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Why Does the Much-Touted Climate Bill Look Like It Was Stolen From the Republican Playbook?

The new climate bill exemplifies a Republican approach: Don't tell polluters what to do, bribe them and hope they do what you want.
 
 
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"Command and control" is a military term the Republicans long ago appropriated to caricature and condemn Democratic programs. Republicans like to contrast the Democrats' embrace of a command and control, regulation-based you-will-do-as-I-say-or-else strategy with their own, presumably, more effective market-based we-will-make-it-worthwhile-for-you-to-do-what-we-want approach.

Nowhere is the phrase "command and control" used more often and with more passion than when Republicans attack environmental regulation. The 2008 Republican Party platform, for example, declares, "Republicans caution against the doomsday climate change scenarios peddled by the aficionados of centralized command-and-control government."

Well, when it comes to climate change policy making, the Republican Party can justly claim a major victory for its philosophy. We may have a Democratic president and a Democratic Congress, but the American Clean Energy and Security Act of 2009 recently passed out of the House Energy and Commerce Committee is very much a Republican bill characterized by a paucity of sticks and a plethora of carrots.

In fact, President Barack Obama has publicly described the bill as his and the Democrats' preferred alternative to regulation. Without the bill, he has threatened, the EPA will directly regulate greenhouse-gas emissions, a power it was given by the Supreme Court in 2007 and which it announced it would exercise in April 2009. Indeed, the bill specifically prohibits Obama's EPA from regulating these emissions.

The bill's carbon-cap-and-trade provisions are by all reports its heart and soul. They exemplify a Republican approach: Don't tell polluters what to do, bribe them and hope they do what you want. Democrats have faked left and gone right.

The bill looks to reduce greenhouse-gas emissions by about 1 billion tons by 2020 and then gives away over 1 billion tons of carbon allowance to polluters free of charge. And then, adding insult to injury, it allows polluters to purchase 2 billion tons of carbon offsets, three-quarters of which could come from overseas. In other words, companies could satisfy the Act's provisions without reducing greenhouse-gas emissions within the United States at all, by buying offsets from other countries that will be extremely difficult, if not impossible, to monitor!

To be successful, a market-based strategy must raise the price of carbon sufficiently to change corporate and personal behavior. But the bill clearly demonstrates the lack of political will in Washington to impose such a dramatic price increase. Indeed, the bill explicitly notes that the purpose for rewarding free allowances in such enormous quantities is to mitigate price increases.

As a result, the EPA estimates the bill would raise the price of a gallon of gasoline by about 20 cents. No one can suggest with a straight face that such a trivial price increase will change driving habits.

The plain truth is that the cap-and-trade provisions of the bill are ineffectual. They may even be pernicious because they would lock us into a convoluted and largely unworkable Republican-inspired global cap-and-trade architecture and a massive pollution permit giveaway program from which it will become increasingly difficult for us to extricate ourselves in the coming years.

An equally important political truth is that the cap-and-trade provisions are unnecessary. For while the Democrats have begun to embrace anti-regulation, market-based strategies, the evidence is clear that virtually all of the progress we've made in building a clean-energy society has been achieved a result of command-and-control policies.

The new federal vehicle fuel-efficiency mandate is a case in point. It alone could achieve about a third of the Act's greenhouse-gas reduction goals by 2020. And the impact could potentially be even greater because the federal government has given California the right to significantly raise those standards, something it may do as early as 2016, with the real prospect of 10 to 15 states following its lead.

 
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