\nmeltdown, determined industry opposition and its own complexity.” Mr.
\nBroder’s analysis is concise and insightful, and I recommend it to readers<\/a>. But I think there’s one factor that is more important than all those
\nmentioned above in causing cap-and-trade to have changed from
\npolitically correct to politically anathema in just nine months. Before turning to that, however, I would like to question the premise
\nof my own essay.<\/p>\n
<\/p>\n
Is cap-and-trade really dead?<\/strong><\/p>\n <\/p>\n Although cap-and-trade<\/a> has fallen dramatically in political favor in Washington as the U.S. answer to climate change, this approach to reducing carbon dioxide (CO2) emissions is by no means “dead.”<\/a><\/p>\n <\/p>\n The evolving Kerry-Graham-Lieberman legislation<\/a> has a cap-and-trade system at its heart for the electricity-generation <\/p>\n The competitor proposal from Senators Cantwell<\/a> and Collins<\/a>—the CLEAR Act<\/a>—has been labeled by those Senators as a “cap-and-dividend” approach, <\/p>\n And we should not forget that cap-and-trade continues to emerge as <\/p>\n But back to the main story—the dramatic change in the political <\/p>\n A rapid descent from politically correct to politically anathema<\/strong><\/p>\n <\/p>\n Among factors causing this change were: the economic recession; the <\/p>\n But the most important factor—by far—which led to the <\/p>\n The same fate would have befallen any front-running climate policy.<\/p>\n <\/p>\n Does anyone really believe that if a carbon tax had been the major <\/p>\n Likewise, if a multi-faceted regulatory approach (that would have <\/p>\n (There’s a minor caveat, namely, that environmental policy approaches that hide their costs frequently are politically favored over policies that make their costs visible, even if the former policy is actually more costly. A prime example is the broad political support for Corporate Average Fuel Economy<\/a> (CAFE) standards, relative to the more effective and less costly option <\/p>\n In general, any climate policy approach—if it was meaningful in its objectives and had any chance of being enacted—would have become the prime target of political skepticism and <\/p>\n Why is political support for climate policy action so low in the United States?<\/strong><\/p>\n <\/p>\n If much of the political hostility directed at cap-and-trade <\/p>\n For one thing, U.S. public support on this issue has decreased <\/p>\n Although the lagging economy (and consequent unemployment) is likely <\/p>\n Furthermore, the nature of the climate change problem itself helps <\/p>\n But the day after Cleveland’s Cuyahoga River caught on fire in 1969<\/a>, no article in The Cleveland Plain Dealer<\/a> commented that “the cause was uncertain, because rivers periodically <\/p>\n But climate change is distinctly different. Unlike the <\/p>\n Finally, it should be acknowledged that the fiercely partisan <\/p>\n An open-ended question<\/strong><\/p>\n <\/p>\n There are probably other factors that help explain the fall in Related Links:<\/strong><\/p>\n Lindsey ‘Green Economy’ Graham bashes the Clean Air Act<\/a><\/p>\n Let’s call setting a price on carbon “puppies”<\/a><\/p>\n
\nsector, with other sectors to be phased in later (and it employs
\nanother market-based approach, a series of fuel taxes for the
\ntransportation sector linked to the market price for allowances). Of
\ncourse, due to the evolving political climate, the three Senators will
\nprobably not call their system “cap-and-trade,” but will give it some
\nother creative label.<\/p>\n
\nbut it is nothing more nor less than a cap-and-trade system with a
\nparticular allocation mechanism (100 percent auction) and a particular use of
\nrevenues (75 percent directly rebated to households)—and, it should be
\nmentioned, some unfortunate and unnecessary restrictions<\/a> on allowance trading.<\/p>\n
\nthe preferred policy instrument to address climate change emissions
\nthroughout the industrialized world—in Europe<\/a>, Australia<\/a>, New Zealand<\/a>, and Japan<\/a> (as I wrote about in a recent post<\/a>).<\/p>\n
\nreception given in Washington to this cost-effective approach to
\nenvironmental protection.<\/p>\n
\nfinancial crisis (linked, in part, with real and perceived abuses in
\nfinancial markets) which thereby caused great suspicion about
\nmarkets in general and in particular about trading in intangible assets
\nsuch as emission allowances; and the complex nature of the Waxman-Markey legislation<\/a> (which is mainly not <\/strong>about cap-and-trade, but various regulatory approaches<\/a>).<\/p>\n
\nchange from politically correct to politically anathema was the simple
\nfact that cap-and-trade was the approach that was receiving the most serious consideration,
\nindeed the approach that had been passed by one of the houses of
\nCongress. This brought not only great scrutiny of the approach, but—more important—it meant that all of the hostility to action on climate change, mainly but not exclusively from Republicans and coal-state Democrats, was targeted at the policy du jour—cap-and-trade.<\/p>\n
\npolicy being considered in the House and Senate that it would have
\nreceived a more favorable rating from climate-action skeptics on the
\nright? If there’s any doubt about that, take note that Republicans in
\nthe Congress were unified and successful in demonizing cap-and-trade as
\n“cap-and-tax.”<\/p>\n
\nbeen vastly more costly for what would be achieved) had been the policy
\nunder consideration, would it have garnered greater political support? Of course not. If there is doubt about that, just observe the solid
\nRepublican Congressional hostility (and some announced Democratic
\nopposition) to the C02 regulatory pathway<\/a> that EPA has announced under its endangerment finding in response to the U.S. Supreme Court decision in Massachusetts vs. EPA<\/a>.<\/p>\n
\nof gasoline taxes. Of course, cap-and-trade can be said to obscure its
\ncosts relative to a carbon tax, but that hardly made much difference
\nonce opponents succeeded in labeling it “cap-and-tax.”)<\/p>\n
\nscorn. This has been the fate of cap-and-trade over the past nine
\nmonths.<\/p>\n
\nproposals in Washington has largely been due to hostility towards
\nclimate policy in general, this raises a further question, namely, why
\nhas there been so little political support in Washington for climate
\npolicy in general. Several reasons can be identified.<\/p>\n
\nsignificantly, as has been validated by a number of reliable polls,
\nincluding from the Gallup Organization<\/a>. Indeed, in January of this year, a Pew Research Center<\/a> poll found that “dealing with global warming” was ranked 21st among 21 possible priorities for the President and Congress. This drop
\nin public support is itself at least partly due to the state of the
\nnational economy, as public enthusiasm about environmental action has—for many decades—been found to be inversely correlated with various
\nmeasures of national economic well-being.<\/p>\n
\nthe major factor explaining the fall in public support for climate
\npolicy action, other contributing factors have been the so-called Climategate episode<\/a> of leaked emails from the University of East Anglia<\/a> and the damaged credibility of the Intergovernmental Panel on Climate Change<\/a> (IPCC) due to several errors in recent reports.<\/p>\n
\nto explain the relative apathy among the U.S. public. Nearly all of
\nour major environmental laws have been passed in the wake of
\nhighly-publicized environmental events or “disasters,” ranging from Love Canal<\/a> to the Cuyahoga River<\/a>.<\/p>\n
\ncatch on fire from natural causes.” On the contrary, it was
\nimmediately apparent that the cause was waste dumped into the river by
\nadjacent industries. A direct consequence of the “disaster” was, of
\ncourse, the Clean Water Act of 1972<\/a>.<\/p>\n
\nenvironmental threats addressed successfully in past legislation,
\nclimate change is essentially unobservable. You and I observe the
\nweather, not the climate. Until there is an obvious and sudden event—such as a loss of part of the Antarctic ice sheet leading to a
\ndisastrous sea-level rise—it’s unlikely that public opinion in the
\nUnited States will provide the bottom-up demand for action that has
\ninspired previous Congressional action on the environment over the past
\nforty years.<\/p>\n
\npolitical climate in Washington has completed the gradual erosion of
\nthe bi-partisan coalitions that had enacted key environmental laws over
\nfour decades. Add to this the commitment by the opposition party to
\ndeny the president any (more) political victories in this year of
\nmid-term Congressional elections, and the possibility of progressive
\nclimate policy action appears unlikely in the short term.<\/p>\n
\npublic and political support for climate policy action, as well as the
\nchanged politics of cap-and-trade.
\nI suspect that readers will tell me about these.<\/p>\n