Michele Bachmann: Isn’t It Ironic?

Not all cap-and-trade proposals are created equal.

But don’t try telling that to Minnesota Representative Michele Bachmann. In a commentary in today’s Minneapolis Star-Tribune, she weighs in with her views on Lieberman-Warner. Yet despite her best efforts, she does not even come close to making a case against cap-and-trade policies.

Central to her opposition is the allegation that cap-and-trade is really ‘tax-and-spend.’ Well, sort of. Though I would argue that carbon pricing is a tax in the same way that paying to use the U.S. Post Office is. It’s not a ‘tax’ for the sake of raising money; it’s a fee for a service.

Bachmann largely misses the mark in her criticisms of LW. She identifies problems with this bill without demonstrating at all convincingly that it is cap-and-trade policies that are flawed. Rather than approaching our energy needs with an open mind, she is all-too-eager to talk about what she believes cannot be done. I’m sure inspired. For example, she cites Europe’s problems with their own cap-and-trade system implemented a few years ago. This is roughly the rhetorical equivalent of having a doctor tell you that you’re having an allergic reaction and then leave the exam room. The question most people would ask next is: what’s causing it?

In Europe, permits were largely given away to companies, who were able to get permits for as much carbon as they said they needed. It reminds me, in more ways than one, of the Charmin commercial where the little bear takes too much toilet paper when left to his own devices. True, in both of these scenarios you really don’t want to undershoot, but it also meant that the system was entirely ineffective at limiting carbon emissions. However, in the words of the ever wise and only slightly bitter Alanis Morissette: “you live, you learn.” (Alanis probably didn’t say that first. But whoever did say it first probably didn’t play God in a Jay and Silent Bob movie. Who do you trust?)

Bachmann does identify a serious issue that will likely plague any U.S. energy legislation: China. China will, I’m sure, be the subject of future posts. Briefly, however, it is worth noting that ignoring our obligation to address energy here at home until China does something themselves is like cutting off our nose to spite our face. Or, even better, like waiting to get help for an addiction until Amy Winehouse does. If we can develop renewable technology that will cheaply meet our energy needs, then China’s clean energy future will stage a comeback. It can be done: just ask Britney Spears. I do want a piece of the new Britney! Supply and demand!

Sorry, I’m back. Really, Bachmann says it best herself:

There is no coherent reason to have to choose between economic growth and environmental protection. It’s a false notion that we must conserve our way out of our energy crisis, or pillage the environment. We can grow our economy, improve our energy security and pass on a clean natural heritage to our children.

Cap-and-trade doesn’t force a choice, it just makes the price of doing business reflect all the costs of doing business. This better valuation will grow our economy, improve our energy security and pass on a clean natural heritage to our children. Yes Alanis, it is a little bit ironic.

-Diana

 

Senatorial Shenanigans

So it seems like the big deal these days, asides from the end(ish…) of the brouhaha that was the 2008 Democratic primary, is the Lieberman-Warner legislation (LW, as I affectionately refer to it). This bill calls for a cap-and-trade system, and the details have economic conservatives and environmentalists alike worked into a lather (incidentally, no one really anticipates that this bill will pass, but let’s not miss an opportunity to get worked up).

It’s my instinct that when extremists on both sides hate something, it’s on the right track. LW isn’t perfect, but the idea of a cap-and-trade system does have some serious street cred. It combines the merits of markets (Bill O’Reilly says: “Yea! I LOVE markets!”) with personal responsibility (don’t worry liberals, there’s something coming for you too) with, wait for it, helping the environment and revitalizing the economy.

Maybe that sounds a little pie in the sky to you (mmm… pie…), but hear me out. The problem with the current system is that technically, both everyone and no one own the sky. Industry argues that a certain amount of pollution is unavoidable, which may well be true, but there is also no cost to them to pollute lots in order to make more money. After all, their competitors are doing it too. Industry isn’t a bogeyman, it’s just that the incentives are all wrong, which is also why the market isn’t going to fix global warming on its own. Cap-and-trade systems alter these incentives by placing a monetary value on pollution. Put another way: make polluters pay for pollution and then the market will spur development of cleaner, cheaper technology.

But Diana, if the polluters have to pay for pollution, won’t they just pass those costs along to their customers?

That’s a fair point, and a legitimate concern. But the beauty of cap-and-trade systems, especially the type illustrated by Peter Barnes is that the money raised by auctioning off permits can be returned to consumers. In this way, people will be able to keep up with rising energy costs, and will also have capital to invest in weatherization or other measures that will keep down their energy bills in the long term. It’s actually a quite nifty trick.

There are a number of nuances to cap-and-trade that I have yet to go into. This is partly because I don’t want to abuse the attention span of my (rapidly growing!?!) readership (not to mention the attention span of the author). Also, if I answered all of your questions now, you wouldn’t have a reason to come back and read my blog again, would you? Feel free to comment on specific areas that you think I missed or am wrong about, and I’ll address those first. Later dudes.

-Diana