“Waxman-Markey … seeks a first in economic history: rationing without scarcity or price inflation. [It] allows generous ‘offsets’ so that carbon-based energy does not, in fact, become scarce. The bill does, however, contain a multitude of new regulations, product-efficiency mandates, and spending programs that will require extensive managerial attention from both the public and private sectors, though to much less effect than promised.”
– Steven F. Hayward and Kenneth P. Green, July 2009
The Waxman-Markey energy bill passed by the House of Representatives is a great illustration of how the government can take an idea that sounds good in theory – emission trading – and turn it into a nightmarish piece of legislation that is larded with pork; perverted by special-interest horse-trading; and will most likely be not only ineffective, but will produce perverse and negative consequences for both the economy and the environment.
As my colleague Steven Hayward and I point out in our most recent AEI Environment and Energy Outlook:
Unfortunately, the Senate is using Waxman-Markey as its launching point for crafting their own legislation. As Steve Hayward jokes, given that Waxman-Markey gives away 85% of the emission permits, and given that the Senate hasn’t started its own horse-trading and buy-offs yet, by the time this is all done, the government might give away 150% of the the available permits. But there is nothing funny about a 1,428-page bill that has been likened to an energy road to serfdom.
The devil is in the details, as it is often said. Waxman-Markey’s devil is monstrously big, and it begins qualitatively, not only quantitatively, by setting up the machinery of control that would politicize energy for an open-ended future. Watering down a bad bill is not good enough.