Monday, May 14, 2007

WaPo Can't Quite Get It   [Chris Horner]

Today's Washington Post lead editorial — "Warming Proposals: the presidential candidates and climate change" — lauds candidate Sen. Chris Dodd (D-CT) for daring to propose a carbon tax as part of his road to the White House. He ought to check a map, as Al Gore might counsel him:

"I worked as vice-president to enact a carbon tax. Clinton indulged me against the advice of his economic team... One House of Congress passed it, the other defeated it by one vote then watered it down and what remained was a pitiful 5 cent per gallon gasoline tax.” Even that turned out too much for some: “That contributed to our losing Congress two years later to Newt Gingrich.”"

(Notably, the Post, too, seems to remember that heartbreak, pondering aloud, "Would a tax end up being so riddled with loopholes as to be ineffective?"...the Clinton-Gore tax having collapsed after being "swiss-cheesed" with exemptions).

Nonetheless, the editorial contains this paragraph, remarkable mostly for what it does not say:

"In theory, a well-designed cap-and-trade system — one that does not simply hand out allowances but auctions some off, that applies across all sectors of the economy and that has some flexibility to keep energy prices stable — could achieve the same ends as a carbon tax. In practice in Europe, cap and trade, at least in its early stages, has proved ineffective and susceptible to manipulation. Those who advocate this approach — including not only Mr. McCain but Democrats Hillary Rodham Clinton, Barack Obama and John Edwards — ought to explain why this cumbersome system is better than a straightforward tax."

Indeed, they ought to, though they ought to also explain the more pressing question: given Europe's failure, acknowledged in understated fashion by the Post if just about no one on Capitol Hill where Members are falling over themselves to sign on to such a measure, how does your proposal avoid the panoply of the Emissions Trading Scheme's pitfalls? Not simply handing out (over-produced, thanks again to the political manipulation inherent in designing and implementing such schemes) allocations is a start, but doesn't get you there. And, please, discard this "some flexibility to keep energy prices stable", as that's just setting the price at the capped ceiling, buffering any possible, as-yet-undiscovered promise for such a scheme to actually reduce emissions (the European Environment Agency famously having replied to an inquiring MEP that it could not identify a covered entity that had actually reduced emissions as a result of the scheme, outside of course of closing shop and/or moving elsewhere).

The overriding problem both on the Hill and, to a lesser but still extant extent the edit board of the Post, is a failure to come to grips with reality: the "well-designed" carbon cap-and-trade scheme is lounging around with the Loch Ness Monster at the 7-11 where Elvis works the late shift, flipping through this month's "Victories of Appeasement". Such a scheme is inherently subject to gamesmanship and manipulation rising all the way to outright corruption. Even a BRAC-style commission couldn't insulate itself from the pressures to reward pals which are precisely what led Enron to be the biggest fan of them all.

All of which makes one wonder, what in the world is the Post referring to when it confidently (if without authority) assures us that carbon cap-and-trade "has been a promising approach"? By this they can only mean that Europe has made an awful lot of (grandiose, unfulfilled, and expensive) promises about it.

05/14 11:44 AMShare