Cap and Trade
Cap and Trade is through the House, now Obama’s team is working on pressing it through the Senate. The legislation is in its early stages, but as it is proposed today it would mandate a reduction to 17% of 2005 levels of greenhouse gas emmissions by 2020.
In general, the Republicans are opposed to this and the Democrats are in favor.
I find the Republican outcry to be a little melodramatic. According to the Wall Street Journal, “Sen. James Inhofe of Oklahoma, the panel’s top Republican, said the cap-and-trade system would amount to the largest tax increase in American history.”
Largest tax increase in history? That’s laughable. What this represents is change, and people are afraid of change.
Now, in all truth I don’t think that cap and trade is among the best ideas for attempting to limit carbon emmissions. I have mixed feelings about the concept, mainly I think it fails to solve the much greater problem of dependence on imported energy resources.
If we were to impose a significant and annually increasing tarrif on imported energy we would find our society radically transformed to consume less of it within a generation. We would find that “unbreakable habits” (like our excessive driving) suddenly change in the face of a new economic reality. Carbon emissions would suddenly seem more manageable as we quickly reduced our fossil fuel consumption by 65% — the ammount we’re currently importing.
Whatever the cost, whatever it takes, we will be better off in an energy independent future. Cutting carbon emissions is a tangent to that issue.
The real fault here is that the Obama administration is missing an opportunity to create a vision of a better future, a vision of a post-oil world where the average person in the US enjoys a greater quality of life and the world is a more stable and peaceful place. The way to win the war of ideas is to lead people toward a better future, not try to punish “bad behavior” out of their system.
Obama of all people surely knows this lesson, his entire campaign was built around selling “hope.” The wonder of it all is how he’s losing that clarity of message now that he has posession of the greatest microphone in the world – the US presidency.
As far as cap and trade is concerned, the Democrats can probably force the issue through whether the Republicans like it or not. But the opportunity exists to call this a stepping stone toward energy independence, and to create a compelling vision of the future that inspires Americans to join the effort to reduce energy consumption (and therefore emmissions) willingly as a means to securing a better future for themselves. Any public official that can pull that off will be seen by history as one of the great leaders of our time – the challenge is whether any of them have the courage to actually do it.
Categories: think
Tags: cap and trade, Democrats, energy, Obama, policy, politics, Republicans
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Great topic that is very important, not only to this energy city, but to the country and the world as a whole.
Two things:
One, I don’t believe cap and trade is an effective way to regulate carbon emissions in our economy. Cap and trade was very effective under the Acid Rain Program to regulate emissions of sulfur dioxide and other pollutants largely responsible for acid rain. In that situation though, emissions were almost exclusively concentrated from a single source, coal-fired power plants. This made it relatively easy to create a market and monitor a limited number of sources.
In the case of carbon emissions, static sources of emissions alone are almost limitless and include coal-fired plants, chemical plants, refineries, and basically any factory or industry that uses a generator on site. And this of course doesn’t even touch the big elephant in the room, emissions from automobiles. Cap and trade is simply not an effective way to regulate emissions in such a situation. Measuring becomes too costly and invariably certain sources are left out. Additionally, the transaction costs in such a market become too high. The lack of success under the EU’s cap and trade system is evidence of this failing.
That is not to say that we should simply throw up our hands. We, of course, need to reduce carbon emissions and our addiction to foreign oil. But even forgetting climate change for a moment, the political, social, economic and other environmental effects of our use of so much coal and petroleum is shocking. A carbon tax would be an effective way to limit consumption of such dirty fuels and could be easily administered across the board to reach all sources. Sadly, at this point it seems that such a tax is politically untenable.
If we were smart, we would have instituted a carbon tax back in the 1970′s soon after the first oil crisis. Back then, our cities weren’t as sprawling which would have lessened the impact of such a tax on the average person. We would have also had a new revenue stream that we could have applied to new rail lines and other forms of mass transit to provide alternatives to driving. Countries like Germany did this very thing but unfortunately, we as a country were too short-sighted and, frankly, stupid to plan for the long term. Now we are really in a rut and its going to be even more painful to extract us out of it.
So, what do we do? Given the fact that cap and trade is ineffective and a carbon tax is basically a no-go politically because we missed the train (literally) back in the 1970′s, perhaps there is a third-way. While I don’t agree with all of its conclusions (for example I still think we need some type of carbon tax to attempt to limit consumption, especially in the short term), here is an article that presents an alternative. Instead of regulation or attempting to limit current technology, they advocate public investment in new technology (the new “Manhattan Project” argument essentially). It is lengthy but interesting.
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