Not so hot
The landmark global warming bill introduced last week by Sens. Joe Lieberman (I-Conn.) and John W. Warner (R-Va.) might just stand a snowball’s chance in Malibu of passing, thanks to the prominence of its sponsors and growing awareness of the problem. That leaves many environmentalists uncertain whether to cheer or cry. The bill takes a wrongheaded approach toward curbing greenhouse gas emissions and may not reduce them enough to stave off catastrophic climate change. On the other hand, it’s probably the toughest measure to be expected from this session of Congress.
The Lieberman-Warner bill, S. 2191, would create a national cap-and-trade scheme for greenhouse gas emissions, in which polluters would get credits for the amount they could emit and could trade them among themselves. The cap would get tighter over time, until by 2050, emissions would be reduced to 63% below 2005 levels. That’s not bad, but it’s far less than the 80% below 1990 levels that many scientists believe the United States must achieve by mid-century if the world is to avoid the worst effects of global warming.
More troubling than the bill’s lack of ambition is its lack of economic common sense. Cap-and-trade is a politically popular idea in the U.S. and Europe, but it is an extremely complex mechanism that presents irresistible opportunities for cheating and profiteering that would deeply compromise its effectiveness. Rather than creating a new carbon-trading market primed for manipulation by clever polluters and traders, Congress should be focusing on simple carbon taxes that would assess polluters for the cost of their environmental damage and offset the resulting economic pain by lowering other taxes.
Since that isn’t likely to happen in a Congress allergic to the word “tax,” we may be stuck with the Lieberman-Warner approach. If so, there are ways to make the wrong path a little more right. As the bill works its way through the Environment and Public Works Committee, its system for allocating carbon credits should be revised.
Currently, about a quarter of the credits would be auctioned and the rest given away. Passing out free carbon allowances that are potentially worth billions of dollars makes it almost inevitable that politicians will unfairly divvy up the spoils among their supporters. If credits are allocated based on historical emissions, those who have polluted the most in the past end up being rewarded while green projects get little or nothing. All the credits should instead be auctioned, thus leveling the playing field and allowing the government to offset some of the expense for consumers -- proceeds from the auctions could be spent on socially beneficial programs such as renewable energy projects, or even rebated to consumers to help make up for their higher power bills.