Saving the economy in reverse gear? US Congress’s short-sighted engagment with climate change

When the US steel industry recently filed a petition against China, they claimed that the country employed a number of protectionist policies in violation of World Trade Organization rules. Significant policies in question included China’s subsidisation of various technical components used to construct wind turbines produced domestically, which has helped push China to become the world’s leader in wind generating capacity. Although hailed as a victory for free market enterprise after China agreed to halt the subsidies last week, the attack by the US illustrates its unwillingness to move on from its fossil fuel-intensive mode of production and the current state of affairs regarding renewable energy and related climate change policy in the US.

After the anti-climactic withdrawal of the American Clean Energy and Security Act from the Senate in the summer of 2009, the first bill that attempted to institute a cap and trade programme and address greenhouse gas emissions at the federal level, it seems that efforts to thwart climate change have not only completely fizzled in US Congress, but have actually reversed direction. For example, parties in Congress have introduced legislation to either delay or strip the Environmental Protection Agency’s (EPA) authority to reduce GHGs under the Clean Air Act. A bill introduced by the senate will delay EPA GHG regulations for stationary sources for two years. Another bill introduced in the House of Representatives aimed to prohibit the regulation of methane from livestock using the Clean Air Act. Although not all bills aiming to prevent GHG regulations via taxes or market programmes have passed through Congress, it certainly provides insight into the mood of the current Congress in session.

Current legislation and policy have all been enacted under the justification of helping the US’s fragile economy. Upon filing its complaint, steel industry unions argued that China’s alleged protectionist policies cost Americans jobs by providing China with an unfair advantage. Representatives and Senators have introduced legislation regarding the EPA stating that additional taxes would put a burden on American consumers and prevent stimulating the economy. The current Continuing Resolution, which outlines the federal spending budget on government agencies each fiscal year, contains reduced commitments to international climate finance and funding for National Oceanic and Atmospheric Administration Climate Services, illustrating its priority in Congress’s spending scales.

While stunting the opportunity to enter international carbon trading markets and preventing attempts to remove fossil fuel subsidies in order to allow for renewable energy subsidies like China has established, it seems that the US may be missing an opportunity to invest in the future green business and power markets. A recent report by the Pew Charitable Trusts found that due to ‘uncertainties around key policies and incentives’ (or more likely a lack of them), the US’s competitive position in the clean technology centre is ‘at risk’ compared to other countries such as China. This illustrates a point that Congress seems to be missing, namely that meeting international and national emissions reductions goals does not necessarily undermine economic stimulation and growth; production-based incentives and research programmes could be introduced as part of economic stimulus plans in order to involve the US in the new global energy market, ensuring its competitive future.