Have Republicans and global warming deniers reverted to pre-1980s thinking on cap and trade?

Question

Harvard economist Robert Stavins and MIT economist (and Member of the Council of Economic Advisers in the George H. W. Bush administration) Dick Schmalensee wrote an op-ed in response to the US Senate's failure to pass a climate bill with a carbon cap and trade system.

They write Republicans "should resist demonizing market-based approaches to environmental protection and reverting to pre-1980s thinking that saddled business and consumers with needless costs. In fact, market-based policies should be embraced, not condemned by Republicans (as well as Democrats). After all, these policies were innovations developed by conservatives in the Reagan, George H. W. Bush, and George W. Bush administrations (and once strongly condemned by liberals).

In the 1980s, President Ronald Reagan’s Environmental Protection Agency successfully put in place a cap-and-trade system to phase out leaded gasoline. The result was a more rapid elimination of leaded gasoline from the marketplace than anyone had anticipated, and at a savings of some $250 million per year, compared with a conventional no-trade, command-and-control approach.

In June 1989, President George H. W. Bush proposed the use of a cap-and-trade system to cut by half sulfur dioxide emissions from coal-fired power plants and consequent acid rain....That cap-and-trade system has cut sulfur dioxide emissions by 50 percent, and has saved electricity companies — and hence shareholders and ratepayers — some $1 billion per year compared with a conventional, non-market approach."

"To reject this legacy and embrace the failed 1970s policies of one-size-fits-all regulatory mandates would signify unilateral surrender of principled support for markets....Virtually all economists agree on a market-based approach to reduce carbon dioxide emissions. Some favor carbon taxes combined with revenue-neutral cuts in distortionary taxes, whereas others support cap-and-trade mechanisms — or “cap-and-dividend,’’ with revenues from auctioned allowances refunded directly to citizens."

"A price on carbon is the least costly way to provide meaningful incentives for technology innovation and diffusion, reduce emissions from fossil fuels, and drive energy efficiency. In the long run, it can reduce our use of oil and drive our transportation system toward alternative energy sources.

Market-based approaches to environmental protection – including cap-and-trade – should be lauded, not condemned, by political leaders, no matter what their party affiliation. Demonizing cap-and-trade in the short term will turn out to be a mistake with serious long-term consequences for the economy, for business, and for consumers."
http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2010/07/27/the_power_of_cap_and__trade/

Do you agree that Republicans and global warming deniers have reverted to pre-1980s thinking on cap and trade?

Answer 1

The GOP is nothing like the party of Reagan and Bush Sr. Reagan represented real fiscal conservatism (yes he ran up a deficit but that was selective use of fiscal policy to stimulate an economy stuck in stagflation. It was nothing like the raping of a strong economy by Bush Jr.) The current GOP party is only a party of hateful Christians. They care about their social litmus test but understand nothing about economics. The following the simple-minded teachings of Rush and nothing else. The hate science, hate education and hate complex thinking. We do not have a thoughtful conservative party in America.



Many posters here continue to show that they have totally forgotten that Cap-and-Trade was a highly effective economic strategy championed by the party of Reagan. But that party is dead.

Answer 2

No, and there is a big difference between removing harmful products from the market such as lead and sulfur and what you want to do.



One component that your crowd keeps on forgetting is that India and China have a third of the population and are currently the two fastest growing emitters of green house gases. The United States and Europe are either flat or actually reducing their carbon emissions. The real point is are we going to further destroy the manufacturing base in the United States to still see an increase in total green house gas emissions?

Answer 3

NO! Why use negative legislation to promote a positive action. This type of legislation creates a large bureaucracy and high cost which in the end is paid by the consumer. Why not just offer a tax credit to clean up emissions. A tax credit will make companies more competitive forcing others to follow suit. It is simple and requires a much smaller operating cost to administer. The consumer will pay less in the end.

Answer 4

I would suggest that those were entirely different circumstances that were both well-defined and relatively small in scope. The problem with a carbon cap and trade system is that it is set up like a tax system in determining what consititutes carbon output. It can be abused and misused. The otehr problem that may, note may occur, is that if the cap are placed too low, too quickly, then the cost of the carbon credits can soar, causing the cost to the consumer to also soar. There are many opportunities for abuse in this case that can also increase the cost to the consumer. It is not a matter of whether cap and trade can work in a relatively inexpensive manner, it is whether or not it can fail and the effects of its failure. The cap and trade can actually cause the cost of a ton of carbon to increase without limit.



You mentioned a carbon tax, which I would actually like much better, because it at least places a limit on how high the price of a tonne of carbon can go. Combine this with a decrease in taxes in another area and I would be perfectly amenable to this. My problem is the apparent need of the democrats to increase taxes without regard for the fact that they promised not to do so. Hiding those taxes in Cap and trade does not mean that they do not exist. Pointing to assumptions of huge govt efficiency does not inspire confidence. Give a true cost and then let it be evaluated. With a carbon tax we can get a close estimate of the actual cost, with a Cap and trade we get estimates that vary by a factor of 30. You may be right that C&T is the best way of doing it, but if you are wrong, you will have seriously hurt the economy and you will have insured that the US in general never agrees to helping an environmental cause.

Answer 5

Pretty much. It is indeed ironic that the party which fought so hard to champion market-based responses to environmental problems has stuck the knife in over the biggest one faced so far. It is clear that the Republicans killed the cap and trade bill, pure and simple, and they did it for short term political gain as they are aggressively and consistently pursuing a strategy of trying to hamstring everything that Obama does. It reeks of cynicism and it will cost us all in the long run because they are not interesting in doing what is best for the USA, let alone the rest of the world, simply what is best for their short term political chances.



Has it always been this way? No. Rarely has a party been *so* partisan and *so* unwilling to negotiate. It is a deliberate strategy that is working politically, but can hardly be appreciated on any other level.



PS I don't think that cap is trade is perfect and think that a carbon tax has much to recommend it, as does simply closing down the worst coal-powered plants (shooting the donkey - a powerful image). But to answer Dana's question, yes, the Republicans are playing nothing but politics on this, without any attempt at regard for what might be best for the nation or the world.

Answer 6

This stuff practically make me sick. It is unbearable to see people support cap and trade when it is undeniable that it would cripple our economy!!!! Look into it and research it with an open mind. Alternative energy is efficient in the way that it dosent use as many resources however when it comes down to cost-profit it fails to compare. Im for all alternative energy however we cannot replace coal, oil and natural gas. Cap and trade is scary that people can even support it. It worked for eliminating certain problems within an energy source but sacrificing conventional energy for inefficient expensive energy is a joke.



Besides despite what Al Gore is telling you there is not sufficient proof that Global Warming or "Climate Change as their calling it these days because its obvious it isnt a constant trend" is caused by humans. Is a land covered by solar panels and windmills more appealing than a few out of site mines and rigs?

Answer 7

I didnt read anything about "global warming deniers" in that article, in fact it says:



"... If some conservatives oppose energy or climate policies because of disagreement about the threat of climate change or the costs of those policies, so be it...."



So, based on that article, the answer to the "global warming deniers" part of your question, is NO, because the article clearly respects the opinion of "global warming deniers" (as you call them).



The "Republican" part of your question, well, should we always make it all about democrats vs republicans?

FYI: There were democrats in Congress who voted against Cap & Trade as there were some republicans who voted YES.

Answer 8

I agree with CO2's answer. I don't trust them at all. They will use it for a tax. It wpn't be a small tax on an additive to gasoline like lead was. It will become a tax on every single thing that gets manufactured, transported, imported, exported, or driven. It wll be like the VAT, an excuse to tax everything.



I agree that Republicans, "should resist demonizing market-based approaches to environmental protection" when it is justified. In this case, CO2 hasn't been shown to drive climate and taxing it is clearly not justified. Just assuming the government doesnt' get any dime from cap and trade, which isn't a reasonable scenario, than it would simply be placing a regulatory burden without good purpose.



I don't get my science from economists just for the record.

Answer 9

Yes I do agree, but I think the pre-1980's thinking is wrong, and that cap and trade is also wrong, so to me your either/or presentation is misleading, as usual.



The correct approach is for the EPA to just do its job, with no more dilly dallying around.



In 1992 we had the list -- Carol Browner did, I saw it in her hand, of the 1000 worst coal fired plants. None of them were in compliance with EPA's standards at that time, a fortiori they would be ridiculously out of compliance today.



The EPA Administrator should send warning letters to the owners of these plants giving them 6 months to come up to SOX NOX and CO2 standards or close down.



That's what the EPA is there for. Not to create a three-ring circus around getting its job done. Not to hold 1000 rulemakings. Not to litigate 1000 disputes.



The EPA has the power and the right, but not the spine or the guts to do its job.



I say they should do it, do it now, do it right, or give me a refund on the tax money they suck up and hand out to their employees.



Stop making things more complicated. Stop delay, obfuscation, and proceduralizing things.



If your ID card says "Active" then be active.



To me this calls to mind the scene in the movie "Patton" where the General is trying to get a column of 60 tanks across a bridge, and the entire column is being held up by a farmer with his donkey and cart that is stuck on the bridge. The Sergeant has been arguing with the farmer for half an hour.



Patton (George C. Scott) speeds to the bridge in his jeep, walks up to the donkey, shoots it in the head, tells the nearest men to tip the donkey and the cart off the bridge -- total elapsed time since the arrival of Patton 15 seconds, and the tank column is moving once again.



Sometimes you just have to cut through the crap. This is not 1970 when the cap and trade program was first proposed. This is 40 years later, and the donkey is on the bridge. If I were the EPA Administrator, I would be like Patton. I would get the program of CO2 minimization moving again, but cutting through the crap, which at this time includes cap and trade -- a funhouse of byzantine processes, procedures, rulemakings and appeals that promises only that billion dollar corporations with 50 lawyers on staff can hold out forever (I speak as a former associate counsel to a Fortune 50 company).



Closing dirty coal plants would not be a catastrophe. 20% would probably come into compliance. 20% could probably be quickly and cheaply converted over to natural gas burning. The rest would be replaced by market forces. So, you see my Patton-like solution is also a market based solution, but it's focused on replacement of capacity (not selling indulgences).

Answer 10

It really doesn't matter. The fact is that now the democrats & environmentalist want it so it can't be a good idea.

Answer 11

We dont deny global warming, we just deny that SUV's are causing global warming. Global warming is also happening on Mars...are you going to tell me the martians have soccer moms?

Answer 12

When Bill Clinton was president the Senate voted 100-0 AGAINST signing Kyoto Treaty. So when you mention Republicans, it seem like you are admitting this is a political issue, not a scientific one. Well, I agree with that.

Answer 13

No. I don't think it is a change in thinking, it is just a change in policy. It is a matter of them wanting to say "NO" to everything proposed by Obama. In order to do that they are willing to tell any lie and willing to disregard any principle they previously held to be important.