The challenges facing President Obama at the beginning of his term have been compared with challenges President Lincoln faced at the outset of the Civil War. Both were confronted with a nation divided between the desire to continue the ways of the past and the inevitable realities of the modern world. Today we benefit from a level of equality fought for by Lincoln while facing the new uber challenge: solving global warming.
One elegant way for President Obama to successfully implement a market-based approach to capping carbon, as he requested to Congress in his Congressional Address, is to grab hold of an idea from entrepreneur Peter Barnes called cap and cash back or cap and dividend.
It works like this: a limit is put on the carbon-producing fuels entering our economy. The atmospheric scientists first determine the limit and then 100% of the credits for the allowable amount of carbon-producing fuels are auctioned off each year. The government makes a profit estimated to be around $300 billion and then distributes the revenue to the American people.
The cash comes every month and the payments get higher as the cap on emissions get tighter. It's estimated that a family of four would get about $1,200 a year at first, with some energy conserving actions, a middle-income family can come out ahead financially.
Everyone wins, except the energy companies who think they will line their pockets with taxpayer dollars when energy security legislation finally passes Congress. Their lobbyists are not happy with a cap and dividend approach and are now determined to derail its progress. But their moment has passed. A truly people centered and fair approach to solving global warming which empowers citizens and not polluters is ready for success.
Still, a handful of giant corporations working together under the umbrella name, U.S. Climate Action Partnership (CAP) plan to hold the cap and cash back plan hostage. Many of these companies spent the last thirty years denying global warming only to now put forth a rather suspect solution that won't do enough to actually solve global warming AND will line the pockets of the biggest polluters with billions of dollars from the U.S. Treasury. I call it narcissistic patriotism, salute the flag with one hand while digging the other deep into America's Treasury.
The CAP proposal is loaded with subsidies for projects touting failed science or expensive, unreliable short term fixes and energy sources that simply wont work. Meanwhile, many of the green energy investments laid out in their proposal have already been funded in the stimulus package.
The CAP proposal is analogous to the Lieberman-Warner climate bill, which crashed in the Senate last year because it was riddled with corporate welfare. A wild mix of some good intentions and massive proposed giveaways to the country's biggest polluters led major environmental groups to oppose the Lieberman-Warner cap and trade approach. The Lieberman-Warner bill led to one of the ugliest money grabs I've seen in twenty years in Washington, DC, and ultimately died as the wolves tore the carcass to shreds.
A better way awaits President Obama's attention.
Representative Van Hollen of Maryland has announced his plan to introduce the Cap and Dividend Act of 2009 shortly. Van Hollen's bill is expected to be a simple, fair, effective, market-based, and politically popular bill that has real potential to pass this year. Rep. Van Hollen's plan all but eliminates the corporate feeding frenzy because there is nearly no pie to fight over. No offsets, no off ramps, and no loopholes. Almost all of the money will go straight back into the pockets of the people.
President Obama is at a crossroads similar to President Lincoln's some 200 years before. How we move the economy away from fossil fuels and towards clean energy will be the decision that makes Obama's mark on our modern society. It is up to him to pick the right horse - one that puts money back in Americans pockets while giving back to our planet.