Obama and House Committee Shake-Up Signal Sea Change in U.S. Climate Policy

This is a joint posting with Joel MeisterRecent announcements of climate-related transition teams and agency director appointments have provided a wealth of information about the prospects for action on climate change by the Obama White House. Bolstered by changes in the leadership of a crucial House committee, the energy and climate change agenda is likely to be a top legislative priority for the new administration. These changes also suggest that climate policies will affect the strategy for economic recovery, as well as a reorientation of US foreign assistance toward climate-sensitive policies that will yield significant benefits for poor people in developing countries.The news began last Tuesday with Barack Obama himself, who delivered a video message (below) to the Governors’ Global Climate Summit convened by California Gov. Arnold Schwarzenegger in Los Angeles. Obama made specific commitments to cap-and-trade regulation with aggressive quantity targets, $15 billion/year for clean technology promotion, and full U.S. participation in global action to address climate change.His speech dovetailed almost perfectly with the relevant parts of our climate change chapter in The White House and the World and our recent blog on climate and energy opportunities for the President-elect. The audience (including Gov. Schwarzenegger) responded enthusiastically to Obama’s clear assertion of the importance of climate change and his prescriptions for rapid action.Perhaps equally important, he is filling posts in his transition team and his future administration with experts whose energy and climate credentials are first rate (click here for the full list of Energy and Natural Resources Transition Team members, with bios, and here for a video of a team meeting).The news media were buzzing last Wednesday, as Obama reportedly tapped Peter Orszag, the current Director of the Congressional Budget Office, to be director of his Office of Management and Budget. Obama made it official at a press conference this morning. Orszag’s name may ring a bell for CGD readers, since he was the CBO official who wrote a Washington Post op-ed this summer about policies to offset increased energy costs from regulation of carbon emissions. We have frequently cited Orszag in discussions of my working paper proposing a per-capita dividend from emissions permit auctions, aimed at ensuring broad support for cap-and-trade legislation (see Why Warner-Lieberman Failed and How to Get America's Working Families behind the Next Cap-and-Trade Bill). Orszag maintains his own blog at the CBO, and we recommend that you check out his numerous posts on climate change. His slideshow for a lecture at Wellesley College on October 27th nicely summarizes his views on human actions that drive emissions, developed-country responsibility, and policies to ease the financial burden on working families from stricter carbon emissions regulation (see a pdf file of the slideshow presentation: Preparing for Our Common Future: Policy Choices and the Economics of Climate Change. Orszag’s importance for the climate change agenda is succinctly explained by The Atlantic’s Marc Ambinder, who points out that he will have a powerful role in assessing the short- and long-term costs of the President’s program:

Orszag has smart and interesting things to say about the intersection of psychology and economics, the long-term vs. short-term effects of climate change legislation, honest budgeting and accounting, and lots more.…The director serves as a key presidential adviser on the economy and is responsible for projecting the fiscal consequences of any presidential decision. OMB would figure out how much Barack Obama's health care plan will cost, for example, as it gets introduced in Congress. It'll score every bill that Congress sends to Obama. It's the repository of policy, responsible for official statements. More to the point, though, is that OMB will administer Obama's transparency agenda. Regulatory reform will originate at OMB.

Enactment of cap-and-trade legislation may face a bumpy road in the next Congress. But the way forward was just smoothed considerably by the unexpected victory of California Congressman Henry Waxman over John Dingell of Michigan for the chairmanship of the powerful House Energy and Commerce Committee. Congressional Quarterly reports that the 137-122 Democratic Caucus vote for Waxman was viewed “as a referendum on the party’s future approach to energy and climate policy, as well as a test of the seniority system the party has long used to select committee chairmen and ranking members.”The committee chair or ranking Democrat since 1981, Dingell has ties to Michigan’s auto industry that many have viewed as weakening past attempts to regulate fossil fuel emissions. Compared to Dingell, Waxman, an aggressive legislator on the environment, will be much more supportive of Obama’s climate agenda and will favor steeper cuts in emissions. Waxman’s victory, along with Senate plans to introduce climate legislation next year, announced last Thursday by Senator Barbara Boxer, chairwoman of the Environment and Public Works Committee, makes it clear that Obama will have powerful champions in both houses of Congress in January.President-elect Obama has not even taken office, but his choice of key advisors and officials leaves little doubt that he intends to deliver change on energy and climate policy. And fortunately, a recent study by the Program on International Policy Attitudes suggests that he’ll have plenty of support, both at home and abroad (see table).It is becoming clear that the Obama administration will enact a sea change in climate policy along with the governments of other developed countries, paving the way for developing countries to join in reducing emissions. This will ultimately reduce the impact of global warming, with particular benefits for poor people in developing countries who will be exposed to its worst effects.