Carbon Pricing as the Public Option Redux?


Should progressives be skeptical about the White House's strategy to pass comprehensive climate change legislation? That strategy, as sketched out by senior administration officials, is to delay the debate about putting a price on carbon production until both the House and Senate have passed legislation. Timewise, if the Senate passes a bill, it would take until the late fall, after the elections, for House and Senate conferees to be appointed. 

If the strategy sounds familiar, that's because it seems to similar to the White House's approach to the more contentious aspects of health care reform, including the public option, which came to be seen by many on the left as the sine qua non of progress, and which President Obama never fully supported.

If the goal now is to get a bill that begins to wean the nation off of its addiction to oil, a carbon pricing scheme isn't needed. If the goal is to try to fix the problem of global warming, it is essential. Of course, a bill that includes carbon pricing, either in the form of a direct Pigouvian tax or an emissions credit trading system (cap-and-trade), would include the positive elements you'd find in a weaker bill. 

What would those elements be? 

As Grist's David Roberts points out, they are exactly what Obama called for in his speech last night -- more investment in renewable energy, higher CAFE standards, higher renewable standards, large-scale weatherization projects, more government investment in green tech, and more incentives to spur legacy energy companies' investment in green energy.

The Waxman-Markey bill that passed the House last year includes these provisions, and the Kerry-Lieberman bill that will ultimately get to the floor of the Senate will have them as well.  (Update: a source points out that K-L bill right now does NOT have nearly as strong provisions as W-M, and one implicit argument in Obama's speech was aimed at the Senate: at LEAST make your non carbon pricing stuff as strong the House's stuff.) 
They will be reconciled in conference. What Waxman-Markey has and the Senate does not (or will not, as of tomorrow) is cap-and-trade (the tough part), the mechanism through which the transition to a future of reduced greenhouse gas emissions is realized. 

Now, it was incredibly difficult to get cap-and-trade through the House. A lot of House Democrats had to take tough votes and are still being penalized for it by the Chamber of Commerce and outside groups railing against them for voting for "energy taxes" in an election year.

There clearly aren't enough Senate votes for cap-and-trade. Even senators who've promised not to filibuster a cap-and-trade bill, like Sherrod Brown, are not seen as certain ayes when it comes to the requisite 60 votes to cut off debate. (Privately, the White House believes there are about 52 yes votes at the moment.)

From the perspective of the White House, had Obama explicitly called for carbon pricing in his speech, he might have moved the debate in a way that would hurt the chances of getting any bill at all. They insist that he will put the full weight of his presidency behind cap-and-trade in conference. They insist that cap-and-trade is not analogous to the public option in the health care debate. (The White House came to view the public option less as a lodestone than as a nice piece of shiny quartz that would have been extremely difficult to implement well and wasn't essential to the edifice itself). Cap-and-trade is essential. 
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Marc Ambinder is an Atlantic contributing editor. He is also a senior contributor at Defense One, a contributing editor at GQ, and a regular contributor at The Week.

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