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‘Cap-and-Divide: More Civil War on the Left’ (Classic MasterResource re-post)

By Robert Murphy -- May 21, 2010

[Editor note: This post from economist Robert Murphy originally appeared on 2-10-10. It is reprinted given the growing opposition to pricing carbon within the Democratic Party.]

George Carlin once asked, “Is it really possible to have a civil war?” Readers of Joe Romm’s pronouncements on greenhouse gas legislation would answer in the negative. Romm has always been a caustic critic of the “anti-science disinformers” who do not toe the line on the alleged scientific consensus, but lately he has turned his fire on former allies who dare to question the legislative developments in Washington.

An illustration of this internal squabbling is Romm’s recent post on the “cap and dividend” proposal put forth by Senators Cantwell and Collins. Here’s Romm’s take (emphasis added):

Climate politics can be very strange indeed. Because cap-and-trade bills like Waxman-Markey are seen as having no chance of passing the Senate, some enviros appear to be shifting their support to bills that are politically even less attractive and environmentally even less adequate.

The latest misguided missile is the Carbon Limits and Energy for America’s Renewal (CLEAR) Act put forward by Maria Cantwell (D-WA) and Susan Collins (R-ME) — full text and info here. Supporters call it “Cap-and-Dividend,” but right now I think the best term for it is, “Cap-and-Divide,” since it has no chance whatsoever of becoming law but is serving to undercut the tripartisan effort by Graham, Kerry, and Lieberman to develop a bill that might get 60 votes….

Cap-and-Divide…doesn’t even pass the environmental viability test, as the first-rate researchers at World Resources Institute have shown…. And while W-M is far from perfect environmentally, as I’ve said many times, it would enable a global deal. W-M’s biggest problem is that it can’t get 60 votes in the Senate or even close. But “cap-and-divide” is certainly less politically viable than Waxman-Markey or Kerry-Boxer.

On the plus side — from a climate perspective — CLEAR doesn’t allow any offsets and it auctions all of the allowances. Politically that would be fatal, of course, since it means little or no support for Cap-and-Divide from the utility industry, from the states with significant coal use, and from the agricultural states.…

The CLEAR Act does offer some token efforts to achieve regional equity, as the FAQ explains, but given the political uproar over even a small amount of (mis) perceived inequity in the Waxman-Markey allocation formula … this is one more reason the CLEAR Act approach is a political nonstarter. And again, the allowance formulation in the House bill is far more reasonable than is widely understood (see also Robert Stavins: “The appropriate characterization of the Waxman-Markey allocation is that more than 80% of the value of allowances go to consumers and public purposes, and less than 20% to private industry”).

It is interesting that Romm relies on Robert Stavins to bolster his point on this issue. In a previous post, when Stavins had the temerity to disagree with Romm’s position vis-a-vis greenhouse gas legislation, Romm wrote a post titled, “Robert Stavins can’t walk and chew gum at the same time.” Presumably Stavins is always sitting down when he writes things with which Romm agrees.

As far as Romm’s use of the term “cap and divide” to refer to the policy that is no doubt based on the proposal of Al Gore’s mentor James Hansen, I’ll let one of Romm’s disappointed fans explain the irony: “Joe, when you relabel Cantwell-Collins as “cap-and-divide”, you lower yourself to the level of the Republicans who refer to cap-and-trade as “cap-and-tax”.”

Other commenters were disappointed too, such as John Passacantando who wrote:

Joe, as a longtime reader of your blog I find your hostility towards an innovative approach perplexing and your blanket endorsement of WRI’s analysis out of character. We count on you to screen this stuff for us and WRI’s analysis is now in question as it appears it counts emissions reductions under the ACES bill in a perfect scenario and not so for the CLEAR Act….Further, I don’t think a legislative alternative to what appears to be a dead approach (cap and trade with its giant givebacks to the coal industry and its proposed creation of a new, unregulated trading bubble) is in any way divisive. Cap and dividend (the CLEAR Act) is a smart policy alternative, a real Plan B, filling in the current vacuum.

The various alliances in the pro-intervention camp have intrigued me. I disagree strongly with his recommendations, but the writings of James Hansen make sense to me. If I actually believed the world needed to sharply curtail global emissions very soon or risk catastrophe, I would be railing against Waxman-Markey (and the other political photo ops) from the rooftops too.

In contrast, it seems that many of the people in support of Waxman-Markey are incapable of seeing that even on their own terms it won’t achieve what they say is necessary to avert disaster. Global political leaders will not collectively take actions to sharply curtail fossil fuel use, when cheating will allow their own economies to flourish. The proponents of Waxman-Markey keep hoping against hope that a political compromise here, a backroom deal there, a concession until year XYZ … will all be worth it in the end, because the experts running the campaign will make sure of it.

Of course, interventionists who propose a straightforward globally-harmonized carbon tax are being similarly naive. But at least their policies are still abstract, and have not yet been codified into actual bills in Congress that we can analyze and see will clearly not achieve what their proponents claim. From the environmental left’s perspective, Waxman-Markey (and Kerry-Boxer) are very flawed bills indeed, and the only way Joe Romm (and Paul Krugman) can defend them is to dismiss any rivals as “politically infeasible.”

Romm and Krugman could very well be right when they tell their allies that a “better” bill is impossible. Yet this acknowledgment shouldn’t cause environmentalists to embrace Waxman-Markey–when they know it is a bad bill from their own point of view. It should instead lead them to reconsider their strategy of running to Washington, DC to save the world.

The civil war over cap and trade is how the political process works; its results are always crooked and counterproductive. In the debate over manmade climate change, the interventionists typically contrast a flawed, real-world market economy with a textbook vision of a benevolent and all-wise global dictator setting emission caps.

Such is a rigged comparison. When trying to decide whether to support new regulations coming out of DC and other legislative bodies, we must bring a healthy skepticism and indeed cynicism. How could anyone look at the history of politics and do otherwise?


Editor Note: MasterResource has a category under Climate Change, Left Civil War, with posts of related interest.

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