A refreshing dose of honesty (Global Warming Legislation)

Economist: A refreshing dose of honesty

Maria Cantwell and the politics of global warming.

... Enter Maria Cantwell, the junior senator from Washington state. She is pushing a simpler, more voter-friendly version of cap-and-trade, called “cap-and-dividend”. Under her bill, the government would impose a ceiling on carbon emissions each year. Producers and importers of fossil fuels will have to buy permits. The permits would be auctioned, raising vast sums of money. Most of that money would be divided evenly among all Americans. The bill would raise energy prices, of course, and therefore the price of everything that requires energy to make or distribute. But a family of four would receive perhaps $1000 a year, which would more than make up for it, reckons Ms Cantwell. Cap-and-dividend would set a price on carbon, thus giving Americans a powerful incentive to burn less dirty fuel. It would also raise the rewards for investing in clean energy. And it would leave all but the richest 20% of Americans—who use the most energy—materially better off, she says.

Ms Cantwell’s bill is refreshingly simple. At a mere 40 pages, it is one-thirty-sixth as long as the monstrous House bill (known as “Waxman-Markey”, after its sponsors), which would regulate everything from televisions to “bottle-type water dispensers” and is completely incomprehensible to a layman. Instead of auctioning permits to emit, Waxman-Markey gives 85% of them away, at least at first. This is staggeringly inefficient: permits would go to those with political clout rather than those who value them most. No one is proud of this—Mr Obama wanted a 100% auction—but House Democrats decided that the only way to pass the bill was to hand out billions of dollars of goodies to groups that might otherwise oppose it. (There was plenty of pork left over for its supporters, too.) ...

... This challenges the conventional wisdom in Washington, DC, that the only way to pass a global-warming bill is to disguise what’s in it. Leading Democrats try to sell cap-and-trade as a way to create jobs and wean America from its addiction to foreign oil. (It’s about “jobs, jobs, jobs and jobs,” said Nancy Pelosi, the speaker, last year.) Focus groups say this message ought to resonate. Frank Luntz, a pollster, released a study last month showing that voters are unswayed by melting ice caps but will support an energy bill that sticks it to the Saudis and creates American jobs. In real life, though, voters hear counter-arguments. Sure, cap-and-trade will create jobs, but it will destroy them, too. If the goal is to reduce dependence on foreign energy, why not mine more American coal? The only sound reason for acting to curb global warming is to curb global warming. Ms Cantwell does not put it so bluntly, but her bill speaks for itself.

Comments

[Peggy]

It's nice to hear some "common sense" coming out of my state's leaders! We need lots more where this came from. The best part is "40 pages." Call it was it is and tell us what it does... ;^)

[Michael W. Kruse]

I agree with article that carbon tax is probably the most equitable and efficient way to reduce carbon emissions but like the article says that ain't gonna happen. A genuine Cap and Trade would likely work well with a mandatory 100% auction. That apparently isn't going to happen either. Something along the lines of Cantwell's proposal seems like the next best option to me.