I don't profess to have much knowledge of the niceties of environmental policy beyond what I was able to glean from Ron Bailey's excellent article, but count me among those who are suspicious of the Lieberman-Warner cap-and-trade plan. It was this glowing report from the NYT, actually, that really started to get me worried:
Some of the most powerful corporate leaders in America have been meeting regularly with leading environmental groups in a conference room in downtown Washington for over two years to work on proposals for a national policy to limit carbon emissions.
The discussions have often been tense. Pinned on a wall, a large handmade poster with Rolling Stones lyrics reminds everyone, “You can’t always get what you want.”
What unites these two groups — business executives from Duke Energy, the Ford Motor Company and ConocoPhillips, as well as heads of environmental organizations like the Natural Resources Defense Council — is a desire to deal with climate change. They have broken with much of corporate America to declare that it is time for the federal government to act and set mandatory limits on emissions.
What divides them is that dealing with climate change will almost certainly hurt some industries and enrich others. Billions of dollars are at stake. Depending on how the nation decides to tackle the problem, electricity bills in some states could rise 50 percent, and gasoline prices could go up 50 cents a gallon.
“It’s really now a battle over the economics,” said James E. Rogers, chief executive of Duke Energy, who has long advocated curbing carbon emissions. “The debate is not about the climate problem. Everybody could agree on the principles and still get the economics wrong.”
That's funny, because I thought the debate was supposed to be about principles - principles to which economic questions are certainly relevant, to be sure, but also principles having to do with climatological and political science (What do we need to do? How can we best accomplish it?), not to mention freedom and - crucially - fairness. And so I wonder why our "most powerful corporate leaders" are the ones making conference room deals with environmental groups to hammer out the fineries of our nation's carbon policy.
Actually, scratch that. I don't wonder about that at all. The reason why these corporations have "broken with much of corporate America" is staring you right in the face: there is money at stake, and they want to make sure that the inevitable spate of regulations helps them and harms the competition. (And oh, a bit of nice PR is good for the bottom line, too.) What we're likely to get, in other words, is another case of powerful interests using the government to enrich themselves at the expense of their competitors and - of course - the rest of us.
The very cool left-libertarian blog The Art of the Possible had a nice post the other day describing a similar phenomenon in big cell phone carriers' attempts to get the FCC to preempt the lawsuits pending in state courts by adopting a federal policy on "early termination" fees, and the question posed there - “Sure, okay, this is not the ideal use of government regulation. But this is reality. This is how government regulation is often used. Where does this reality factor into your analysis of the situation?” - seems to me to get things exactly right. There are of course many similar cases that have been explored, and in the present instance it's not that hard to see the devil at work in the details:
The debate over who gets carbon credits is particularly intense in the power sector, which creates 40 percent of the nation’s carbon emissions.
Companies that rely on coal to generate power say that allowances should be free so that customers in the Midwest and the Great Plains, where coal is mostly used, are not disproportionately penalized. Coal accounts for half the nation’s power generation, and executives like Mr. Rogers of Duke say these customers should not have to bear the brunt of a national climate policy.
But not everyone wants to see allowances doled out free, especially among power producers that are less dependent on coal than Duke. [emphasis mine - JLS] Lewis Hay III, chairman of FPL Group, a Florida power company, says carbon emitters should have to pay for their emissions.
“There is just going to be a giant fight over the free allowances,” he said.
That's right: the company that currently relies on coal for almost 70% of its energy production (see p. 9) hopes to get the credits for free, while the one that relies primarily on wind farms and solar power, and for which coal accounts for only 5% of their business (p. 15), wants things to turn out otherwise. The folks at FPL want to make them - and, by extension, their customers - pay for those carbon credits, and of course they'll be happy to provide cleaner, lower-carbon, and (suddenly!) cheaper options to those who want to have a choice. You may not be able to get exactly what you want, but you can make sure that your opponents end up even worse off than you. I'm all for a carbon policy, but it seems to me that it should be arrived at in healthier ways than this.
How does that get done? I'm not sure - obviously all parties have the right to speak up in favor of their own respective interests, though a bit more transparency about exactly where those interests lie (and why) would certainly help. It's entirely reasonable, of course, to insist that a less-than-ideal policy is better than nothing at all, but a proposal like this one - "a huge tax hidden in a bureaucratic labyrinth of opaque permit transactions", says George Will; "Protectionism-masquerading-as-environmentalism [which] will thicken the unsavory entanglement of commercial life and political life"; a guarantee of "a surge of money into politics" - has got unfairness written all over it, even if it will manage significantly to reduce carbon emissions with a minimal macro-economic impact. Whether a more straightforward carbon tax could accomplish this latter thing in a more equitable way is a question I'm unfit to answer. But progress would be made, I think, if we all agreed that any federal policy should be constructed in such a way that its consequences are applied equally across the board to all the parties that are affected - not, perhaps, to do no harm, but to harm everyone involved to approximately the same degree.
P.S. My work would be unfinished if I didn't close with a remark on this:
As the fight escalates, trade groups are planning ad campaigns to make their case against a climate policy. One ad, produced by the United States Chamber of Commerce, shows a man cooking breakfast over candles in a cold, darkened house, then jogging to work on empty highways, asking: “Is it really how Americans want to live?”
No, not really, though if the alternative is taking a kayak to work on an 80-degree December day in a world without polar bears, I might sign up. Seriously, though, could we please try to have a discussion about Important Things without invoking the End of the World as We Know It?(Cross-posted at Upturned Earth.)