Why Warner-Lieberman Failed and How to Get America's Working Families behind the Next Cap-and-Trade Bill - Working Paper 149

July 17, 2008

Many observers have attributed the Senate’s failure to pass the Warner-Lieberman cap-and-trade bill to widespread denial of global warming and disinformation campaigns by energy companies. But, as CGD senior fellow David Wheeler points out, public concern over global warming is now so widespread that other explanations are needed. His econometric analysis of Senators’ votes investigates the role of concerns about higher energy costs in states that are relatively poor or dependent on fossil fuels for power production. His results indicate that state-level per capita income and fossil fuel dependency strongly affected votes on Warner-Lieberman, along with Senators’ degree of political conservatism. After accounting for these three factors, Wheeler finds that Senators’ votes were not affected by their party affiliation, gender, campaign contributions from the energy sector, or their states’ susceptibility to the risks of climate change.

Wheeler’s results indicate that the energy cost concerns of America’s working families have had a particularly strong impact on Senators’ votes. To meet these concerns, he suggests that the next cap-and-trade bill include a provision to distribute the proceeds from emissions permit auctions directly to U.S. citizens in equal per-capita payments. This provision will fully compensate working families for higher energy costs under Warner-Lieberman, and it should help to align their interests, and the interests of their Senators, with the need to rapidly cut emissions.

See also this related blog posting: Gore Urges End to U.S. Fossil Fuel Power in Ten Years--Here's How to Get America's Working Families' Support

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