Sliding Cap-and-Trade into Bailout, and pissing off conservatives
Marc Ambinder has a really good idea on how Obama can institute a relatively easy path to Cap-and-Trade, while pissing off conservatives but without having to deal with them. The relevant parts of the plan:
But there may be an easier way for Obama to institute carbon caps without exposing himself to the political downsides, without giving up much of his political capital. (Let me deal with an objection: yes of course the American people want energy independence and are very worried about global warming and support tougher rules and regs, but politicians haven’t been terribly honest with them about the short-term (and potential long-term) costs of this type of change. Major congressional action might alter the political equation a bit.)
In essence, what Obama and the Democrats could do is to use the cover of a stimulus package to spend billions to create green jobs, and then pursue the carbon-capping half of the equation administratively, using laws like Clean Air Act.
Some of Obama’s top environmental advisers have argued that the CAA gives the Environmental Protection Agency the authority to regulate already existing regional cap-and-trade regimes; the EPA would simply knit them together. Voila. National cap-n-trade. Well, yes, every state in the union would have to affiliate with a program or create one of their own, but many governors and legislatures appear ready to do this, conditioned on the federal government’s willingness to administer it.
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If Obama decides to do this, climate change conservatives will go ape. An end-run around Congress. An illegal intervention by the executive branch. No public debate, etc. But it would work, and it would allow to tackle, say, health care, without the distraction of having to also put through another major piece of reform legislation.
I personally think this is brilliant. I don’t know what Ambinder is doing blogging; he should be working for Obama directly.
Some links to other posts about cap-and-trade below the fold.
- Obama: Cap and trade is a top priority ยป VentureBeat
- Nader’s Advice to Obama – Chris Horner – Planet Gore
- Obama’s Grand Experiment: Global Warming Cap-and-Trade Policy
- Audio: Obama’s Cap and Trade Policy is Aggressive
- Is Obama’s foreign policy team leaning too far – to the right?
December 3rd, 2008 17:48
About a shortcut to cap ‘n trade – people have argued for a while that the Clean Air Act’s mandate effectively includes GHGs, so we should use the existing cap ‘n trade system we have for sox and nox and use it control GHGs. I can see the administration being successful in broadening the definition of emissions in the act, but I do not think it will be as easy as the Atlantic/Ambinder is depicting. That will be a drastic change and as soon as the administration tries to do that, there will be immediate law suites, which will slow down the main task of controlling climate change. I am not against using the CAA to control GHG. The point is that, either choice (Carbon Tax or Cap ‘N Trade) would face political challenges and there are no short cuts.
On Nader’s ideas on global carbon tax, here are some observations – (1) it assumes that we will be able to have a global carbon tax in all countries – highly ambitious assumption. If we can achieve that before the planet is extinct, I think it will be the superior solution over credit trading; (2) It assumes that there will be no reciprocity between the national/pan regional credit trading systems. I think that countries/regions will be willing to cooperate in carbon trading between national/regional boundaries and there is some precedence already; (3) The carbon tax approach is very elegant on the surface and it tells a “clean” story, but it is horrendously inefficient in assessing taxes in relation to the source of CO2 emission. Taxing at the “bottlenecks” seems intuitive and elegant, but not that straightforward or efficient. For example, under Nader’s plan, you will charge a tax on Nat Gas on the trunk lines, but after the gas gets out of the trunk lines, it can be consumed for various applications, while each of those applications will have a different emission intensity. So a new gas fired power generator will produce less CO2 than an old generator or a power generator may produce less CO2 than a nat gas fuelled car, per btu of energy usage. On top of all this, there are pricing issues. How do you determine an effective tax rate for CO2 in such a inefficient system?