Will cutting CO2 hurt or help America's poor?

By ROSALIE WESTENSKOW, UPI Correspondent  |  June 4, 2008 at 11:45 AM
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THE DALLES, Ore., June 4 (UPI) -- As the U.S. Senate continues a political tug-of-war over comprehensive climate change legislation, a number of religious groups are rallying behind the bill's poverty provisions.

The Climate Security Act attempts to decrease the nation's greenhouse gas emissions through a cap-and-trade system. Starting in 2012, the program caps emissions at a certain level, which decreases incrementally until 2050.

Businesses and other carbon-emitting facilities would be allowed to emit only a certain amount, depending on the number of allowances allocated to them and bought through an annual auction. However, they could emit more by buying allowances from other entities that had decreased their emissions below their allotted share.

As policymakers engage in a heated debate this week over the economic impacts of the bill, a number of religious leaders and groups have openly supported it, including the U.S. Conference of Catholic Bishops and the Evangelical Environment Network.

"We have seen the faith community come out in very strong support of this bill," said Sen. Barbara Boxer, D-Calif., sponsor of the bill, along with Sens. Joe Lieberman, I-Conn., and John Warner, R-Va. "It's God's creation that's at stake. … They feel very moved to respond."

They seem particularly moved by the provisions that relate to low-income individuals.

A cap-and-trade system, while projected to cut U.S. greenhouse gas emissions to 71 percent of 2005 levels by 2050, could adversely impact the poorest Americans, said Walter Grazer, special adviser to the National Religious Partnership for the Environment, an association of independent faith groups.

"There's no question that with any climate change legislation, at least one with a cap-and-trade system, prices are going to rise," Grazer told United Press International. "Low-income people are going to be disproportionately impacted."

The rise in prices will hit poorer families harder because they spend a larger proportion of their income on utilities and gas. Because of this, Grazer and other religious leaders are fighting to keep provisions in the bill that attempt to alleviate the rise in prices for poor people.

The bill establishes a Climate Change Consumer Assistance Fund, which would attempt to offset higher prices for poor families. The funds for the program would come from the annual auction of emission shares. From the proceeds of the auction, 3.5 percent would go to the Assistance Fund in 2012, and increase steadily to 15 percent by 2034.

While it's impossible to know how much money this will amount to until after the price of emissions allowances is set, experts, including some at the Center on Budget and Policy Priorities, a non-profit, non-partisan research organization, estimate the funds for the 39-year period will reach $800 billion.

Climate change and poverty seem to present somewhat of a conundrum for policymakers, because if they do nothing, extreme weather caused by rising temperatures will impact the country's poorest people, a number of religious leaders told UPI. On the other hand, mitigating climate change by limiting the supply of carbon emissions most likely will increase prices, also disproportionately hitting low-income individuals.

"Whether it's the day-to-day impacts of heat waves or looking at the aftermath of (Hurricanes) Katrina or Rita, these people … are those who are affected the most and are those who contributed the least to the problem," said Hadar Susskind, Washington director of the Jewish Council for Public Affairs, a national umbrella organization for Jewish groups. "At the same time, we have to make sure that whatever steps we do take to stop climate change don't hit (poor people) even harder with high costs."

Susskind told UPI he believes the provisions in the Lieberman-Warner bill allow the legislation to address both of these problems.

Others disagree, including Chad Stone at the Center on Budget and Policy Priorities.

Because the bill was drafted in the Environmental and Public Works Committee, which can't designate precisely where funds will go, the money intended for low-income families may not end up in the pockets of poor people, Stone said. That decision will be made by the Finance Committee if the legislation passes.

Even if all of that money is directed toward the poor, it will only be 7.5 percent of the total money raised in annual auctions, and that won't be enough to offset price increases, Stone told UPI.

"(That) is half of what you need to fully protect the low-income population from the impact on their budget of higher energy prices," he said.

Stone also said the delivery mechanism is flawed. Currently the bill proposes a large portion of the assistance, 3.8 percent of annual auction revenues, be allocated to utility companies to help their poorest customers. Not only do utility companies not have the information available to identify these people, Stone said, but much of the price increase will be seen in commodities other than electricity.

"If you're using utility companies to provide relief and a large percentage of the price increase is seen indirectly in gas and food prices, then the utility companies can't provide the necessary relief," he said.

Congress should use already existing federal programs, such as the food stamps and earned income tax credit programs, to deliver assistance, Stone said.

Providing help at home isn't the only important relief aspect of the bill for faith groups, though. It also establishes an International Climate Change Adaptation and National Security Program, which will use between 1 percent and 7 percent of annual auction revenues to help developing countries mitigate and adapt to climate change.

This addresses an important justice issue of the climate change debate, said Jennifer Kefer, climate and energy program coordinator for the Coalition on the Environment and Jewish Life, a Jewish environmental organization.

"The United States comprises 5 percent of the world's population, but is responsible for 25 percent of total greenhouse gas emissions," Kefer told UPI. "So it only seems fair that our domestic climate change policy include provisions to address this inequity."

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