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Clean Power Plan will bring back cap-and-trade, Gov. Ritter says

The Obama administration’s Clean Power Plan will revive a “cap-and-trade” system that could not pass six years ago when Democrats held commanding majorities in Congress, former Colorado Gov. Bill Ritter (D) said today.

“Inside the Clean Power Plan there’s a trading platform for states,” Ritter said during a speech to an environmental conference in Ohio, which also featured 350.org founder Bill McKibben and California billionaire environmentalist Tom Steyer.

“If the Clean Power Plan goes forward, there’s a very good chance that states with the biggest targets for reducing emissions are going to have to trade and will absolutely want to trade,” Ritter continued. “You’ll get a different kind of a cap-and-trade bill, but the cap will be the one set by the Clean Power Plan – 32 percent reduction in emissions – and there’ll be trading of allowances.”

icon_2016_report_commThe Clean Power Plan, or CPP, faces an uncertain future. It was stayed earlier this year by the U.S. Supreme Court to allow a series of legal challenges from states and other stakeholders to be heard. Critics of the CPP argue the regulation, issued by the U.S. Environmental Protection Agency, is an unlawful expansion of federal authority over state energy decisions. It requires states to impose new carbon dioxide limits on power plants and mandate the use of more renewable sources such as wind and solar.

The CPP was President Obama’s second choice for cracking down on power plants that run on fossil fuels. Early in his first term, he pushed a cap-and-trade bill that would have effectively taxed the use of coal, oil and natural gas. It narrowly passed the House, but the legislation collapsed in the Senate, with Democrats from industrial, agricultural and energy-producing states joining Republicans in opposition. The defeat of cap-and-trade was even more remarkable because Democrats held huge majorities in Congress back then, and for a time they even had the 60 votes in the Senate needed to overcome a Republican filibuster.

After huge Democratic losses in the 2010 midterms, Obama acknowledged that cap-and-trade legislation was never coming back. But he also signaled he would use EPA regulations to get what he wanted. “Cap-and-trade was just one way of skinning the cat,” Obama said. “I’m going to be looking for other means to address this problem.” After winning a second term, Obama moved ahead with the CPP.

The CPP has been controversial in Colorado to say the least. When state Attorney General Cynthia Coffman (R) joined the coalition of states opposed to the rule, Gov. John Hickenlooper (D) tried and failed to block the move in court. With the future of the CPP hanging in the balance, environmental activists and Democrats in the state legislature want Hickenlooper to impose a carbon reduction target for 2030 via executive order. Republicans, who hold a one-seat majority in the state Senate, oppose both the CPP and the executive order.

This helps explain why Tom Steyer – a major supporter of both the CPP and anti-fossil fuel activist groups – is pouring money into the campaign to defeat the Republican majority in the state Senate. If he succeeds, and Democrats restore one-party rule in Colorado, there’ll be much less resistance to the CPP or state-level mandates on carbon emissions and renewable energy. At the national level, Steyer is a major supporter of Hillary Clinton and is also campaigning for a Democratic majority in the U.S. Senate.

At today’s event in Ohio – hosted by Oberlin College – Ritter conceded the “transition” from fossil fuels to the sources favored by the Obama administration and environmental activists is already hitting parts of the country hard.

“We’re seeing it firsthand in the West and certainly in other places in Appalachia,” said Ritter, who now leads the Center for the New Energy Economy at Colorado State University. “The coal economy … is being devastated.” Echoing the “just transition” rhetoric of U.S. Sen. Bernie Sanders (I-Vt.) and groups like 350.org, Ritter said carbon regulations should include a “justice component” for fossil-fuel workers and coal miners in particular.

The coal industry “has been part of building our industrial prowess” and helped “grow the middle class with manufacturing jobs,” Ritter said. Coal workers have “committed their livelihood to trying to provide the rest of us with affordable and reliable energy,” Ritter said.

As a presidential candidate, Sanders defined a “just transition” for laid-off energy workers as “extended unemployment benefits, education opportunities, health care and job training for those transitioning to a career in the clean energy industry.”

Simon Lomax is an associate energy policy analyst with the Independence Institute and a consultant who advises pro-business groups. From 2004 to 2012, he was a news reporter covering energy and environmental policy in Washington, D.C. Contact him at simon@i2i.org.

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