There are some gloomy reactions to the Waxman/Markey bill around the interwebs—see, for instance, Ezra Klein, Matt Yglesias, Kevin Drum, and Brad Plumer. I’m not going to claim the bill is perfect, but I think the pessimism is excessive.
It comes down to this: these guys are focusing too much on the carbon cap portion of the bill, which is only one of four major provisions. First off, this is a messaging disaster— Dems on the Hill are begging me to stop talking so much about “cap-and-trade,” which means nothing to the public and is unpopular to the extent anyone understands it. They want the focus on clean energy, efficiency, and jobs, which are dealt with more in the other parts of the bill.
More substantively, focusing unduly on the carbon part of the bill makes the bill’s flaws look bigger and more consequential than they really are. (Though, again, I acknowledge that there are serious flaws.) Some of the flaws in the carbon part, many necessary concessions to political reality, are compensated in part by other parts.
It’s important to remember that Henry Waxman is, by virtually universal acclaim, one of the smartest and most savvy legislators in Congress. He knows the limits of the possible and the art of the deal. He’s also one of the greenest, sponsor of 2007’s ambitious Safe Climate Act. Same goes for Markey: he knows the legislative terrain around these issues better than anybody, having focused intently on them via his select committee for the last two years.
So these guys are trying to build the strongest possible bill that can still garner majority support.
Two of the bill’s big flaws can be seen in that light: the silence on permit allocations and the high number (some two billion tons) of offsets allowed to meet targets.
People are wildly overreacting on allocations. It’s not like auctioning permits is off the table—or would have been set in stone if they’d put it in the discussion draft. They’re leaving it to committee discussion, so that some of the more skittish members can feel like they’re involved and invested in the final product. I’m sure it will be some mix of auction and free allocation in the end, which is inevitable no matter what Waxman and Markey say.
The offsets, yes, are legitimately awful. A new report from PointCarbon says there’s no way the domestic offset market can even supply enough to satisfy the bill’s requirements. But this, too, was a big concession to legislators who worry about costs.
The worry with allowing too many offsets is that short-term action can be delayed. But that’s precisely what the energy and grid portions of the bill are designed to avoid. They are designed to create an immediate market driver for renewables, and to put together the infrastructure to enable them.
The worry with giving away permits is that energy prices will rise and hurt vulnerable families. But that’s exactly what the efficiency portion of the bill is designed to avoid—efficiency lowers energy bills even as energy costs rise.
Like everyone else I’m still digesting the bill, but it looks to me like Waxman and Markey have been fairly savvy about accomplishing via other parts of the bill what can not (yet) be accomplished by the carbon part, at least to some extent. In a sense, it’s almost smarter politically to get greens howling about the carbon portion, since it distracts attention from the fact that the energy portions will compel enormous short-term action.
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Comments
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kwhilden Posted 7:38 am
07 Apr 2009
Kevin Whilden
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Ken Ward Posted 8:16 am
08 Apr 2009
1. The only relevant factor in setting US climate policy is the balance of power on the Hill.
2. We should trust Waxman and Markey to cut the best deal within these parameters.
3. The draft will be strengthened.
4. Criticism of weaknesses in Markey/Waxman hurt prospects for strengthening the bill.
5. The flaws in carbon emissions regulation (though significant) are more than compensated by good language on alternatives and, in any event, are necessary concessions to political reality.
All our experience tells us exactly the opposite.
1. The only relevant factor in winning strong environmental action is how much pressure is placed on Congress and the President, and the more vocal, vigorous and disruptive the pressure, the better the result.
2. Waxman and Markey should look to us to improve their political position (via #1.)
3. Absent #1. and #2., the draft is as strong as the bill will ever be.
4. The bill is a sham as written, because there isn’t enough power to pass a real one. That power cannot be won by pretending that Markey/Waxman is functional climate policy, but only by denouncing the totality of the thing and demanding a real solution.
5. Any bill written within present “political reality” can't work, because present “reality” requires that the coal industry be unmolested.
The only way to try and get around coal would be investment in alternatives on the scale of what Shellenberger & Nordhaus call for, which Markey/Waxman comes nowhere near, and such a project – that is, expansive enough to actually reduce coal use by bringing renewables and efficiency costs and availability below coal – is no more doable within present political realities than effective emissions limits.
The precautionary bottom line is that coal emissions must be stopped and the political bottom line is that coal can’t be stopped. One or the other has to give and our job is to make sure that coal loses. Signing up as shills for Markey/Waxman fool's gold is the worst choice we can make.
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