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Home Front: Politix
A Cap And Trade Calamity? (or not)
2009-03-24
I'd go with "not."

No time for in-line - have at it, Rantburgers.

It is gradually dawning on Washington that cap-and-trade legislation won't pass anytime soon--certainly not this year, and probably not next year either. One reason is public opinion: a Gallup survey released last week revealed that "for the first time in Gallup's 25-year history of asking Americans about the trade-off between environmental protection and economic growth, a majority of Americans say economic growth should be given the priority, even if the environment suffers to some extent." Just four years ago, protecting the environment enjoyed a 17-point edge; today, the advantage goes to the economy, 51-42.
Anytime you have a sour economy you force people to consider a basic question: what's more important, protecting the polar bears or feeding our children? Guess who wins on that one.
The second reason is regional politics. Support for environmental legislation is strongest on the coasts, weakest in the interior areas that depend more heavily on coal-fired power plants.
It's not the power plants that make the coasts different ...
The Midwest, which has already been hit hard by the collapse of manufacturing, would take a second blow.
Sure; Detroit is doing so well so let's cap and trade the auto industry. They can handle it ...
This matters because the Democratic Party is an uneasy coalition between the fruits coasts and the nuts interior, symbolized by bitter fight between Henry Waxman and John Dingell for the chairmanship of the House Energy and Commerce Committee.
Too bad it isn't a death match ...
It is hard to imagine Midwestern Democrats voting for cap-and-trade in current economic circumstances, and perhaps not in any economic circumstances--that is, unless they receive credible assurances of dollar-for-dollar offsets against the higher costs their constituents would have to bear.
Which isn't the point of cap and trade: if you give all the money back, you provide no 'incentive' to cut carbon use. And if you give the money back the pols have no new money to spend ...
This reality creates two difficulties for the Obama administration. On the fiscal front, the administration is counting on $629 billion in revenues from cap-and-trade ...
But it won't be that high since the economy will tank further and thus depress tax revenues ...
... to pay for the Making Work Pay tax credit and its proposed spending on clear energy technology.
If 'green energy' could be done today, we'd be doing it. We're all for R & D but the simple fact is, 'green energy' isn't economical.
Failure to pass cap-and-trade would force the administration to choose between cherished programs and an even higher budget deficit, already estimated by the CBO at $9.3 trillion over the next decade.
And the one thing you know for sure is that the CBO is low-balling their higher revision of Obama's terribly low-balled estimate. The ten year deficit will be much, much higher as the economy continues to sputter.
On the diplomatic front, when the Copenhagen Climate Conference convenes this December, the administration faces the prospect of showing up empty-handed. Senior officials acknowledge the potential embarrassment for a president so clearly determined to assert American global leadership on energy and environmental issues but see no easy way out.
If he wants to show 'leadership' he can propose this:

1) America to drill for oil and gas at home
2) America to build 200 new nuclear power plants
3) America to invest heavily in polywell research
4) America to invest more in clean coal
5) America to put a 25 cent per gallon tax on gasoline

Most American would support all that. So would intelligent people around the world.
In the face of these inconvenient developments, the administration's options are limited. If the president remains committed to Making Work Pay and clean energy investment, he will probably have to agree to equivalent spending reductions elsewhere,
GFL on that one.
because fiscal moderates within his own party will insist. Internationally, the president's team would be wise to prepare other key participants in the Copenhagen conference for the near-certainty that the stance of the United States on emissions reductions will be based mostly on good intentions rather than settled policy. The administration, quite simply, won't be close to meeting its own standards of success on environmental issues--and it is hard to erect credibility on a foundation of overpromising and underperforming.
But they'll continue to try....
Posted by:Barbara Skolaut

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