Action on climate change must consider all citizens

About 1 in 5 Iowans would be eligible for direct consumer relief on energy costs in the House climate bill.

Climate change affects everyone, everywhere.

David Osterberg
David Osterberg

Everyone will have to make changes, but for some it will be more difficult than others. Public policy must recognize this disparity.

Recent negotiations in Copenhagen dealt with climate-change policy ideas that hit poor countries differently from rich.

Unless rich countries provide funds to help implement new energy-efficiency and renewable-energy technology, developing countries will not be able to afford a transition to smarter, cleaner, but initially more expensive methods of producing energy.

Within the United States, we’re going to see higher energy prices by making coal and other fossil fuels account for their environmental and health effects, at least initially. It is not avoidable, and without careful design these policies will affect people differently at different income levels.

While a climate-change bill has not passed the full Congress yet, President Obama last year signed economic recovery legislation that takes some steps, helping low-income people who find it difficult to insulate their homes and upgrade furnaces and other appliances to use less energy.

In that so-called “stimulus” package, the American Recovery and Reinvestment Act (ARRA), Community Action Agencies in Iowa and around the nation received a large boost in funds to ensure that homes of the poorest families use much less energy.

Before, that program spent about $15 million per year on weatherization in Iowa. ARRA added $80 million over three years. The work is currently under way, helping people to weatherize their homes and helping the Iowa economy at the same time.

Climate legislation in Congress can and should do more.

The climate-change legislation passed last June by the U.S. House recognized the difference. Where, higher-income Americans can offset the higher costs of a gallon of gas or kilowatt hour of electricity by installing insulation or combining car trips, such efficiency moves are out of the reach of many Americans at low incomes.

About 1 in 5 Iowans — approximately 579,000 at low incomes — would be eligible for direct consumer relief in the House bill. These payments would compensate for higher expenses for energy and energy-intensive goods and services for those households.

A Senate version of the bill does less directly for low-income citizens, but that bill, passed out of the Environment and Public Works Committee, also makes improvements. It’s something that needs further consideration.

At home and abroad, climate-change policy must recognize the disparity in economic ability to make the necessary changes to save our environment, our resources and our planet.

Posted by David Osterberg, Executive Director

Move now to improve Iowa’s lousy water quality

It is only a matter of political will to set strong water-pollution limits that are enforced, and to try out some innovative programs.

Teresa Galluzzo

A new report researched for us by economics professor Cathy Kling and PhD candidate Subhra Bhattacharjee of Iowa State University documents that Iowa’s water quality is poor, primarily because of agricultural pollution, and evaluates two newer approaches for improving water quality that have been used in the Midwest.

One of the primary findings of this report is that no matter how well we structure our water-quality programs, if they are not backed by tough pollution limits they will not improve water quality.

Governor Culver last week in his Condition of the State message did not mention Iowa’s significant water-quality problems. Obviously, Iowans are suffering from being out of work and being involved in wars abroad, and those issues rightly take precedent.

However over the last several decades, whether or not we are in a bad budget year, Iowa has not taken the measures necessary to improve our water quality.

Given the current poor economic climate, Iowa could take steps to improve water quality without impacting our budget. We could heed one of the primary recommendations of this report and increase our limits on pollution. That would not cost the state anything.

Further, the researchers learned many lessons from the two programs they studied for this report: water-quality trading and wetland banking. They created a significant list of dos and don’ts for how to structure these programs in Iowa and recommended that we establish pilot projects to try out these approaches. Taking such measures would allow us to begin improving water quality at a very small cost to the state.

The point is there are ways to address water quality, even without a significant state expenditure. It is only a matter of political will to set strong water-pollution limits that are enforced, and to try out some innovative programs. Iowa needs to find this will to improve our lousy water quality and thus quality of life and economy.

Posted by Teresa Galluzzo, Research Associate

PDF of full report, 16 pages, or executive summary, 2 pages

We don’t have luxury of avoiding climate change response

Putting a price on greenhouse gas pollution would create a bigger market for renewable energy and energy efficiency.

Teresa Galluzzo
Teresa Galluzzo

Challenged by a down economy, two wars, and the need to fix our health care system, Congress might want to push other issues to the wayside. But Congress doesn’t have that luxury. Another very critical issue needs our attention: our action plan to address climate change.

Crafting legislation to reduce our contribution to climate change would also play a role in addressing today’s other immediate needs. Putting a price on greenhouse gas pollution would create a bigger market for renewable energy and energy efficiency. The jobs and industries created for developing clean energy technologies would help get the U.S. and Iowa economy back on track.

The American Council for an Energy-Efficient Economy recently estimated the climate-change legislation passed by the House would net Iowa 4,000 new jobs in 2020 and nearly 6,000 jobs by 2030.

Likewise, the Center for Rural Affairs looked at the job creation potential of requiring that 20 percent of electricity be generated by renewable energy before 2030. That research found that the wind energy developed in Iowa to meet this standard could create over 9,000 permanent jobs and over 60,000 temporary construction jobs in Iowa.

The benefits reach beyond job creation. Reducing our reliance on foreign fossil fuel sources is critical to national security and preventing future conflicts over energy and those that would result from the human tragedy associated with the worldwide impacts of climate change.

Furthermore, preventing the more frequent occurrence of catastrophic heat waves, flooding and drought anticipated for Iowa — if we continue emitting large amounts of greenhouse gas pollution — would go along way toward improving our health.

Addressing climate change is urgent work and must it stay on Congress’ long to-do list. We can’t continue business as usual for our economy, security or health. We can do better, and responding to the challenge of climate change is the way forward.

Posted by Teresa Galluzzo, Research Associate

A view of IPP research, from a researcher

Molly Fleming
Molly Fleming

As I begin my final year at the University of Iowa’s graduate program for Urban and Regional Planning, I have been fortunate to join the Iowa Policy Project as a part-time research assistant. This opportunity allows me to integrate my interest and experience in public policy with fact-based research and analysis. Given public confusion and misperception regarding such critical issues as health care, taxes and the environment, objective research is vital to ensure government accountability and citizen engagement. I am very pleased to be able to assist in this important work.

As a volunteer at the Iowa Policy Project last spring, I helped former research associate Beth Pearson to determine the benefits of home weatherization for low-income Iowans. Additionally, I helped to compare how alternative versions of climate change legislation could promote or harm public welfare. The research skills I gained from this experience have been invaluable, and I hope to build upon them throughout the coming year.

Under the guidance of Peter Fisher and other members of the wonderful IPP staff, I will look at the effects of the American Recovery and Reinvestment Act on Iowa’s economy. I also plan to take a hard look at Iowa’s budget allocations throughout the year and the rising cost of living within our state. It is my hope that this research will help to spark good ideas and influence important public policy. As the challenges and prospects facing Iowans evolve during this time of economic uncertainty, the Iowa Policy Project’s work is more important than ever. I am both honored and excited to be a part of the IPP at such an exciting time, and I look forward to my year here.

Posted by Molly Fleming, Research Assistant

Everything on the table? Really?

Back in January, Governor Culver asked lawmakers to “agree that everything’s on the table with respect to balancing the budget and finding cost savings in state government.”

Today, on Ryan Schlader’s WMT-AM radio talk show, State Rep. Nick Wagner, responding to a question about state employee retirement benefits, opined that “I don’t think we should just write anything off the table.”

Both quotes sound good. Do they mean it?

The evidence may come during the next legislative session. Budget policy fell short of the concept in 2009. Otherwise, abuses of Iowa’s tax code would not have been allowed to continue when lawmakers were choosing among services to be cut as revenues declined.

This is not a partisan thing — or it should not be.

Can’t all Iowans agree that any spending by state and local government should (1) carry a demonstrable public benefit, and (2) be subject to regular scrutiny to allow legislators and the public to determine that it does have that benefit?

The Legislature took a small but important first step in 2009 by passing legislation toward the transparency that would allow scrutiny of one of Iowa’s most wasteful programs: the Research Activities Credit (RAC). The RAC is a virtually open-ended business entitlement that results in multimillion-dollar secret checks being sent to big companies that don’t pay any income tax in Iowa.

Ultimately, the law passed this year may begin that process toward better scrutiny.

That’s why the Big Business lobby in Iowa will continue to fight transparency and protect its sweetheart tax breaks while lawmakers make other budget choices that will cut teachers in classrooms, drive up tuitions in community colleges and state universities, and continue to shortchange public safety, environmental quality and recreational assets.

If everything is on the table, it has to include wasteful spending on special-interest tax breaks for companies that don’t pay income taxes.

By Mike Owen, Assistant Director

Explaining the ‘trade’ in ‘cap and trade’

David Osterberg
David Osterberg

“Cap and trade” is a term growing in use but still needing explanation. We all get the “cap” part. The way to clean our water and our air is to “cap” the amount of pollution entering it. The “trade” part is a little more confusing.

The ‘cap’
Let’s assume that we see health or aesthetic damage from all the pollution in the air and that we have identified 121 tons of it being generated by a finite number of factories and other sources. Assume that good science says that we need to cut those identified emissions by half — 50 percent — to have an effect. Because it will be easier to get to that goal by giving the polluters some time to put in the pollution control or close down heavily polluting plants, we decide to reduce emissions by 10 percent a year over the next five years. The identified firms are told they need to cut the entire 121 tons to 110 tons by the end of the first year. That is the “cap” part of cap and trade.

The ‘trade’
The trade part of pollution reduction lets firms choose how to get to the total reduction. A firm with 10 plants equal to 11 total tons can decide to cut a quarter-ton from each of its four newest plants to reduce the 1 ton it is required to meet, and let the other plants produce as they formerly did. This works because we are interested in the total number, and it allows the company to meet the mandate to cut emissions by choosing the cheapest way within the company. A 10 percent reduction from all 10 plants would also get us the 1 ton, but this might be more expensive.

Firms also can trade with each other to help the economy achieve the desired reduction in emissions. The company that chooses to concentrate pollution in a few plants might want to go further than the 0.25 tons in each new plant. Its managers know that next year there will be another 10 percent reduction and 10 percent the year after that, so they might want to cut emissions just once and begin the process of eventually reducing even more. Going further than required this year will earn the firm credits, which can be saved for the next round of reductions, or purchased by a firm with mainly old plants that are hard to refurbish. This creates a market in which a broker agency sets up something like a stock exchange to trade the extra credits of one firm to the firms that want to purchase them. It is assumed that this marketplace will produce a cheaper solution to getting the same 10 percent total reduction in pollution that a simple mandate for each company, or even each plant, to reduce emissions by 10 percent.

The credit marketplace
The price of the credits is not known at the beginning. A firm might plan for a reduction on its several plants when learning that the price of credits is cheaper than first thought. The firm would then buy credits and do the plant cleanup next year. Alternatively, a firm might find the market for credits is so high that it can cut more emissions immediately and pay for part of the job by selling extra credits. That is how markets work and it shows how the trading part of cap and trade can address pollution from the big-ticket generators.

Posted by David Osterberg, Executive Director

IPP Open House packs ’em in

Christine Ralston
Christine Ralston

Wow, what an event. Friday afternoon, the Iowa Policy Project hosted an open house and FRIENDraiser at our new office in Old Brick.

We packed the office with friends and supporters. Guests had the opportunity to meet and talk with IPP staff, old IPP staff greeted longtime friends and new staffers were able to meet many of IPP’s friends and supporters.

The event was an opportunity for IPP to show off our new, spacious office. The organization has increased from five to nine staff members in just two years, so our old space was getting a bit cozy.

Our new space has several private offices, a research room and a separate conference room which was dedicated in honor of IPP co-founder Mark Smith.

Mark helped found IPP in 2001 in collaboration with IPP’s Executive Director, David Osterberg. Mark is perhaps best known as former president of the Iowa Federation of Labor, AFL-CIO. For 34 years, Mark worked tirelessly in education, organizing and advocacy for Iowa’s working families.

A short presentation included remarks by David about IPP history and Mark’s contribution to the organization as well as Mark’s remarks about the founding, work and expansion of the Iowa Policy Project.

David Osterberg speaks at IPP's Open House
David Osterberg speaks at IPP's Open House

The event was open to the public. Attendees included past and present members of the IPP board, friends and supporters of IPP’s work and several of our nearby elected officials: Congressman Dave Loebsack, State Senator Joe Bolkcom of Iowa City, State Representative Nate Willems of Mount Vernon, and Johnson County Supervisor Rod Sullivan.

Many, many thanks to those of you who took the time to come and speak with us, see our new offices and make donations in support of our work. We truly appreciate it.

Posted by Christine Ralston, Research Associate