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Policy News Update

November 06, 2008

In this issue: [Contract All : Expand All]

THE NEXT ADMINISTRATION: WHAT OBAMA’S WIN MEANS FOR ENERGY AND THE ENVIRONMENT

Throughout his campaign, President-elect Barack Obama has consistently highlighted the importance and immediacy of government action on energy and the environment. He followed in suit during his Chicago victory speech, identifying the economic crisis and climate change as the greatest challenges facing Americans and linking his energy policies with plans to stimulate the economy.

The upcoming administration and Congress plan respond to the economic and energy crises with the following initiatives:

Cap-and-trade legislation: Many experts are looking to the next administration for leadership in the passage of cap-and-trade legislation. Obama’s cap-and-trade plan is aimed at reducing carbon emissions to 80% below 1990 levels by 2050 and requires that all permits be auctioned off. Proceeds from the auctions would be invested in clean-energy projects, habitat protection, and transition relief measures such as rebates for families.

An additional economic stimulus package: To mitigate the current economic crisis, many democratic lawmakers are in favor of an additional economic stimulus package that would create jobs by financing new energy policies and infrastructural development. Prominent initiatives include: weatherizing buildings, modernizing the electric grid, rebuilding mass-transit systems, and funding renewable energy projects. During his campaign, Obama pledged to create 5 million jobs over the next ten years by investing $15 billion annually in the development and deployment of renewable energy technologies.

Meanwhile, Obama will spend the 76 days before inauguration preparing his new government. His administration will likely reshape the government to tackle climate and energy issues, expanding and integrating top posts in the White House and across the various agencies that deal with climate, energy, and other environmental issues. This could include the creation of new councils, such as a National Energy Council (similar to the existing National Economic Council,) and positions, such as a new Treasury undersecretary post to handle the creation and operation of carbon markets, or a climate-focused czar to represent the U.S. in major climate negotiations. Former Vice President Al Gore has been mentioned as a possible candidate for the latter position, although the Nobel Prize winner has repeatedly told reporters he is not interested in returning to the government.

Helping Obama prepare are two key experts on energy and the environment, both previous Clinton appointees: former EPA Administrator Carol Browner, and former Deputy Interior Secretary David Hayes. Obama has already selected Representative Rahm Emanuel (D-IL) as his chief of staff, but will likely wait to name key Cabinet-level appointees until late November, after he has named his economic team and his secretaries of State and Defense.

Several sources close to the Obama campaign say the president-elect is looking to select someone of high-profile as his Secretary of Energy and a more state-specific expert to lead EPA. The names mentioned to head Department of Energy include two-term Pennsylvania Governor Ed Rendell (D) and two-term California Governor Arnold Schwarzenegger (R).

Rendell told a Pennsylvania television station earlier this year that he would be interested in serving in Obama's Cabinet, particularly as secretary of Energy or Transportation, but that he would first want to finish his term, which runs through 2010.

Schwarzenegger would bring experience in implementing a variety of progressive climate and energy policies, although his status as a celebrity could either act as a distraction from the Obama presidency or draw additional attention to energy issues. Similarly, although he campaigned for GOP presidential nominee John McCain as recently as the weekend before the election, Schwarzenegger’s Republican affiliation could support Obama’s goal of bipartisanship.

Potential picks for the head of the EPA include:

Besides Learner and Lash, all of the individuals mentioned above served under Clinton.

For the Council on Environmental Quality, Learner, Hayes and McGinty have been mentioned as candidates to replace Jim Connaughton, Bush's chairman for the last eight years.

Possible front-runners to head the Interior Department include just-reelected Montana Governor Brian Schweitzer (D), Representative Jay Inslee (D-WA), and former Clinton-era Interior Solicitor General John Leshy, who is now a professor at the University of California's Hastings College of the Law.

THE NEXT ADMINISTRATION: WHERE OBAMA STANDS ON ESA PRIORITIES

Climate change, because of its close connection with the energy debate, is currently the most prominent environmental issue in Washington. The Ecological Society of America’s Public Affairs Committee has identified several other environmental priorities, however, which the Society plans to promote throughout the coming year. In addition to climate change, these priorities include science education, energy development, water quality and quantity, and endangered species protection.

Here is how Obama plans to approach each of these areas:

Science Education:

Energy Development: Invest $150 billion over the next decade in alternative energy projects and the creation of green jobs, with an emphasis on cellulosic ethanol, wind turbines, solar technology, clean coal/clean carbon capture technology, and fuel-efficient cars. Obama has also stated that while nuclear energy projects must be considered as part of any plan for energy independence and emissions control, nuclear power should only be considered a viable area for expansion after cost, safety, waste disposal, and proliferation risks have been addressed.

Water Quality and Quantity:

Endangered Species: In an August 2008 statement, Obama’s campaign stated that if elected, the Senator would throw out the Bush Administration proposal to limit the Endangered Species Act by allowing federal agencies to bypass scientific review when deciding whether or not their projects would threaten endangered species.

REGULATIONS:  ECONOMIC CRISIS SPURS INCREASED REGULATION WHILE UNDERMINING GOVERNMENT’S ABILITY TO FINANCE ECONOMIC, ENVIRONMENTAL REFORMS

The “era of deregulation,” which began during the Reagan presidency, has limited government intervention wherever possible. In the face of the current economic crisis, though, scholars on both sides of the regulation debate have noted a shift towards more regulation, particularly in the financial and environmental sectors. But while the U.S. banking and housing meltdown is driving the demand for more monitoring, it may also dampen the government's capacity to pay for reforms.

Murray Weidenbaum, who served for two years as chairman of President Reagan’s Council of Economic Advisers, has suggested that the U.S. is in the midst of a new wave of environmental regulation, pointing to the Environmental Protection Agency’s (EPA) recent toughening of national standards for airborne lead—the standards’ first revision in 30 years—as a sign of things to come. He also highlighted climate change as an area with great potential for new regulation, particularly in the form of a cap-and-trade system, which President-elect Barack Obama has long supported.

Until the economy rebounds, however, the government will likely be under pressure to minimize spending. The new Congress will face large deficits that may make it impossible to expand regulatory efforts, no matter how strongly supported they are.

Bruce Yandle, who was executive director of the Federal Trade Commission during the Reagan administration, suggests that once the economy rebounds, conditions will be right for reforming the U.S. approach to regulation. While incomes decline, however, he says the public will likely view environmental activity as a luxury.

Meanwhile, the Bush Administration is attempting to push through a variety of last minute rules, such as the easement of power plant pollution limits and the elimination of required environmental impact statements in fisheries management decisions, in order to maintain deregulation in the years to come. According to Obama aides, the president-elect plans to closely review these last-minute changes early in his term. In a September hearing, Senator Barbara Boxer (D-CA) said she was drafting a "roadmap" for the next administration and Congress to reverse some of the changes, such as those currently being made to the Endangered Species Act.

Obama also plans to sign an executive order granting California's long-standing request for an EPA waiver that would allow it to enforce greenhouse gas standards on automobiles, a request that Bush officials previously rejected.

Experts suggest that the new Congress and administration will increase regulation through largely market-based reforms, which should alleviate some of the concerns from those still in favor of deregulation. Obama plans to take a hard stance on carbon dioxide emissions, however, and may instruct EPA to use the 1990 Clean Air act to set emission limits for manufacturers and power plants. While many experts agree that Congress is the best forum in which to reconcile industry and environmental interests, Obama’s advisers have indicated that although the President-elect will encourage a legislative approach to controlling emissions, he will strongly consider regulatory measures if Congress is unable to pass legislation quickly. Rajendra Pachauri, chairman of the Intergovernmental Panel on Climate Change, said this kind of decisive action from the U.S. would help clear the current deadlock in United Nations talks over how to combat climate change. Negotiators from nearly 200 countries will convene in December at a U.N. conference in Poland to discuss limiting global carbon dioxide emissions. The talks are aimed at reaching an agreement to replace the Kyoto Protocol by next year. Although the U.S. needn’t have its new emission control measures in place by that time, experts agree that the country must be able to present a viable plan.

THE ECONOMY: WILL ECONOMIC CRISIS DIVERT ATTENTION, FUNDING FROM CLIMATE CHANGE INITIATIVES?

In a New York Public Library event, a panel of leading economists agreed that massive government spending will be necessary to stave off a devastating recession next year. They advised that while recession in 2009 is unavoidable, the U.S. can rebound and thrive if the Obama administration and the new Congress are able to institute a “major, massive public rebuilding” and a widespread reversal of the current deregulatory ideology.

The economists, investment banker Felix Rohatyn, Columbia University scholar Jeffrey Sachs, and New York University economics professor Nouriel Roubini, described a country in panic, where banks are afraid to make loans, consumers and businesses are afraid to spend, and markets lack confidence in the current administration’s ability to fix matters. The panel was therefore doubtful that much progress would be made prior to Obama’s inauguration on January 20. Even then, they say, the Obama administration and Congress will have to work together on another economic stimulus package that will entail huge amounts of government spending on projects to create employment opportunities and put money into consumers’ pockets. In particular, the economists highlighted renewable energy infrastructure and clean technology as investments with the best potential for long-term success.

House Speaker Nancy Pelosi (D-CA) may attempt to introduce one such stimulus package during a lame duck session, so long as House Republicans and the White House are willing. The session, which is slated to begin on November 17, would focus on passing an expanded version of a package previously approved by the House. This package would invest approximately $30 billion in infrastructure development and the creation of construction jobs; it could include a few environmental initiatives such as water projects, but clean energy measures will more likely be a part of an additional stimulus bill in early 2009.

While stimulus packages may represent the best means of shoring up the economy, they come at a political price: the panel of economists suggested that in order to finance the proposed packages, the U.S. government would need to borrow additional funds, most likely from Asia, and raise taxes on almost all citizens.

CONGRESS: SENATE DEMOCRATS NOW HOLD 57 SEATS, 3 RACES TOO CLOSE TO CALL

Democrats were hoping to pick up 9 seats in the Senate, thus hitting a filibuster-proof 60-seat majority.  After the elections, they hold 57 seats, including those of independents Joe Lieberman (CT) and Bernie Sanders (VT), after the following Democratic candidates won over their Republican opponents:

Races in Alaska, Minnesota, and Georgia remain too close to call—while it is unlikely that Democrats will come out victorious in all of these contests, many are optimistic that they will end up with a few more seats.

Counting is still underway in Alaska, where Senator Ted Stevens (R) is battling for reelection in spite of his recent corruption conviction. Stevens currently holds a 3,000-vote lead over Anchorage Mayor Mark Begich (D) with almost all precincts reporting, but anywhere from 40 to 50 thousand absentee ballots have yet to be counted.

In Minnesota, all the votes have been tallied, but incumbent Norm Coleman (R) has only a 571-vote lead over comedian-turned-politician Al Franken (D). This narrow margin triggers an automatic recount, so the final results may not be known for some time.

Georgia’s Senate race will likely not be resolved for almost a month. Georgia requires senators to be elected by 50 percent plus one vote, a mark that Senator Saxby Chambliss (R) is currently just below. Although there are still absentee ballots to be counted, it is unlikely that they will push Chambliss over 50%. Without the necessary votes, the incumbent will forced into a December 2nd runoff against challenger Jim Martin (D). The dynamics of this runoff could be vastly different, however, without a presidential contest at the top of the ticket.

In 2009, Congress will see more substantial Democratic majorities in the Senate and House, but also a Republican Party that has lost a significant number of the moderate lawmakers most likely to work across the aisle on energy and environmental issues. Without a 60-seat majority, Senate Democrats will therefore still need to win conservative backing in order to end the stalemates that impeded efforts to move legislation in 2008—with a continuation of the energy debate looming, many liberals will look to Republicans like John McCain (NM), who have consistently been sympathetic towards climate change initiatives, for the necessary support.


Sources: Environment and Energy Daily, Greenwire, Politico, BarackObama.com, CNN.com

Send questions or comments to Nadine Lymn, ESA Director of Public Affairs, Nadine@esa.org; Piper Corp, Policy Analyst, Piper@esa.org

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