Rice calls carbon cap-and-trade ‘ridiculous’

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Former U.S. Secretary of State Condoleezza Rice advocated today in favor of a carbon tax over the cap-and-trade system proposed in America’s energy and climate bill.

It was a homecoming celebration of sorts today for former Stanford University Provost and 66th U.S. Secretary of State Condoleezza Rice to be back on campus.

Rice paid a visit to Stanford in Palo Alto, Calif. today, commenting on the complex relationships between U.S. energy issues and international policies as the keynote speaker of the Silicon Valley Energy Summit, and criticizing the climate mechanisms pursued by the administration of U.S. President Barak Obama.

The U.S. House of Representatives passed the nation’s first energy and climate bill on Friday, the “American Clean Energy and Security Act.” The Senate is expected to take action next, with discussion currently anticipated in the fall.

The legislation, also known as the Waxman-Markey bill, would establish a “cap-and-trade” market for greenhouse gases (see Obama administration could fast track cap-and-trade, RPS in ‘09).

Rice said she understands the need for carbon pricing to be established, but cautioned of the abuse of a cap-and-trade system, especially on an international level, calling the Kyoto system for doing so “ridiculous.” She indicated it could likely be managed domestically.

“Carbon tax is more straight forward,” she said.

In a sit-down discussion with Stanford Precourt Energy Efficiency Center’s Director Jim Sweeney, Rice answered questions from the audience about major ways energy has impacted diplomacy and foreign policy, and offering suggestions as to how the energy and environmental dilemma could be resolved.

In China, where foreign policies are being driven by resource constraints, Rice highlighted how China is seeking friendships and new relationships in places they haven’t in the past.

With little hope of an open political system and open foreign policy in Russia, Rice referred to the steady accretion of power to the government as “Russia Inc.” She indicated Russia hasn’t been as successful as it hoped in buying its energy advantages from western countries.

She said indicated that how the energy economy environment dilemma is addressed through policy can be a source of conflict or one of cooperation for the United States.

She voiced concern with the growing north/south divide, addressing the need for China and India to be incorporated in “a fair way” into international energy-related framework.

“This new north/south divide can be bridged,” she said, adding that these countries can even be early adopters of new technology.

She also cited concern with international frameworks stifling innovation, especially in regard to genetically modified food.

“At this stage, we need to have an open field for all technology to change the sustainability mix,” she said.

With some new technologies, such as transportation-related battery technologies, already already on the table, she said “we have to be careful of a discontinuous leap,” by making sure international framework is solid.

“I do think there has to be some sense of responsibility in the part of developing countries or we are not going to get there,” she said.

Without China and India dealing with greenhouse gases, for example, she said progress could be reversed or stalled. China is weighing its options in taxing greenhouse gas emissions and waste water (see China to tax polluted air and water?).

China recently passed the U.S. as the biggest emitter of greenhouse gases. It gets about 80 percent of its electricity from coal-fired power plants (see China to close 31GW of coal power plants).

With enormous amounts of government spending as well as funds from the private sector pouring into alternative energy, she suggested some of those funds be used to transfer alternative technologies to developing countries.

“Just say zero tariffs on the transfers of any clean technologies and see what happens,” she said.

Rice couldn’t pick out just one country that has an energy policy the United States could emulate. Rather, she suggested the United States could pull from various countries such as France and Australia for specific pieces (see France launches ambitious, €1.5B solar plan and Germany, U.S., Australia inject stimulus spending into cleantech).