stories that the
public can see and react to. Continuing carnage in Iraq fuels the anti-war
movement. Every week offers a horror story about the U.S. health care
system, and people interact with the health care system in their daily
lives. Climate change is remote, coming to the forefront only occasionally,
such as in the aftermath of hurricanes. Polls now show climate change is a
top priority for less than 15 percent of the public and less than 55 percent
think that immediate attention is necessary.

To remain on the front burner, a static issue needs clear leadership and a
platform. Immigration, for instance, has the same disadvantages as climate
change, but particularly through the leadership of CNN host Lou Dobbs, it
remains at the forefront of the political debate. Dobbs continually develops
stories about immigration and provides a single strategic focal point for
immigration activists to track. While he is by no means the only voice on
immigration, it is difficult to imagine such a static issue remaining a high
public priority for so long without his leadership.

*The Politics*

When the Democratic Party took power in Congress in January, it made climate
and energy a top priority. House Speaker Nancy Pelosi promised to replace
the glacial pace of operations in the previous Congress with a new, active
gait. Among other things, she promised to pass a comprehensive climate
policy by July 4. Within weeks, this was replaced with the goal of taking
action toward a comprehensive policy by July 4. By May, the goal became
passing a bill (pretty much any bill) addressing climate by Independence
Day, and by July 4 a modest (but nonetheless very important) energy bill had
passed the Senate but not the House.

The lack of decisive action on Capitol Hill coincides with a stall in the
broader public's concern for and attention to the issue. In effect, the
balance of a year ago is beginning to flip. Whereas in 2006 the public
appeared ahead of federal policymakers, Congress is now shoulder-deep in
energy policy while the public's interest in what Congress is up to is
waning. This is not good news for Congress, especially the Democrats, as
this means that the cost of action (action that necessarily will harm large
interest groups) remains high, but the rewards -- in the form of public
approval -- appear to be getting smaller.

Congress' reflexive response to this situation will be to strike a modest
deal as soon as possible. If the public's concern about the issue continues
to wane, the majority in both branches will likely see safety in voting for
a minimal policy that addresses the chief issues raised by climate change
but that does little harm to industry groups and other special interests. In
voting for it, representatives and senators can go to their home districts
having voted to solve the climate issue. For the congressional leadership, a
swift vote has many advantages: It takes a difficult issue off the table and
allows Congress to demonstrate leadership while putting U.S. President
George W. Bush in a difficult political position.

*The Necessity of the Grass Roots*

All of this was
predictable<http://www.stratfor.com/products/premium/read_article.php?id=286865>.
For those trying to win the most ambitious global emission reduction plans,
the current direction in Congress is a disaster. It was obvious months ago
that momentum would stall over the summer.

For those pressing for emissions reductions, Live Earth was only a small
part of the strategy, and it was organized independent of most
U.S.-basedclimate change advocacy groups. Proponents of emissions
reduction
regulations have a number of other events and campaigns planned for the
coming weeks. For instance, within a month, former Vice President Al Gore
will re-emerge as the public spokesman for emissions reductions, though it
will take some time for his influence to ramp up. August also will see the
reappearance of Step It Up, a grassroots campaign dedicated to creating a
U.S.-wide student movement on climate change.

Climate activists' push for an active grassroots effort is driven by the
fear that Congress thinks it can get by with minimal action on climate. The
activists specifically fear the public will see Congress pass modest climate
and energy legislation and conclude Washington has resolved the issue.
Environmentalists may howl in protest, but the public (and media) fully
expects environmentalists to complain regardless of what passes.
Environmentalist complaints -- valid or not -- will fall on deaf ears.

To combat Congress' attempt to get by with minimal action on the climate, an
independent climate change movement not led by environmentalists but by
someone with stature who enjoys credibility with the public is needed. While
the public largely does not trust environmentalists, it is likely at least
to listen to a recognized public figure who appears dedicated to finding
pragmatic political solutions for the climate issue. In effect, climate
activists hope that if the leadership of the climate movement -- distinct
from the environmental movement -- says a bill does not go far enough, the
public will not consider the climate issue a closed case. The suit is
tailored to fit the former vice president -- and he is likely to put it on,
but not for some months yet.

*Allocations and Circuit Breakers*

The debate over allocations of carbon credits and "off-ramps," also known as
"circuit breakers," will test this. In both cases, Congress will face a
terribly complex (mind-numbing to some) debate between activists and certain
industry groups. While neither issue will come for a decisive vote in the
coming months, both are central to bills that have been recently introduced
or that will be introduced soon, so these issues will be at the center of
climate discussions in the coming weeks and months.

Both issues are connected to the emissions-trading system envisioned in most
climate bills. The core of emissions trading is that companies must have a
permit to emit a certain amount of a pollutant (in this case carbon
dioxide). These emission credits can be bought and sold in a market, which
means a credit holder can sell excess credits to a company emitting in
excess of its allocation. As long as the total amount of credits is capped,
the national emission level will be capped.

How facilities match up their credits and their emissions is up to each
company. A company can become more efficient and sell extra credits, or keep
the credits and increase production. Another company can continue with
business as usual and simply buy credits on the open market. The effect of
the cap-and-trade system in climate change is to create a price for carbon.
As the national cap is lowered (to, say 1990 levels from today's levels) the
theory holds that the price of carbon will increase. More carbon polluting
companies will find themselves at a competitive disadvantage against
competitors whose operations are cleaner, because more polluting firms will
have to buy credits on the market, credits their competitors may be selling.


The allocation debate focuses on whether the initial emissions credits
should be sold at auction or whether each company should be allocated
credits based on their emissions in a specific year. Most in business prefer
the latter, an initial free allocation. Companies that have significantly
cut their emissions in recent years would be given carbon credits they could
sell immediately. Companies that have not cut emissions would only have to
begin buying emissions once the system is in place. Not all in industry
support a free allocation -- especially those who have made dramatic
progress over the past 10 to 15 years, because a free allocation probably
would not give credit for long-term cuts. These companies are joined in
opposition to free allocation by environmentalists, who see the system as
giving an advantage to those companies that have done the least in the past
few years to cut emissions. Environmentalists thus prefer that initial
carbon allocations be auctioned.

The other major debate coming soon will address the question of whether the
cap-and-trade system should include mechanisms that would stop the cap from
falling so fast that the economy suffers severe harm. Supporters of
off-ramps, aka circuit breakers, argue that if technology does not come up
with new efficiencies as quickly as lawmakers hope, carbon could become so
expensive that industrial activity could be shut down by climate
regulations. To stop this from happening, proposals such as the one offered
by Sen. Jeff Bingaman, D-N.M., offer to halt the cap's fall if the price of
carbon reaches a level that endangers the economy. Opponents of circuit
breakers argue they would create disincentives for companies to develop new
efficiencies and would also reduce the windfall for those who develop the
most important and lasting solutions to energy generation and efficiency
questions.

Both of these issues are highly technical, too arcane and complicated for
the general public to be expected to have strong feelings about either way.
For those in Congress, the easiest political position is the one that would
ease the burden of compliance. Thus, a bill that cuts emissions and changes
energy policy dramatically still will pass, but it will not be as onerous
for business.

The strength of the current grassroots movement will be apparent in how many
in Congress go against the easy route, either because they firmly believe
emissions cuts must be as pure and unclouded as possible or (more likely)
because they fear angering voters concerned about climate change. While the
effect of the grassroots campaigns could kick in by the end of the year,
they seem unlikely to have much impact for the rest of 2007.

The intervening period presents a unique opportunity to observe how much
pull the climate movement now has, before it is unified and organized around
a clear leadership and goals. We expect it is fairly small, and that the
debates over circuit breakers and allocations will not favor
environmentalists in the coming weeks. If on the off chance Congress is
prepared to take the hard road in 2007, industry will have a strong signal
to fight quickly for whatever it can get -- because when the movement starts
back up, winning concessions will be next to impossible.

*Contact Us*
Analysis Comments - analysis at stratfor.com
Customer Service, Access, Account Issues - service at stratfor.com

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