Waxman-Markey, and in defense of coal and the people who use it

The House passed comprehensive climate change legislation yesterday, and despite the fact that we still have a steep hill to climb before cap and trade becomes law, and despite the fact that it is a far, far cry from what the IPCC says needs to be done to stop global warming before it gets unmanageable, it is a signal moment. In 2007, the judicial branch said EPA had the authority to regulate carbon dioxide, in 2008 we elected an executive who intended to do it, and in 2009, this from the legislative. Even the GOP opposition, during yesterday’s debate, almost all of which I watched, and almost all of which was intolerable, did not dispute the premise that something has to be done. This was, simply a big step in the right direction.

A few things about it, though:

First, 219 votes. It was a squeaker, for sure, but that makes it appear just a bit closer than it actually was. This was a hard vote for lots of congresspeople, and I suspect there were probably 10 or so more votes that the leadership could have had had they been needed. Once they got to 218, I think about 5-10 Democrats with tough races were grateful to be cleared to vote “no.”

Secondly, and more interestingly and importantly, I’ve been getting a lot of questions in the past couple of days, from the left, about whether or not Waxman-Markey was actually good enough to support. A month ago, I wrote that it was, despite the fact that it was loaded up with giveaways to industry. A month ago, it was less loaded up with giveaways than it is now. In fact, the Democratic leadership scheduling it for a floor vote despite the fact that they weren’t sure they had all the votes was like yelling sub-prime mortgage in a pool of hungry derivatives traders. Market price of a vote: a new $50 million taxpayer-funded hurricane center.

A lot of what was horse-traded in the last three days was in a 300-something page amendment that came out about 16 hours before yesterday’s vote, so it will take the next week to put a real figure on the aggregate price of bribes paid to get this deal done. The worst of it as probably the deal that Waxman had to make with Agriculture Chairman Collin Peterson to get a dozen or two aggie Democrats to come along, giving the USDA the lead role in making a determination about whether a farm project to sequester carbon meets the exacting environmental standards to earn offset credits that can be substituted for emissions allowances under the cap. In truth, that deal really does weaken the cap and trade program significantly.

Nevertheless, I continue to support it. The crux of the matter is this: From an environmental standpoint, it doesn’t matter (much) whether you give people emissions allowances for free, or whether you auction them off. Either way, the market price for the right to emit a ton of carbon is about the same (despite the claim to the contrary in today’s NYT, a mistake a find remarkable), and firms will choose to abate when they can do so for less than that price. Same result. I think a lot of the complaints from the left don’t understand that. A lot of people seem to think that by giving away allowances to polluters, you undermine the environmental objective of the bill, and that simply isn’t so. There are things to complain about – things that do undermine the environmental objective, and the fact that the environmental objective really should be stronger – but that isn’t one of them.

The difference between free and auctioned allowances is in who pays, and here again, I think the complaints from my left get it wrong, though more subjectively so. Auctioned allowances are what has come to be called a “polluter pays” system, whereas with free allocations, we all pay; taxpayers pay.

But step back. Generating electricity from coal is not an evil act. Certainly, pollution from coal plants and other sources can be a public health risk, and some of the most pernicious sins of private industry have been and continue to be the protection of private wealth over public health, sometimes by lying and cheating. But carbon dioxide pollution is not that. People who own businesses that emit carbon dioxide have the misfortune of being in the wrong place at the wrong time. Coal is cheap and abundant, and though those who profit from its burning must make a transition, it is wrong to saddle them with too much of the burden of that transition. Especially since Americans who depend on coal-fired electricity are disproportionately poor, it makes sense that we should all pitch in. “Polluter pays” isn’t exactly right when it comes to carbon dioxide.

This is a complex topic. I got an up-close look at the process over the last two weeks, so post a comment if you want to know more about a piece of it, and I’ll do my best.