A Cap And Trade Calamity?

New Republic ^ | March 23, 2009 | Willam Galston

[reaganaut1]

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.

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. The Midwest, which has already been hit hard by the collapse of manufacturing, would take a second blow. This matters because the Democratic Party is an uneasy coalition between the coasts and the interior, symbolized by bitter fight between Henry Waxman and John Dingell for the chairmanship of the House Energy and Commerce Committee. 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.

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 to pay for the Making Work Pay tax credit and its proposed spending on clear energy technology. 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.

[reaganaut1]

What a calamity. We may be spared a huge energy tax and the extra government spending it was supposed to fund.

[Shermy]

There is no “trade-off.” Cap and trade does nothing for the environment, but lines traders’ pockets and crafty inventors of carbon offsets.

[penowa]

If they sign on to the Copenhagen-UN agreement, won’t that do the same thing only worse to our economy? That looks like where they are headed since cap and trade may not fly with the elected Democrats who are afraid they’ll be bounced from office at the first opportunity once voters see their utility bills.

[steelyourfaith]

 

Beam me to Planet Gore !