Is Obama Going Soft on Carbon Cap-and-Trade?

President Barack Obama speaking yesterday at a news conference.

Photo: Alex Wong / Getty Images

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In his prime time news conference last night, President Obama repeatedly asserted that an energy overhaul was an investment the U.S. has to make starting this year, starting with the budget Congress is now negotiating. He repeatedly framed renewable energy and energy efficiency as potential drivers of future economic growth, along with health care, education and deficit reduction.

"The budget I submitted to Congress will build our economic recovery on a stronger foundation so that we don't face another crisis like this 10 or 20 years from now," Obama said. "We invest in the renewable sources of energy that will lead to new jobs, new businesses, and less dependence on foreign oil."

Behind the scenes, the Environmental Protection Agency is poised to declare carbon dioxide a pollutant that does real harm and which the EPA can regulate, with or without new Congressional approval. That's essentially what the Supreme Court told the Bush Administration, but the Bush EPA refused to push forward with the rules that its scientists said were necessary to control greenhouse gases. The Obama EPA appears far less timid.

The prevailing wisdom in Washington, D.C. is that economists -- who say a simple tax on carbon is the best and most efficient way to reduce greenhouse gases and bolster alternative clean energy technologies in the market -- are wrong, and that a cap-and-trade regulation is the most politically viable way to reduce greenhouse gases. That means setting an overall cap on emissions across the country; allotting every power plant, factory or other polluter a set of pollution credits; and then allowing them to trade. That way cleaner facilities earn credits they can sell to dirtier facilities, as long as overall pollution decreases. It's a system that's already worked well to reduce acid rain and smog.

The important thing, as Obama himself said Tuesday, is that the price of burning fossil fuels comes to reflect the true cost to the environment, the climate and ultimately the health and viability of much of life on Earth. Now, spewing out tons of carbon costs nothing, though it will mean trillions of dollars worth of damages in the coming decades, as the warming climate unleashes more strong storms and wildfires, damages air quality and spreads new diseases, deluges coastlines even while it spawns new Dust Bowl droughts, and sends countless wildlife species toward extinction.

"I've said that we've got to have a serious energy policy that frees ourselves from dependence on foreign oil and makes clean energy the profitable kind of energy," he said in response to one question.

Obama was somewhat less forceful, however, when asked if the cap-and-trade regulation in his budget was a must-have, or whether it was negotiable. Here's what he said when asked that question:

"When it comes to cap-and-trade, the broader principle is that we've got to move to a new energy era, and that means moving away from polluting energy sources towards cleaner energy sources. That is a potential engine for economic growth.

"I think cap-and-trade is the best way, from my perspective, to achieve some of those gains, because what it does is it starts pricing the pollution that's being sent into the atmosphere.

"The way it's structured has to take into account regional differences. It has to protect consumers from huge spikes in electricity prices. So there are a lot of technical issues that are going to have to be sorted through."

Seeing any wiggle room in that statement may be grasping at straws. After all, if Congress fails to act, the EPA can assert its own authority.

And, his chief strategist, David Axelrod, in a post-news conference interview with MSNBC, didn't rule out the idea of passing the budget in such a way that it will require only 51 votes in the senate, rather than 60. That's a procedural technicality -- something most of us couldn't care less about -- but it is an indication that Obama may be willing to be more forceful about passing his priorities, including a cap-and-trade global warming regulation, than even he let on during last night's news conference.

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