May 26, 2009 at 10:36AM
by Jim DiPeso
What are we to make of the Waxman-Markey product that the sausage machine by the Potomac has ground out so far?
Nothing is more important for addressing climate change than putting a price on carbon and signaling to energy markets that free disposal of CO2 into the atmosphere carries costs and is not appropriate.
Waxman-Markey does that and its the only game in town so far, so Congresswoman Mary Bono Macks sole Republican vote to move the bill out of committee and keep the process moving forward was the correct decision for her to make.
Waxman-Markey does a whole lot more, however. This thing has more moving parts than an aircraft carrier, and theyre stuck together with the political duct tape known as money.
To put a clean price on carbon, auctioning emissions allowances would be the most economically rational approach. To win over coal Democrats, however, Waxman and Markey handed out free allowances like candy. You do what you have to do to get a deal, I suppose, but the extent of the handouts has the smell of bacon fryin in the morning.
The renewable portfolio standard as currently written may be worse than doing nothing. A National Renewable Energy Laboratory analysis released last week concluded that a portfolio standard similar to Waxman-Markeys requirements would actually result in less renewable energy development than letting existing state standards carry the freight.
The bills offsets and carbon market regulatory mechanisms, with the rulemakings that would follow, would take many bureaucratic person-hours to understand, draft, implement, enforce, and adjust.
But were not polishing any apples here for the bills Republican critics. With the exception of Bono Mack and a few others, House Republicans have checked out of any serious attempt to work constructively on improving the legislation.
Their proposed amendments, for the most part, were based on the premise that America cannot afford to do anything about climate change and shouldnt bother trying. Their rhetoric spoke of deferring on this matter to the worlds largest communist country, a most curious position for so-called conservatives to take.
Anyway, it might be time to start talking about a potentially simpler approach: a straight carbon tax swapped for other tax reductions, coupled with a mechanism to ensure that the tax brings emissions down to climate-safe levels.