The following is a guest essay by Carl Pope, executive director of the Sierra Club.

There are moments when a choice of pathways shapes the future — and makes success either feasible or impossible.

In light of the fact that all of the remaining leading presidential candidates call for some kind of action on global warming, and the Lieberman-Warner bill is already working its way through the Senate, almost everyone recognizes that sometime in the next few years the United States will limit the amount of global warming pollution that our transportation system, power plants, factories, and other sources can emit.

The most likely mechanism for tackling global warming is a so-called cap-and-trade system, whereby a declining cap is put on total emissions with individual emissions permits being traded amongst emitters. As with most things, the devil is very much in the details. Depending on how it is designed, such a system can be heavily tilted toward the interests of the planet or, as some would prefer, the interests of polluters.

Thirty-seven years ago, a similar choice faced the young environmental movement. Congress was about to pass the regulatory foundation of the environmental age — the Clean Air Act. Environmental advocates sought to require every power plant, refinery, chemical facility, and factory to use the modern pollution control technology then coming onto the market. Industry argued that we should, instead, treat new sources of air pollution differently from old ones — by making sure the new power plants were very clean and leaving the old ones, more or less, alone — because old sources would shortly be retired and replaced with newer, cleaner versions. Maine Sen. Edmund Muskie, fearing that industry would block him on other points, acceded. Environmentalists — including my new-to-the movement, 25-year-old self — went along.

Fast-forward to present day: the carbon industries are lobbying to get a deal done this year that would give away carbon permits free of charge to existing polluters — bribing the sluggish, and slowing down innovation. And politicians are telling us that while it would be better to auction these permits and make polluters pay for putting carbon dioxide into our atmosphere, creating that market unfortunately gets in the way of the politics.

We are being urged to compromise — to put a system in place quickly, even if it is the wrong system. Given that we only have one chance to get this right before it’s too late, our top priority must be to make sure that we do not settle prematurely and sign a weak bill into law in the name of doing something about global warming. With momentum for strong action and a friendlier Congress and White House building every day, it’s no coincidence that some wish to settle their accounts now.

Here’s what then-CEO of Duke Energy, Paul Anderson, said last year about these giveaways: “Whatever we come up with in terms of solutions has got to avoid a political grab bag like what happened with the sulfur dioxide cap-and-trade system. If you were emitting so many tons of SO2 as of the baseline year, you got X number of allowances. If you cut back on emissions after the baseline year, you could sell your excess allowances to somebody else. This scenario, whether for SO2 or for carbon, actually creates an incentive to do nothing that reduces your emissions before the system is in place because you might be forgoing a tremendous asset.” Under the Lieberman-Warner bill, there would be a four-year period in between enactment and the implementation of the emissions cap.

In order for the Sierra Club to support an effective global warming bill, it must fulfill the following four objectives:

  • First, the targets and timetables must be sufficient to do what the science demands in both the near and long terms to reduce the negative impacts of climate change to the maximum extent possible. This will require reductions in total emissions on the order of 80 percent by 2050 and 20 percent by 2020.
  • Next, permits to emit carbon must be used for public benefit, not private windfalls. Pollution allowances are a public trust. All allowances should be auctioned or otherwise used to benefit the public, not to generate windfall profits for polluting industries. Free allocations, if any, must be limited in size and restricted to a short transition period.
  • Revenue raised by the bill should be used to promote a clean energy future by investing in the highest-value solutions for emissions reductions first. These funds should not be used to perpetuate dirty, expensive, outdated technologies like coal and nuclear energy. Allowances and auction revenues should be used to accelerate deployment of the clean energy technologies we have today and to develop the ones we need for tomorrow. Funds should be invested only in the cleanest, cheapest, safest, and fastest means of reducing emissions.
  • Finally, the bill must ensure a just transition for workers, protect vulnerable groups, and help induce world action. Allowances and auction revenues should be used to protect low- and moderate-income citizens from rising energy costs and other negative economic impacts, create new jobs, ensure fair treatment for affected workers and their communities, and drive technology transfer to help achieve emissions reductions around the world. We must also take care of communities that suffer the impacts of global warming we were too late to avoid.

This time if we get it wrong, we can’t argue we didn’t see it coming. If we choose an allocation system when we cap our carbon emissions, instead of making the polluters pay for what they emit, we will again slow down progress — when we have no time to waste. The climate recovery movement can’t afford to be on the wrong side of history — it needs to do everything within the power of human ingenuity to speed up new energy sources and shut down dirty ones as fast as new ones can be built. We need a superhighway to innovation — and allocated permits are like speed bumps in the fast lane.