The Climate in Bali and Washington

So far, this has been an encouraging year for people who care about global warming. Governors have signed regional agreements to cap greenhouse gas emissions. The federal courts are pressing Washington to take action. Venture capitalists have poured money into cleaner fuels. Polls show rising public concern.

What’s still missing is a concrete national and international strategy for a problem that does not respect any borders. The days ahead will tell a lot about whether the world, and especially the United States, is prepared to do more than just talk about the problem.

Representatives from 190 countries are gathering in Bali this week to begin framing a successor to the Kyoto Protocol on climate change, which expires in 2012. On Wednesday, the Senate Environment and Public Works Committee will try to finish and send to the Senate floor an ambitious bill aimed at cutting emissions in this country by 15 percent by 2020 and 70 percent by mid-century.

The meetings in Bali and Washington are intimately linked. Progress globally will depend heavily on whether Washington, after years of delay and denial, is prepared to follow Europe’s lead and impose mandatory controls on emissions. As the dominant producer of heat-trapping gases, the United States cannot expect other countries to make costly investments in new ways of producing and using energy unless it acts decisively at home.

The Senate bill represents such an effort. It would impose a steadily declining cap on emissions of carbon dioxide and other greenhouse gases. Companies would be assigned emission allowances, which could then be traded on the open market, with more-efficient companies selling excess allowances to less-efficient companies that could not immediately meet their quotas.

The government would distribute the allowances in two ways, giving some away and charging companies a fee for the rest. The proceeds would be used to offset higher energy costs for low- and moderate-income consumers and to finance investments in new and cleaner technologies. The bill’s main flaw is that in its early stages it gives away too many free allowances to coal-fired power plants. This is thought to be necessary to attract votes from coal-state senators. But it represents a windfall for older, dirtier plants and could keep them running far longer than necessary. This should be fixed before the bill goes to the floor.

On balance the bill represents an important first step toward restoring America’s credibility at a time when the world needs American leadership. There is no consensus among the nations assembling in Bali about what to do next. Should there be a global cap-and-trade system? Smaller regional agreements? Or an agreement among a core group of big emitters — an idea gaining increasing traction among environmentalists and even the White House?

Whatever happens, China and India have to be part of the equation. Along with other developing countries, both were exempted from making any commitments to reduce emissions at Kyoto on grounds that the industrialized countries bore the heaviest historical responsibility. Given the extraordinary growth in both countries, that argument is no longer sustainable. But it will be much easier to get China, India and others to adopt aggressive policies if the United States is also on board.