I spent the past couple of days in DC, covering the Carbon Tradex Meeting. It was so jam packed with good sessions that all I had time to do was take notes. So over the next week or two I'll be posting from those notes. But a few things that I notice overall bear citing here.
There was a lot of brainpower running around the place as this is a new commodity field that is estimated to be worth somewhere in the trillions. At least a lot of them care about the environment more than other "master of the universe" types. But I was surprised to find almost as much institutional blindness in this group as there is in any other (a lot of re-inventing the wheel because they don't know the history of similar, or analogical fields -- see my session notes about the broadcast spectrum and the organic bill). What it shows is that there is a difference between knowledge and creativity, and long training seems to select for the first (in much the same that science education selects for reductionism).
There did seem to be some meta thinkers there, but I have a feeling that is more about age and broad experience (and at least an open mind) than it is specifically what I am talking about above. Branko Terzic (on the plenary panel) is one of those. That man seems to know something bigger than the facts, and the policy. Another person who seemed that way to me was Debbie Reed, on the farm offset panel, and former governor Bruce Babbit in the third plenary.
The group definitely bifurcates once or twice. There are what I would call infrastructure investment people, and there are offset people; among the offset people there are "hard" offset people and "soft" offset people. Among the infrastructure investment people, I would guess the distinction would be between "new, greener capacity creation" people and "efficiency upgrade and retrofitting" people. Again I am reminded of how the organic people jockeyed and took pot-shots at one another during the crafting of the National Organic Program, without a meta-view of how their actions were mutally dependent and synergistic. One person who seemed to understand this was Frank Tugwell, head of Winrock, who was discreet and demure in his criticism of others.
It seemed that most everybody at Carbon Tradex was okay with the Waxman-Markey draft introduced last week. I would guess that is because they think (rightly) that this is the most progressive take on their pet projects / professions and so they can work with that "clay" the best to mold what they want in a bill. Even the keynote by CEQ chair Sutley was positive on the W-M bill draft.
Another take-home is that even with the diversity of approaches suppored the different groups, any legislation in the US is likely to have an offset component because of cultural and political realities. That is 1) we have a lot of land, and a large portion of offset schemes are land based; and 2) any climate legislation that is going to make it through Congress is going to have to have the support of farm state legislators (especially Senators) and that means benefits for farmers, which means recognition of soil carbon sequestration (SCS). The urban high tech infrastructure types (above) think this is a little flaky, but guess what: they will be forced into supporting it out of necessity.
The sacrificial lamb (currently in W-M) may be international offsets (largely for tropical reforestation and avoided deforestation -- both of which are critical) because they have no real powerful domestic constituency. And the infrastructure types believe that any money for third world energy conservation programs is a diversion because we use the most energy and so we are the low hanging fruit...not a wacked argument, but if they also opposethird world forestry offset they fail to appreciate the contribution of biological sinks, especially in terms of what I like to call "historical carbon." We may end up with a lot of the same kind of craziness that is in the current farm subsidies, but we do need to move from production subsidy to husbandry subsidy if we are not going to value ag and ag land formally within our overt economic system, and this may be the only politically feasible way. The recognition of this is what attracted me to the arguments of Debbie Reed.
Most speakers seemed to think that it was important to "put a stake in the ground" as, it appears, they think the Europeans have done...even though they recognize that the Euros got it wrong. There is a lot of sympathy for the Euros for "going for it" even though there is some remorse for the way that the Euro-Carbon market tanked briefly, because that gives ammo to the nay sayers here [link to the post about the Boehner "cap and tax" bogosity]. The stake in the ground is "monetizing carbon," which will be the first step in commodifying environmental services to convert them from externalities to tradable goods. I consider there to be an ethical cost to this reification, but the trade off would seem to be worth it for the social benefits it brings in a society already so idolatrous that this is really a small incremental change.
Two or three different panelists (on different panels) mentioned that (big) business is getting behind the idea of climate change legislation (especially monetizing carbon) and there is also pressure to resolve from the technology suppliers like Siemens who want to sell the technology of carbon capture and storage (CCS) and renewables to those large businesses and utilities. Their interest in removing the roadblocks to sector growth is fairly obvious.
What the business community wants (variably according their own capital investment horizon or the capital investment horizon of their customers and clients) is "long term price signals" that allow them to do the planning they need to in order to manage their businesses prudently. From what I heard (mostly from private sector consultants) most large businesses are already figuring carbon costs into their planning, but they are anxious about pricing, which greatly affects the output of their models, and thus the quality of their decision making process. So both quantitification and universality (the business meme for "level playing field") are important dimensions for them.
But there is a core disagreement is between people who think that regulation and taxes are the way to go, and those who think that commodifying carbon and market mechanisms are the way to go (this split crosses party and ideo-political lines). Both have valid arguments (which is probably why in a nascent market such as this -- again I think of organic -- people are conflicted) in that there is no question that too specific regulations -- including, as pointed out by some, regulations already on the books -- constrain innovation, but the action of markets is slow and indirect and our problems are quickly approaching the point where we need fast and comprehensive solutions.