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New York Mayor Bloomberg Praises Mayoral Leadership on Climate Protection
Urges Adoption of National Climate Strategy with Tax on Carbon Emissions

By Kevin McCarty
November 19, 2007

Addressing mayors and other Summit participants at the closing luncheon session, November 2, New York City Mayor Michael R. Bloomberg praised the nation’s mayors for their climate leadership, while challenging the President and Congress to act more forcefully to reduce U.S. greenhouse gas emissions, including adoption of a new federal tax on carbon emissions.

“There is no problem that can’t be solved if we have the courage to confront it head-on — and put progress above politics. Mayors around the country are doing it — and those in Washington can, too. I believe it’s time for both ends of Pennsylvania Avenue to come together around a national strategy on climate change and to lead the way on an international strategy. And I believe that until they do, it’s our job as mayors to point the way forward. That’s why right after this conference, several of us will be testifying before a House committee that is holding a hearing on climate change here in Seattle,” Bloomberg said.

His call for national leadership on climate protection was coupled with a strong message that the nation needs to capture the employment and other economic benefits of a broader U.S. commitment to a less carbon-intensive future. “We need our leaders to have the courage to talk about and implement real climate change solutions, not just because it’s good for the world, but because it’s good for America, our environment, our national security and our economy. Make no mistake: Real jobs are on the line here — because cleaner energy sources are going to be a cornerstone of the 21st-century economy,” he said.

Bloomberg also urged federal leaders to “re-establish America’s leadership on all issues of international importance, including climate change,” adding that “if we are going to remain the world’s moral compass — a role that we played throughout the 20th century, not always perfectly, but pretty darn well — we need to regain our footing on the world stage.”

Pointing to inaction in Washington and the reluctance of national leaders to step up to difficult choices, Bloomberg said, “On climate change, the duck-and-cover usually involves pointing the finger at others. It’s China-this and India-that. But wait a second. This is the United States of America! When there’s a major challenge, we don’t wait for others to act. We lead! And we lead by example. That’s what all of us here are doing.”

He also cited the foreign policy, national security and economic implications of inaction. “Climate change presents a national security imperative for us, because our dependence on foreign oil has entangled our interests with tyrants and increased our exposure to terrorism. It’s also an economic imperative, because clean energy is going to fuel the future. Jobs are on the line here — good jobs of every kind: Farm jobs. Factory jobs. Engineering jobs. Sales jobs. Management jobs. If we don’t capture these jobs, they’ll just move overseas. Green energy is going to be the oil gusher of the 21st century, and if we’re going to remain the world’s economic superpower, we’ve got to be the pioneers — just as America always has been,” Bloomberg said.

Cites Four Principles to Underpin National Climate Strategy

Washington lawmakers, according to Bloomberg, should be guided by four key principles in developing a national climate protection agenda: 1) increase investment in energy research and development (R&D); 2) stop setting tariffs and subsidies based on pork barrel politics; 3) get serious about energy efficiency; and 4) stop ignoring the laws of economics.

He called for a greater emphasis on energy research and development, stating, “we’re spending just one-third of what we were in the 1970s. If we really want to be able to manufacture competitively priced biofuel and solar power, if we really want to sequester the carbon dioxide released from coal, we have to be willing to make the commitments that will drive private capital to these projects — and right now, we’re just not doing that.”

In urging lawmakers to take the pork out of tariffs and subsidies, he used expanded federal incentives for ethanol to make the point. “Congress is currently subsidizing corn-based ethanol at 50 cents a gallon — and you can argue that’s good agricultural policy, but you can’t argue that it’s good for consumers or the environment. Because it isn’t. Consumers pay more for food, and producing corn-based ethanol results in much more carbon dioxide than producing sugar-based ethanol. But are we subsidizing sugar-based ethanol? No! We’re putting a 50-cent tariff on it.”

Singling out fuel economy as the launch point for an increased federal emphasis on energy efficiency, he said, “we have to get serious about energy efficiency — and the best place to start is with our cars and trucks. In 1975, Congress passed a law requiring fuel efficiency standards to double over 10 years, from 12 miles a gallon to 24, with incremental targets that auto manufacturers were required to meet.” He further added that “raising fuel efficiency standards is the best thing we could do for U.S. automakers — and it would’ve been done years ago, but for the politics.”

Bloomberg, however, largely confined his remarks to his fourth and final principle – stop ignoring the laws of economics – and presented a detailed argument for why enactment of a carbon tax is both desirable and necessary to move the U.S. forward on a national strategy for reducing its greenhouse gas emissions. “As long as greenhouse gas pollution is free, it will be abundant. If we want to reduce it, there has to be a cost for producing it. The voluntary targets suggested by President Bush would be like voluntary speed limits — doomed to fail.”

Cap-and-Trade vs. Carbon Tax

“If we’re serious about putting the brakes on global warming, the question is not whether we should put a value on greenhouse gas pollution, but how we should do it. This is where the debate is moving, and I’d like to briefly touch on the pros and cons of the two approaches that are most often discussed: creating a cap-and-trade system, and a putting a price on carbon,” he said.

Explaining further, Bloomberg said, “to raise the cost of carbon, we can take either an indirect approach — creating a cap-and-trade system of pollution credits — or a direct approach: charging a fee for greenhouse gas pollutants. The question is: Which approach would be more effective? I’ve talked to a number of economists on this issue, people like Gilbert Metcalf at the National Bureau of Economic Research, and every one of them says the same thing: A direct fee is the better approach — but for the politics. There’s that phrase again: But for the politics!”

He indicated that a cap-and-trade system is “an easier political sell because the costs are hidden — but they’re still there. And the payoff is more uncertain. Because even though cap-and-trade is intended to incentivize investments that reduce pollution, the price volatility for carbon credits can discourage investment, since an investment that might make sense if carbon credits are trading at $50 a ton may not make sense at $30 a ton. This price volatility can also lead to real economic pain.”

“A direct charge would eliminate the uncertainty that companies would face in a cap-and-trade system. It would be easier to implement and enforce, it would prevent special interests from opening up loopholes and it would create an opportunity to cut taxes,” he said.

City’s Plan NYC for Climate Protection

Key elements of New York City’s PlaNYC, which has helped Bloomberg earn a national and worldwide reputation for leadership on climate protection, were addressed in his remarks. One initiative that has garnered considerable press coverage is the proposed congestion charge for drivers entering Manhattan. “Now, the question is not whether we want to pay, but how do we want to pay. With an increased asthma rate? With more greenhouse gases? Wasted time? Lost business? Higher prices? Or do we charge a modest fee to encourage more people to take mass transit and use that money to expand mass transit service? When you look at it that way, the idea makes a lot of sense, but for the politics, because no one likes the idea of paying more,” he said.

He indicated that this new charge is supported by a diverse coalition of interests, although key state and local lawmakers have not yet embraced the plan. In contrast, New York City had the sole authority to convert its 13,000 taxicabs to hybrids by 2012, a measure that the city has already enacted. “This will not only help clean our air and reduce greenhouse-gas emissions, it will save each driver about $4,500 a year in gas costs,” Bloomberg said.

The New York Mayor did credit his mayoral colleagues for helping him develop his city’s climate strategy. “We made no apologies for stealing the very best ideas — and we came up with some of our own,” he said.

During his remarks, Bloomberg also acknowledged the Conference’s Leadership – Trenton Mayor Palmer, Miami Mayor Diaz, and Seattle Mayor Nickels, — and many others attending the Summit for joining with the Mayors Against Illegal Guns, a coalition of mayors which now includes more than 240 mayors from throughout the U.S.

In his remarks, Conference President Trenton Mayor Douglas H. Palmer thanked Bloomberg for his leadership and support of the Conference’s efforts on climate protection and other challenges before cities, introducing him to the participants as the “Mayor of the Green Apple.”