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A Climate Bill to Punish BP and Benefit America

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Public outrage at the tragedy in the Gulf may finally break the fossil fuel industry's special interest stranglehold on Washington. The most far reaching punishment to BP and the other culprits would be an economy-wide shift to clean energy that prevents polluters like BP from profiting from the new price on carbon by returning the windfall back to the American people.

Six months ago, I attended a conference for organizers working on national climate legislation in DC. We were jaded by the giveaways and offsets in the Waxman-Markey climate legislation, and were worried by President Obama's embrace of "clean coal" and offshore drilling. Despite the national security risks of dependence on foreign oil, despite the costs of military activities related to Middle East oil, despite the alarming science and costs of climate change, Americans were still too complacent to support the real carbon price it would take to spur the transition to a clean economy.

Some felt it would take an unexpected tragedy -- a "black swan event" -- to focus the otherwise distracted President Obama long enough to motivate Congress' swing votes and vote counters to pass a strong climate bill that is more than just a few empty slogans about green jobs buried beneath mountains of subsidies for so-called "clean coal."

These were environmentalists, so when they said "black swan," they didn't mean it so literally. They were referring to a 2007 book by author Nassim Taleb. Taleb criticizes statisticians, economists, and the finance industry for ignoring important but unusual occurrences. For Taleb, a "black swan event" is something totally unexpected that changes people's conventional wisdom. Taleb writes about how the discovery of black swans in Australia upended the theory that all swans must be white. For centuries, Europeans considered a non-white swan to be as improbable as a flying pig.

In this case, our government's failure to stop the BP oil spill is troubling because it calls into question the American subconscious metaphor of government as competent parent. The surprising amount of destruction in the Gulf is alerting the public consciousness to the danger of a fossil-based energy system. Thomas Friedman has been pleading with Obama to seize the moment.

As the catastrophe drags on, thoughts are beginning turn to the appropriate punishment for BP. Slate offers some options including public humiliation such as "tar and feathering" BP executives.

Other ideas include nationalizing BP, banning them from doing business with the U.S. or at least placing them on probation, forcing BP to fund a green (black?) jobs program to hire displaced workers to clean the wetlands and beaches. Slate commenters suggested shutting down all drilling and production in the Gulf until the spill is contained to provide an incentive for other oil companies to contribute to the clean up effort. Criminal penalties for BP executives and directors could include jail time. Another interesting approach would be to require on-camera apologies to the American people.

Another Slate commenter would have BP pay the cost of redeploying 50,000 US military and earth moving equipment from the Persian Gulf to the Gulf Coast. The troops are welcomed home, and America saves face and money. On a related note, the BP spill could be a good excuse for Obama to declare war on oil. In a reversal of "what's good for GM is good for America," the national guard could be sent out to auto dealerships to deter the American public from buying inefficient vehicles that would increase their fuel consumption. Hey, it's a national security issue. Robert Reich is more practical: put BP in a temporary receivership so the government can take over.

The executives could be forced to forfeit compensation. But the best punishment to BP would be the creation of an economy-wide carbon price that forces the entire fossil fuel industry to forfeit the resulting windfall profits and return them to the American people. One of the two bills currently on the table in the U.S. Senate, the Cantwell-Collins (C-C) bill, would do this. But it must overcome a rival bill from Senators Kerry and Lieberman.

The Kerry-Lieberman (K-L) climate bill is known as The American Power Act, but a more appropriate name might be The American Power (Brokers) Act. It is loaded with giveaways to utilities and "clean coal" orchestrated by "the smooth-talking King of Coal" Jim Rogers of Duke Energy and others. Indefensibly, K-L promotes offshore oil drilling, while also providing some limitations on the promotion. Really? Promoting offshore oil drilling? Now? This is so politically tone-deaf that it is only a matter of time until Senator Kerry is interviewed proclaiming that he supports his own bill but plans to vote against it.

Cantwell-Collins, aka The CLEAR Act, is the only bipartisan climate bill in the U.S. Senate with Republican support. But because it is not loaded down with 987 pages of special interest handouts, it is dismissed by Beltway insiders as a runner-up to K-L. The CLEAR Act would auction emissions permits to fossil fuel companies like BP, return 75% of the revenues back to Americans as a dividend check, and invest the rest in renewable energy and other causes. This is a climate bill that does not promote offshore oil drilling. It would create a carbon price and benefit Americans, not polluters. It could be BP's worst nightmare.

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