Revving the Climate Policy Engine

All the pieces seem to be falling into place this week.

Even as renewable energy stocks continued to plummet along with the rest of the market—the PowerShares WilderHill Clean Energy Index, which seeks to represent the industry, has declined 37 percent this year—we’re finally seeing some striking signals that at last things will be different when it comes to climate and energy policy.

As recently as last week, my colleague Sheril Kirshenbaum wrote here that while we’re on the verge of a sea change, it was still unclear precisely how the incoming Obama administration would move on global warming.

Since then, the picture has gotten much clearer, especially in Congress. Consider the following three major developments:

First: On Tuesday, President-elect Obama released a video statement for Arnold Schwarzenegger’s Global Climate Summit, taking place in Beverly Hills. Promising that his presidency would “mark a new chapter in America’s leadership on climate change that will strengthen our security and create millions of new jobs in the process,” Obama went on to say that the U.S. would reengage internationally on climate change. As the New York Times noted, these remarks made global warming the “second major policy area” that Obama has addressed since his election, with the first of course being the economy.

Second: Today Rep. Henry Waxman, D-CA, pulled off a stunning and successful challenge for the chairmanship of the House Energy and Environment Committee, knocking out Rep. John Dingell, D-MI, long known as a staunch defender of the sinking auto industry. Waxman, in contrast, has been an incredibly determined battler for environmental protections and scientific integrity, not to mention a relentless exposer of government corruption and an incredible foe of the tobacco industry. This means the chief House committee that will deal with global warming is headed by a very progressive environmentalist and the toughest of fighters.

Third: Today Senator Barabara Boxer (D-CA), chairwoman of the Senate Environment and Public Works committee, announced plans to introduce two major climate bills almost immediately after the president-elect’s inauguration. The legislation would closely align with Barack Obama’s campaign promises for large cuts in greenhouse gas emissions and comes just days after his announcement that global warming denial will cease to be US policy. The first bill Boxer described as a “stimulus” to spend up to $ 15 billion per year on clean energy innovations. The second would set up a cap-and-trade system, run by the Environmental Protection agency, to reduce greenhouse gas emissions. Boxer also announced the title of the first hearing that she will hold in the new year: “How Fighting Global Warming is Good for the Economy and Will Create Jobs.”

Based on all of this, we can make several observations. I have to start with this one: Isn’t California–my home state, represented by Boxer, Waxman, and Schwarzenegger–just amazing when it comes to global warming?

But still more important: After incredible incompetence, denial of reality, and the jeopardizing our future by the Bush administration, it’s clear we’re finally ready to reverse course. Big things are going to happen in early 2009, and now we know it will be Waxman, Boxer, and Obama working together to make it happen. All indications are that they will be taking some very strong steps: For cap-and-trade, Obama wants to cut emissions 80 percent by 2050.

Granted, there are still some pieces of the puzzle to fill in. We don’t know yet who will head the Obama administration’s Department of Energy, Environmental Protection Agency, or White House Council on Environmental Quality.These appointees will play a critical role in determining ultimate U.S. policy in these areas.

We also don’t know how bad the economy is going to look come January. Up until recently it seemed the Dow had found a bottom around 8,000. Now we’re down to 7,500, and still falling.

[At this point, wouldn’t it be nice if President Bush would just announce that he’ll do whatever Obama wants for the remainder of his term, no questions asked?]

At least we know that in January we’ll finally have a bold, government wide effort to stimulate the economy, address our energy crisis, and stop global warming–all before it’s too late.

And let’s hope it isn’t.