Senators Kerry and Graham’s recent opinion editorial, “Yes we Can (Pass Climate Change Legislation),” (October 11, 2009), and show of bipartisanship ignited thoughts that consensus on comprehensive climate change legislation this year might yet be possible. Admirable as that goal may be, we should not hold our breath.

Regardless of how likely or unlikely it is that Congress will pass climate change legislation this year or next, or the year after, one thing is clear – climate change and the challenges and opportunities it presents are real and will be with us for some time.

Fortunately, the same can be said of natural gas. Natural gas gets short shrift in the national debate on how to address climate change even though it’s the cleanest of all fossil fuels, containing just one carbon atom. It’s abundant – study after study shows the nation easily has a 100 year supply, and that number is likely to grow. It’s domestic – 97 percent of the gas we use is produced in North America. And it’s efficient – over the past 40 years, while the number of natural gas customers has doubled, actual gas use and greenhouse gas emissions have remained essentially flat.

Even with those incredibly positive and unarguable facts to support it, natural gas too often takes a backseat to other traditional fuels that do not possess the immediate climate-change and efficiency benefits it does – it can benefit us right now, not tomorrow or 10 years down the road. Even senators Kerry and Graham have managed to ignore the benefits of natural gas and have instead stated emphatically (in their bipartisan opinion) that “The United States should aim to be the Saudi Arabia of clean coal.”

The United States should not aspire to be the Saudi Arabia of clean coal . . . or nuclear, or renewables, or natural gas for that matter. The United States should aim to be what it is, and what it is counted on being, a leader among nations. We have the wherewithal and the technology to use all of our many abundant resources and should not shackle ourselves to any singular fuel or aspiration.

The United States and Congress have a tough road ahead, one that is not likely to culminate in a Copenhagen solution. To meet the energy challenges we face now and in the future, we will need our best thinkers to develop the best plans—plans that make full use, and best use, or every fuel available, including natural gas, nuclear, renewables and even clean coal. Any climate change legislation we pass should be mindful of that.

The Kerry-Graham grand alliance is only a game changer for those who practice suspending disbelief. Politics is supposed to be the practice of addition; not subtraction. I cannot understand how anyone could conclude that adding provisions for nuclear and offshore drilling will move the Senate closer to 60 votes. The environmental zealots in the Senate and their supporters are adamantly opposed to both nuclear power and more domestic oil production. So, from my perspective, the Kerry-Graham road will lose votes; not gain them.

Senator Graham deserves some credit for trying to find a path forward but an effective compromise cannot be built on a flawed foundation. Study after study has concluded that cap and trade is not a cost-effective strategy for addressing global warming and yet Congressional advocates ignore that reality while pursuing a clearly flawed policy; one that has not worked in Europe and won’t work here.

Senator Graham bases part of his support on the need to address energy security which is an important national objective. We need more nuclear energy and more domestic oil production to reduce the growth in imports and create more jobs here instead of in foreign oil producing countries. But, cap and trade advocates don’t want more domestic production. Their objective is to mandate a reduction in fossil fuel use with little regard for the economic consequences. Their belief in that alternatives will magically appear is a triumph of wishful thinking over experience and reality.

The recent CBO analysis is just the latest to conclude that cap and trade will cost jobs and reduce economic growth. The American people are showing a growing resistance to the growth in government debt, the growth in government mandates, the growth in government spending and the lack of a return to robust economic growth. The prospect of adding $100-$200 in additional burdens on struggling consumers is almost certainly going to produce another backlash.

The solution to the climate change risk and the growth in greenhouse gas emissions is not to penalize production and economic growth, it is to get serious about policies that work, that promote job creation, and incentives to accelerate the decarbonization of our economy. There are proven measures to do that and one that keeps being tossed aside is a reasonable carbon tax that recycles revenues by reducing a more distorting tax.

An agreement between two Democrat and Republican leaders in the Senate that climate change is a real threat and the the United States must lead is a huge step forward. it is the strongest point of the op ed by Senators Kerry and Graham . Some of the details on efficiency and renewables are also positive.

But the details that are likely to dominate the actual evolution of energy under the approach suggested in the Kerry-Graham op ed are not encouraging. Indeed, they could undermine the very goal of greatly reducing CO2 emissions and also pose grave risks to the taxpayer.

The op ed would put nuclear power reactors and "clean coal" at the center of the new energy picture. Senate energy legislation in the works contains essentially unlimited loan guarantees for nuclear. Given new technology in natural gas production and skyrocketing natural gas reserves worldwide (see the New York Times front page article 10-10-2009), prices of natural gas are unlikely to rise to high levels again. At prices of $7 per million Btu or less, nuclear will be uneconomical relative to combined cycle power plants, even with a carbon price of $35 per metric ton added on. This will probably be true even if the federal government provides loan guarantees. Since the nuclear industry already wants to build nearly three dozen reactors, each costing $6 billion or more -- but only with loan guarantees -- there is a strong likelhood that the financial disaster of the 1980s (Forbes called it the largest managerial disaster in business history) will be repeated. Only this time, it will be the taxpayers who would pick up the tab for up to a couple of hundred of billion dollars of failed loans.

Nuclear plants are not being held up by licensing problems or overregulation. They are being held up because they are too costly and they take too long to build, which makes them even more risky. They are not being bult bbecause private capital does not want to finance them and is waiting for the taxpayer to pick up all the risk, while the private investors pick up all the profit. Does this sound familiar? It describes what has gone on with the Wall Street bailout over the past year. Except this time a bailout is being promised in advance.

"Clean coal" is a contradiction in terms at least until carbon sequestration is securely demonstrated and until a site licensing procedure that will work can be put into place. This will take 10, 15, 20 years. I am not opposed to development of this technology, but we cannot count on it.

The need for CO2 emission reductions is over the next decade. Only efficiency and renewable energy sources can accomplish this. Wind and solar projects take from sixx months to 2 to 3 years. Natural gas can serve as a bridge fuel to a fully renewable energy system, especially in the context of serious efficiency improvements. The Waxman Markey bill has some excellent provision regarding buildings.

We don't need a Saudi Arabia of "clean coal." We already have it in renewables. The wind energy potential of the United States is about equal to all the oil production in all OPEC coutnries. Solar is an even greater resource. For those who doubt that the intermittency problem can be overcome, they can visit the website of the National Renewable Energy Laboratory, where a baseload wind energy system is outlined. It depends only on commercially available technologies.

Bottom line; The announced intentions are good. The goal of reducing CO2 by 83 percent by 2050 is very good. The details are not promising. Indeed, the financial demands of the nuclear industry could suck all the financial air out of the room and leave efficency and renewables marginalized. There is a real world example of that in Finland right now.

Solution: Keep the CO2 reduction goal for 2050, strengthen it at least somewhat for 2020. And become a leader in a renewable, efficicient smart grid energy system.

The Union of Concerned Scientists (UCS) and others who want Congress to take action to curb global warming were pleased to see that the Kerry-Boxer bill has a stronger emissions reduction target than the House bill. That target -- cutting emissions 20 percent by 2020 -- shouldn’t be weakened. Short-term emissions reductions are going to put us on the right path to achieve the deep cuts we need to avoid the worst consequences of climate change. This target will send a strong signal to companies and homeowners that it’s time to invest in clean energy technologies, which can spur economic expansion and job growth. Moreover, a strong short-term target would give the United States more credibility and greater influence on international climate negotiations.

Another provision that would help bring developing countries on board an international agreement would set aside allowances under a cap-and-trade system to fund projects curbing tropical deforestation. A section in the Senate bill cites the goal of reducing emissions from deforestation, but it doesn't spell out how many allowances would be set aside for this purpose. The Senate should ensure tropical deforestation receives at least 5 percent of the allowances under the bill, as the House did in its version. Because tropical forests sequester large amounts of carbon, they are key to stabilizing our climate. Protecting forests will serve the interests of the United States and the world. The bill should also include provisions to aid nations with adapting to climate change and developing their own clean energy sources.

There are other provisions in the Kerry-Boxer bill that lawmakers should reconsider. For example, the bill would give large taxpayer subsidies to coal carbon capture and storage (CCS) projects over the next few years, before the technology is likely to prove its worth. The CCS subsidies should go to a limited number of demonstration projects to test the technology’s commercial viability so as to not shortchange proven low-carbon energy sources.

The bill also includes two new programs that would benefit the natural gas industry. These provisions are not well fleshed out. Natural gas power plants will already benefit from a carbon price. Providing a disproportionate amount of subsidies for natural gas use could distort energy markets and undermine investments in cleaner technology. The natural gas provisions should be more clearly defined in terms of their scope and intent and should be more tightly focused to ensure a smooth transition to a clean energy economy.

Finally, the way the bill defines how the federal government should incorporate the latest climate science should be improved. The Senate bill's “science review provision,” like the one in the House bill, would require the Environmental Protection Agency to review the latest climate science and the National Academy of Sciences to review technological developments and make recommendations to the president. If the NAS finds that further emissions reductions are needed, the president can propose new legislation to Congress. But this provision should add a requirement for Congress to quickly respond to any such legislative proposals.

For more information, see a UCS summary of key provisions in the Kerry-Boxer Clean Energy Jobs and American Power Act and detailed comparison (pdf) of the Senate bill with the House’s American Clean Energy and Security Act.

For the 4 pillars of Kerry-Graham - revitalized nuclear, the Saudi Arabia of clean coal, border taxes, and price collars - the beauty is in the details. For the first two, the question is how much base load capacity do we really need if financial incentives are changed from rate base to demand management? For the third, the concept of a globally coordinated border tax might avoid the trade war that a unilateral one risks. But the fourth pillar is where details matter the most - the dynamic process of a co2 market driving investment to find the cheapest abatement alternatives could easily be neutered by a low cap price where risk-averse emitters pay-to-pollute rather than invest-and-abate (and then no green jobs either). A fixed supply of Coupons, issued upfront, is an alternative to a price cap that would let the co2 market perform its raison d'etre (www.nicholas.duke.edu/institute/policy_brief.09.14.pdf ).

I find it hard to believe that Charles Drevna, president of the National Petrochemical & Refiners Association, really believes it’s energy reform that threatens our national security. As Sen. John Kerry (D-MA) and Sen. Lindsey Graham (R-SC) detailed in their op-ed in Sunday’s New York Times, it’s our energy status quo that’s the danger. The senators’ collaboration is a clear signal not only that clean energy & climate action are above partisan politics, but that the Senate can and will pass the Clean Energy Jobs Act this year.

That message is being echoed in cities across the country this month. A veterans group called Operation Free has launched a national bus tour in support of clean energy & climate action. If we can break our dependence on dirty oil, we'll free our foreign policy from ties to the hostile regimes that feed our oil addiction.

The Kerry-Boxer Clean Energy Jobs Act will move America forward in the new clean energy economy, create new jobs and help ensure our country is a leader in developing and selling clean energy technology around the world. Senators supporting the bill have a strong majority of Americans behind them, asking for comprehensive climate and clean energy action now. Americans are ready for a new direction that will repower our economy with clean energy jobs, break our dependence on oil and reduce climate change pollution.

In the findings section of S. 1733, Senators Kerry and Boxer state that “Creating a clean energy future requires a comprehensive approach that includes support for the improvement of all energy sources.” We could not be in stronger agreement. There simply is no silver bullet or one-size panacea to the dilemma before the nation and this Congress, and Senators Kerry and Boxer are to be applauded for recognizing this at the outset.

Just as America is a diverse nation with varying energy needs, demands, infrastructure and resources, any effective legislation that addresses climate change and its many challenges must be diverse and flexible in its approach.

Natural gas currently meets 25 percent of America’s energy demands and is abundant and available now to meet our energy needs. It has also been leading the drive toward energy efficiency and conservation for more than 40 years, because while the number of natural gas customers has increased, actual gas use and greenhouse gas emissions have remained essentially flat.

Natural gas is already the cleanest fossil fuel—it contains just one carbon atom—and combined with new, highly efficient natural gas technologies, natural gas used directly in America’s homes and businesses is the easiest and fastest way to achieve a low- or zero-carbon option. Natural gas should be used as a primary tool to improve environmental quality and improve energy efficiencies in a host of applications.

To that end, AGA proposes a programmatic approach to reducing emissions – one that is focused on appliance efficiency standards, building codes, and utility-supported conservation/efficiency programs –a proven track record for residential and commercial natural gas customers.

Such an approach is only directed at those factors over which natural gas utilities and their customers have some control. AGA asks that Congress recognize natural gas and its many attributes for what they are and support a programmatic approach rather than imposing the higher costs and greater uncertainties that would result from a cap-and-trade approach that attempts to force fit us all into a one-size fits all that really fits few.

The Clean Energy Jobs and American Power Act is the right step at the right time. It will help us revive the economy, reduce carbon emissions before it’s too late to avoid the worst impacts of global warming, and create jobs when we need them most.

The bill will no doubt change as it moves through the Senate. But it is starting off well.

The bill’s target of reducing emissions by 20 percent by 2020 is slightly stricter than the House bill calls for, but still eminently achievable. A recent NRDC analysis shows that the new 2020 target would only increase allowance prices by 6 percent over the modest prices estimated for the House bill.

I am pleased that the Kerry-Boxer bill retains important environmental safeguards to reduce the risk that increased reliance on bio-energy will inadvertently cause widespread deforestation and other ecological damage. This is a significant improvement compared to the provisions that were strong-armed into the House bill at the last minute. Still, a better solution for the climate would be to also cover the life-cycle emissions related to bio-energy within the pollution cap.

The Kerry Boxer bill avoids the overbroad changes to the Clean Air Act that occurred in the House bill: it retains performance standards and certain other tools in the existing law.

The bill also takes smarter steps to ensure market stability, which will protect consumers. Current analysis shows that allowance prices will cost about $10 to $15 in 2012 then rise gradually. But models don’t always reflect the volatility of real markets. Both bills have a pool of allowances set aside so if prices reach a certain level above what was expected, you can buy additional allowances out of the reserve and that will put downward pressure on prices. The Senate bill is much clearer than the House version on this point. In the Senate bill companies can gain access to the reserve pool of allowances if the carbon price reaches $28 in 2012.

This is a tough question to answer right now because we know the bill will change as it goes through the legislative process. Chairman Boxer has already indicated she will produce a Chairman’s mark, so much of what we have seen thus far can and will likely change.

That said, we see plenty to like and dislike. And, of course, there are lots of unknowns. As I’ve mentioned before in this forum, if Congress pursues a cap-and-trade policy, and if it determines to allocate rather than auction emission credits during a transitional period, any no-cost allocations within the electricity sector should go exclusively to rate-regulated Local Distribution Companies (LDCs). In fact, NARUC just released a Frequently Asked Questions document detailing why this is such an important policy [http://www.naruc.org/Publications/FAQ1_Consumer_Benefits.pdf].

We have opposed the allocation of any allowances to merchant generators who have no obligation to return allowance benefits to consumers and could instead increase costs for consumers in a cap-and-trade system. We also have concerns that a merchant allocation will result in windfall profits, similar to what happened in the European Union.

As of now, Kerry-Boxer includes allocations to both LDCs and merchant generators, but does not designate how much each sector would receive. Until we see those details, it will be hard for NARUC to reach any conclusion about the bill. Interestingly, and perhaps tellingly, the draft includes language giving the Environmental Protection Agency and the Federal Energy Regulatory Commission authority to implement new rules for merchant generators if they find evidence of windfall profits. This, of course, begs the question: If there is any risk of windfall profits at consumer expense, why allocate to merchant generators in the first place?

In addition, we are pleased that the draft contains House-passed language establishing a corporation to research and develop carbon-capture and sequestration technologies. We are also encouraged by the recent editorial penned by Sen. Kerry and Sen. Lindsey Graham that stressed the need for nuclear power and a price collar, both of which will reduce the costs of compliance if the legislation is passed.

Still, we have great concerns about the workability of the legislation. As I stated in my last post, this draft and the House-passed bill include language significantly limiting how State commissions can distribute LDC allowance proceeds. Both bills require the benefits to be shared “ratably” and “equitably” within and among consumer classes. They also appear to require that industrial and residential consumers receive a direct cash rebate from allowance proceeds if it is proven that the cap-and-trade system caused their energy bills to increase.

These provisions are problematic because they foster uncertainty and potential litigation. Just who will determine what “ratably” and “equitably” mean, and how will that impact the decision to issue flat rebates when the industrial and residential consumers demonstrate that their power bills have increase? The Senate needs to think carefully before handcuffing State regulators’ ability to ensure that allocation proceeds truly benefit consumers.

Well, there sure are a lot of placeholders in this thing. But on balance, the Kerry-Boxer climate bill provides as good a starting point as any for the imperfect wrangling, posturing, and dealmaking ahead. Whether that wrangling leads to a good bill will depend, then, on how those blanks are filled—and especially, on how the Senate deals with clean energy innovation issues.

Basically, the Senate outline looks a lot like the Waxman-Markey bill that passed the House earlier this year, for better and worse.

Like the Waxman-Markey legislation, the Senate version sets emissions targets (a little stricter than the House standard with a 20 percent emissions reduction from 2005 levels required by 2020 and 83 percent by 2050). Like Waxman-Markey, Kerry-Boxer proposes a pricing and emissions trading mechanism (now called, euphemistically, a Pollution Reduction and Investment tool, with revenue allowances left undetermined). And on those points much attention will need to be focused as the details come in.

But what matters almost more than those issues—in my view at least—is how extensively and smartly the Senate piles onto energy innovation.

On this front, the Kerry-Boxer bill tracks—albeit with few details--both the Waxman-Markey proposal and the Department of Energy’s FY2010 budget request by proposing the creation and funding of a string of energy innovation hubs, a concept informed by an influential MPP paper. Along these lines, climate legislation again appears poised to call on the DOE secretary to establish a new program to competitively award cap-trade revenues to eight innovation hubs--each with a specific technology focus, including renewable power generation; building and transport energy efficiency; smart grid development; more efficient energy transmission and storage; advanced sustainable materials; and water security. All of which is important and good.

But there is work to do: As passed by the House, Waxman-Markey invests far too little in energy innovation, largely because so many of the bill’s carbon-emission permits were given away free to ensure its passage and mitigate its impacts on carbon-intensive activities and places. Assuming an average pollution allowance price of $15, therefore, the House bill will generate just $9 billion annually for technology innovation activities, broadly defined, as notes an analysis by the Breakthrough Institute. That sounds like a lot, but in fact, those numbers pale in view of that fact that my group at Brookings has called for the nation to invest as much as $20 to $30 billion per year on energy R&D alone even as President Obama has called for investing $15 billion annually. And the House bill’s numbers pale further given the fact that cap-trade revenues represent the nation’s best shot at sufficiently funding game-changing innovation in the face of the punishingly tight budgets that will prevail for the foreseeable future. All of which means it’s up to the Senate to change the dynamic and increase those numbers. Specifically, the Senate needs to about double the House’s clean energy innovation commitment.

In view of that, then, Sens. Kerry and Boxer deserve credit for insisting upon the presence of several crucial placeholders for innovation in their bill. However, the future quality of the ultimate bill depends heavily on how well the senators and their colleagues fill in the blanks on innovation. Such specifications will spell out whether or not the bill delivers on the most crucial use of cap-trade money of all—investments to catalyze a radically cleaner energy future.

H.R. 2454, the Waxman-Markey climate change legislation that narrowly passed the House of Representatives in June, represents policy that directly threatens our nation’s economy, our energy security, and American jobs. While the flaws in the House-passed measure are numerous enough to qualify the bill as nothing short of an abject policy failure, unfortunately the authors of the climate legislation proposed for consideration in the Senate chose not to learn from H.R. 2454’s significant shortcomings; nor did they seem to heed the considerable – and highly merited – backlash from consumers after the bill’s House passage.

Among its numerous flaws, the Waxman-Markey legislation poses particular challenges for domestic refiners through its emissions allocation scheme. The bill grants refiners a mere 2.25 percent of allocations, yet under the legislation’s program, domestic refiners are accountable for nearly half of emissions covered under the bill – including those from consumers’ use of the fuels refining businesses produce.

While the Kerry-Boxer bill’s allocation structure remains as yet unclear, the proposal’s emission reduction timetable is even more onerous and stringent than that of the House-passed legislation. In addition, the Senate proposal fails to harmonize existing federal laws specifically by removing the preemption of New Source Performance Standards for capped sources. This means that large facilities will be subject to both the emissions cap and EPA NSPS regulations.

These proposals also threaten to make the United States more reliant on imports of refined fuel products, as domestic refiners – who already face stiff competition from overseas producers – would be subject to such costly, burdensome regulation that many may be faced with the prospect of reducing their operations or even closing their facilities. At the same time, cap-and-trade would ensure both the export of American jobs and increases in consumer costs economy-wide.

The Senate is expected to debate the Kerry-Boxer bill soon. With our economy still in the throes of a severe recession and our nation’s unemployment levels at their highest since the early 1980s, Senators will likely soon be faced with a choice critical to our economic recovery and energy security. While Kerry-Boxer remains short on many policy specifics, what’s clear is that the legislation promises to undermine domestic manufacturing, our economy, American jobs, and our nation’s energy security. Let’s hope that in considering it, Senators will put rational policy ahead of political considerations and ensure the defeat of this harmful, misguided legislation.

Our chief concern is that Kerry-Boxer will advance the same complicated, grossly inequitable provisions as Waxman-Markey, threatening to eliminate millions of jobs, including some of the 9.2 million supported by America’s oil and natural gas industry, and risking sharply higher energy costs for farmers, truckers, the airlines, railroads, and anyone else who relies on petroleum fuels, including most American families and businesses.

According to the U.S. Energy Information Administration, Waxman-Markey could increase gasoline and diesel prices to above $5.00 a gallon and raise household energy costs by as much as $1,870. A study by EnSys Energy found that in 2030 Waxman-Markey could cut U.S. refinery production by 25 percent, slash refinery investment by $90 billion, and double imports of refined products, such as gasoline, as a percentage of fuel use.

While Kerry-Boxer may eventually include provisions that encourage greater use of clean-burning natural gas or even, as has been recently discussed, increased access to America’s oil and natural gas resources – both distinct positives – the legislation falls short in many other critical areas. For example, it would discourage the use of international offsets, which are an important mechanism for reducing emissions and costs. It would fail to pre-empt regulation of greenhouse gases under other laws, which is an invitation to inefficiency and higher costs. And it would exclude U.S. refiners (and only U.S. refiners) – the nation’s most energy-intensive manufacturing industry according to the U.S. Department of Energy – from any yet-to-be-defined programs designed to address international competitiveness issues for energy-intensive industries.

These deficiencies are in addition to the prospect of adopting the same unbalanced approach for distributing emission allowances as in Waxman-Markey, which is the primary factor for the sharply higher petroleum fuel costs projected by multiple studies.

Public opinion polling shows that Americans are skeptical about Waxman-Markey. The similar Kerry-Boxer bill is unlikely to be better received. Despite proponents’ spin, this legislation would be bad for jobs, for consumers and for energy security. We can do better.

The best thing about Kerry-Boxer bill is that it has rekindled the discussion in the Senate in a way that might actually create some movement where things were otherwise stalled - including the possibility of bipartisan participation. The largest challenge to forward movement right now has nothing to do with this bill itself, and everything to do with current priorities, specifically healthcare.

While we’re busy comparing a bill with a 17% reduction against a bill with a 20% reduction, and weighing one tactic against another, the real question is…”are we even in the right neighborhood?”

To have a material impact on CO2 emissions, in the urgent time frame needed, we need to use all mechanisms, public and private, to rapidly accelerate the penetration of energy efficiency and clean energy solutions - at scale. Having this bill introduced now, complete with its placeholders, has established a launching-off point to be improved upon. I’m sure we will all be using our influence and advocacy over the coming weeks to help further shape this into legislation that will be good for our country and our planet.

At this point, we can only characterize this bill is a major step backwards from the House version. It has major segments concerning energy intensive industries missing, and calls for a 20% absolute emissions reduction by 2020. Clearly, a 20 percent emissions reduction by 2020 places a higher burden on our economy in general (compared to 17% in the House bill) and this burden would be particularly acute in the manufacturing sector. For example, does a 20% reduction (vs. 17% in the House) not place even more cost pressure on energy prices? The bill lacks specificity in the energy intensive provisions to give us any assurance that the competitive position of U.S. manufacturers will not be negatively impacted.

Meanwhile, there is only a placeholder for an as yet unwritten border adjustment provision that will be critical to preventing the loss of U.S. jobs and transfer of manufacturing from the United States to nations where the cost impact of climate policy, if any, is much less. Much more needs to be done to make this bill acceptable, and we will be working to address these issues with those Senators who have expressed their commitment to ensuring a level playing field for American manufacturing.

The United States must start somewhere and the best thing about the Kerry-Boxer bill is that it does not exempt all the effective provisions of the Clean Air Act as did the House bill. But the overall greenhouse pollution goals absolutely pale in comparison to what the best available science tells us (i.e., get atmospheric CO2 to 350 ppm or less). So while some environmentalists and analysts are cheering the 20% cuts by 2020 from 2005 levels, the number should be at least 40% cuts in 2020 from 1990 levels. Will this be easy? No. Must it be done to prevent the world from changing dangerously and radically? Yes. My read of history is that the United States can accomplish whatever it puts its collective mind and heart into. The challenge is upon us, and the massive economic benefits of changing our current energy ways is clear. Kerry-Boxer is a baby step, but we need to grow up and face the reality that nibbling around the edges will not work in the long run.

Just as pigs can't fly and houses built on sand don't last long, there's no quick fix for legislation stemming from flawed concepts and unrealistic mandates. Though the Kerry-Boxer bill may contain several individually good ideas, its overall approach to climate policy is fatally flawed.

Time has shown that the cap and trade system of the Kyoto Protocol and the EU trading system does not effectively reduce emissions. Hard targets may be seen as a sign of bold leadership, but in reality they're what Frederic Hayek termed the "fatal conceit." Neither international bureaucrats nor politicians can possess the knowledge necessary to set accurate emission reduction targets a decade or more in the future. The problems witnessed in the EU trading system have demonstrated that there are too many unknowns are further out in time too many unknowables.

Rife with industry exemptions and exploitable loop holes, Europe’s Emissions Trading Scheme (ETS) has led to the flight of capital to other countries, higher energy prices for households, and rampant cheating -- all while falling short of the EU-15's targets and commitments. One of the reasons for these failures is that energy, economic, and political realities have been stronger than acting on the rhetoric of climate orthodoxy.

The notion that emissions can be reduced 20% below 2005 levels by 2020 lacks any connection with reality. For a point of comparison, just look back to 2008; it has taken the worst recession in decades to reduce our annual emissions by more than 2% That's a sobering reminder that deep reductions in emissions are inconsistent with a growing population, the economic gains expected by the American public, and energy and technology realities.

The Congress and the Administration would serve the American people and the global community better by admitting what most serious people recognize: we currently do not possess the technology or energy alternatives to make absolute emission reductions while meeting the aspirations for a growing standard of living. At best, the growth in emissions can be slowed until such time as low and no carbon alternatives to fossil fuels can be developed and made commercially available.

In 2005, the proposed Hagel-Pryor energy legislation laid out a plan for technology development and deployment that offered a great deal of promise. Some of their ideas were incorporated in the Energy Policy Act of 2005. I think that the Senate would do better by examining the provisions of that legislation to make sure that they have all been implemented and working as envisioned and then reconsider the other provisions of the Hagel-Pryor bill before venturing further down the road they are on.

Instead of digging a deeper hole with flawed and unrealistic notions of how to address the climate risk, the Senate should stop digging and focus on actions that have a strong scientific and factual foundation and a good likelihood of working. Actions that impose large costs on the American economy and taxpayer and enrich traders and rent-seeking special interests don’t meet that objective.