The front page of this morning’s New York Times carries a story on Obama’s budget, which he is set to make public today.
Of particular interest is his proposed cap-and-trade legislation to control greenhouse gas emissions. According to the article, auctioning of emissions permits to industry seems to be taken as a given. A bit more problematic, however, is precisely where he intends to invest the revenues generated from a permit auction.
Fifteen billion dollars will go to fund research into renewable and carbon-neutral energy sources, which is fine. In order to minimize the burden on lower-income people, however, Obama is proposing giving tax credits ranging from $400-$800.
The problem with these tax credits is that they are not tied to particular efforts to reduce greenhouse gas emissions. The money offset by the tax credits can be used for any purpose. A better scheme would link these credits to actual activities that reduce emissions, such as investments in efficiency, installation of residential solar panels, or a public transit subsidy. Such restricted subsidy could also have a greater economic impact. People would only get the subsidy if they made energy efficient purchases.
It makes sense to give low-income earners a subsidy given the likelihood of higher energy costs. But if the purpose of the subsidy is to reduce the burden of these higher costs, it makes sense to give people money that will insure lower energy consumption.
Contrary to my post yesterday that alluded to the US Senate’s “summer” timetable to work on climate legislation, the Guardian and Reuters are reporting that President Obama is softening his stance on wanting to see legislation passed this year.
White House Press Secretary Robert Gibbs apparently was asked directly about the White House’s view on a climate bill timeline and indicated they would like to see it “this year or next year.” The Guardian article quotes Washington governor Christine Gregorie as saying Obama stressed the complexity of climate legislation during a meeting yesterday with governors.
It would not be unexpected for Obama and Congress to punt on climate legislation given the economic condition and the impending federal receivership of large banks that they will have to contend with in the next months. Yet, for a serious global agreement to be hashed out in Copenhagen in December, concrete US action on climate will be invaluable.
The esteemed urban historian Carl Abbott has an interesting commentary at the Boston Herald website on the viability of the auto industry in the 21st century.
His basic thesis: the growth era for automobile consumption has ended in the US. He looks at statistics relating to population growth and the growth in automobile consumption. Like any other commodity, cars went from being a novelty in the early twentieth century to being ubiquitous today. In 1968, the US had a 100 million cars for 199 million Americans. In 2006, by contrast, the population of 225 million Americans over the age of 18 was outweighed by an automobile population of 234 million passenger vehicles.
Obviously, people will continue to buy replacement autos as their cars age, but there does seem to be a limit to how many cars the country can consume.
Is the economic downturn simply accelerating the decline of growth rates in the auto industry that are simply unsustainable?
With Senate Majority Leader Harry Reid predicting that climate change legislation will be considered by Congress sometime this summer, it is never too soon to try and read the tea leaves to see what conflict to expect between Congress and the Presidency.
One major issue in a potential cap-and-trade scheme will involve how emission credits are allocated. The debate generally focuses on whether credits are simply given to industry or are auctioned. Industry–as should be obvious–generally prefers not having to pay for emissions credits, arguing that unknown costs inhibit their planning and could trouble consumers.
Proponents of auctions, on the other hand, argue that a more accurate price point for carbon emerges through auctioning and the revenues generated can be used for easing the transition to a low-carbon economy.
Reid (as far as I know) hasn’t taken a position on the auction issue; but today Obama’s press secretary, Robert Gibbs, seemed to be pushing the need for auctions as a revenue generator. His statement is a bit cryptic, but he indicates the President would likely support legislation that “allowed us to spend even more money investing in alternative energies.”
This is consistent with Obama’s plan hashed out in the campaign to use money earned from emissions credit auctions to specifically finance alternative energy research. This issue of auctioning is going be quite contentious in Congress and the fault line between pro- and anti- auction camps won’t likely match party affiliation.
It might be interesting to listen closely to Obama on this front as he goes to Capitol Hill tomorrow to address a joint session of Congress since climate change is supposedly going to be on his agenda.
As President Obama was signing the new economic stimulus bill in Denver earlier this week that includes $6.9 billion (US) for transit capital projects, Canadian Prime Minister Stephen Harper and Ontario Premier Dalton McGuinty announced a $500 million (Cdn) [$398 million US] investment for a SINGLE transit system as part of their stimulus efforts.
The money is going to the GO Transit system which operates regional service in the Greater Toronto Area (as opposed to the Toronto-dominated TTC).
The comprehensive list of specific projects to be funded has not been announced. But apparently they are planning to spend about 35% of the total to construct 6,000 parking spaces at GO Transit train stations!
I blogged last year about the parking problem at these GO Stations–many of which are sited in low-density sprawlsville. While it is great that there is high demand for transit in Toronto’s suburbs, spending THAT much on expanding parking capacity seems questionable in the long run.
A more integrative approach towards land use might be preferable. This would entail putting investment in higher density, multi-use development at the forefront of stimulus efforts. Expanding the sea of parking around these transit stations will likely degrade suburban neighborhoods and problems with congestion will likely persist.
US Secretary of Housing and Urban Development, Shaun Donovan, has been busy publicizing President Obama’s new foreclosure mitigation plan over the past couple of days.
There has been less coverage, however, of his recent comments on smart growth, urbanism, and sustainability. The Congress for the New Urbanism has a nice rundown of a speech Donovan made at Furman University where he linked housing policy with the effort to reduce greenhouse gas emissions.
Furthermore, Obama has nominated King County, Washington Executive Ron Sims to be the Assistant Secretary at HUD. Sims has been proactive in Washington in adopting emissions reduction policies and is generally thought of as innovative when it comes to developing policies advocating sustainable urbanism.
It appears that President Obama is serious about charting a new course for US environmental policy after eight years of neglect by George W. Bush.
On Friday, he issued a memorandum to Secretary of Energy Steven Chu to prioritize the issuing of federal regulations mandating energy efficiency in major appliances and other products.
The only reason the memorandum needed to be issued was because of the Bush administration’s failure to follow the law. Efficiency standards were first mandated by Congress in the 1970s as a way to encourage conservation in the midst of a global energy crisis. Part of the legislation required that the Department of Energy revisit the regulations periodically to take into account advances in technology.
Before leaving office in 2001, the Clinton Administration began the process of issuing new rules according to statue but Bush nullified them before they were able to go into effect and his Department of Energy failed to issue its own rules. This prompted lawsuits from various states and environmental groups, like the National Resources Defense Council. The legal challenges were ultimately successful and in 2006 the DoE finally agreed to a timetable for issuing the regulations.
The Bush Administration was not known for its alacrity in regulating industry and eventually made no moves to institute the regulations.
Obama, with the stroke of a pen, put the new efficiency standards on the fast track urging that DoE to have them finalized by August, 2009. The standards will result in significant efficiency gains and greenhouse gas emission reductions as new products–such as air conditioners, dishwashers and ovens–will have to become more energy efficient.
The US Senate is likely to pass a stimulus package today or tomorrow setting the state for negotiations with the House of Representatives on a final bill to send to President Obama.
Nothing is finalized yet, but the Financial Times published an interesting article this morning on provisions in the Senate bill designed to help the struggling auto industry. Apparently an amendment sponsored by Barbara Milkulski that will give consumers a federal tax credit for interest payments and the local sales tax incurred when purchasing new automobiles.
Simultaneously, a “cash for clunkers” provision sponsored by Tom Harkin was removed from the bill. Harkin’s provision would have given low- to middle-income consumers up to $10,000 if they traded in an old vehicle and purchased a new US-made, fuel efficient automobile.
Incentivizing more auto dependence is generally a bad idea, given the environmental costs; but at least Harkin’s amendment was tied to reducing emissions. The Milkulski provision apparently will apply to any vehicle, regardless of fuel efficiency.
Harkin’s amendment was problematic to the extent that it limited its focus to US cars. A better approach would be to pass Diane Feinstein’s separate bill, S. 247. I posted last month on her bill which limits the tax credit to fuel efficient vehicles, but also provides a transit benefit for people who don’t want to purchase a new car.
It remains unclear how aggressively Feinstein is going to push the Senate to act on her legislation, but there is evidence to suggest that her scheme could have broader support than Harkin’s protectionist amendment.
The amendments to the Senate stimulus bill are coming fast and furious. BikePortland reports on an amendment introduced last night by Sen. Jim DeMint that would forbid stimulus money from going to bike and pedestrian paths!
This one has not been voted on yet, so there is a chance that senators can be persuaded to vote against this measure.
The US Senate is voting on amendments to the multi-billion dollar stimulus package. They just passed an amendment [.pdf] offered by Sen. Tom Coburn that will prohibit using stimulus funds for municipal parks by a 73-24 vote. This is quite shortsighted given the poor condition of many municipal parks, the consistent demand for upgrades, and the immediate stimulative effect such improvements could have on the economy.
To see how specific senators voted, click here. I am glad to report that my senators Burris and Durbin were part of the sensible minority.
Perhaps this strike against a urban livability agenda will be rectified in conference with the House of Representatives.