THE BLOG
07/25/2009 05:12 am ET Updated May 25, 2011

Changing the Climate for Cities?

While most of the country tries to figure out what health insurance exchanges and health insurance cooperatives are (and what exactly South Carolina Governor Mark Sanford was doing in Argentina), Speaker Pelosi has snuck game-changing climate change legislation onto the House of Representatives calendar for a vote -- and likely passage -- this Friday.

In addition to a renewable energy standard, the bill establishes a cap-and-trade system (two, actually: one for greenhouse gases and a separate one for hydrofluorocarbons) designed to reduce emissions 17% by 2020 and 83% by 2050 compared to 2005 levels. Limited emissions allowances will be both auctioned and sold to polluters, who can then purchase more allowances to emit more or sell allowances that are not needed because of energy efficiency improvements.

In recent days, progress on the bill had been stalled by negotiations between Collin Peterson, the Democratic Chairman of the House Agriculture Committee, and Henry Waxman, Chair of the House Energy and Commerce Committee. At issue were the interests of rural constituents. Peterson and other farm-state representatives wanted more emissions allowances to be issued to rural electricity cooperatives and requested that the Department of Agriculture, instead of the Environmental Protection Agency (which is, evidently, in the pocket of large cities), to determine which offsets, schemes that farmers could use to make money by soaking up emissions, are acceptable. Debate, then, in these last critical days has focused on rural areas; the legislation's impact on cities has been largely ignored.

In part, this is because urban and metro areas are better positioned to deal with any price increases that result from the cap-and-trade system. For one, metro areas have a smaller per-capita carbon footprint than rural areas and so on average will be less affected by the cap-and-trade system. But even representatives from older metros in the Midwest and on the Eastern Seaboard, which emit more than their Western metro counterparts because of dirtier energy sources, are less concerned about the legislation than their rural counterparts because the legislation redistributes proceeds from auctions of allowances to utilities according to increases in the price of electricity. Regions that experience more price increases receive more money, which they are required to pass along to their customers.

At the same time, though, the legislation directs significant funds -- 10% of the allowances in the initial years of the program -- to state governments for clean energy and energy efficiency investments. This allocation ignores the leading role that cities have been playing in improving energy efficiency with programs like Chicago"s green roofs initiatives and New York's plan to increase the energy efficiency of large buildings. The stimulus package is already leaning heavily on state governments to carry out energy projects. While city governments have gained experience instituting environmental initiatives, observers voice concerns in The American Prospect that

Even the most competent government agencies have difficulty starting something new, and many state offices squeezed by budget cuts lack enough experienced civil servants to reliably avoid pitfalls.

Finally, as Peterson presses for more concessions to gain farm state votes, he is sapping resources away from the meager allocations currently committed to worker assistance and job training (just 0.5% of allowances). Increased funding for job training in green collar jobs could help revitalize the industrial and manufacturing base as it retools to become more energy efficient, a critical step in ensuring the long-term vitality of the nation's metro areas.