Carbon Showdown

Wall Street Journal
Thursday, April 17, 2008

The First Commandment of climate-change politics is that you can never be green enough – as President Bush learns anew every time he even attempts to address the issue. Critics were quick to claim a victory of sorts after his Rose Garden speech yesterday, while at the same time carrying on about half-measures and delay on "the planetary emergency."

Mr. Bush, however, made few departures from current policy. His larger purpose was to join a debate that so far has been conducted in a reality vacuum, and to force the global warmists to take responsibility for the carbon and greenhouse-gas regulation they say they favor.

The major policy revelation was Mr. Bush's announcement that the U.S. would seek to level off the growth of emissions by 2025. The Administration is setting this target in advance of the "major economies" summit this weekend in Paris. Participating are the 17 largest world-wide emitters, and the diplomatic mission is to persuade each, including China and India, to set its own reduction goals, or "aspirations."

One virtue of this process is that it bypasses current negotiations for a post-2012 Kyoto follow-up and dumps the mandates, global bureaucracies and sanctions that the United Nations would impose. Mr. Bush emphasized that the U.S. goal could be reasonably achieved (at least in theory) with the portfolio of binding and voluntary measures already in place domestically, perhaps with some adjustments at the margins and assuming advancements in clean technology. The President emphasized, too, the importance of nuclear power and the obstacles to fossil-fuel generation that provide more than 80% of current energy needs.

Greens are already deriding the goal as not enough, which may be one measure of its realism. A benefit of the major-economies route is to raise questions about what can be practically obtained, and at what cost. If the world is really serious about diminishing emissions, then China, India and other developing nations must be linked in. If every rich country cut emissions to zero tomorrow, the effect on global atmospheric CO2 concentrations would be at best negligible. So a strategy of incremental, feasible improvements is better than a one-sided infliction of costs on the U.S.

The political risk of a target and deadline is that it lends credence to a binding limit on carbon emissions, which is the premise of Congressional efforts to lay down a cap-and-trade program. The target will begin to squeeze the energy sectors today, while the expected technologies, such as carbon sequestration and cleaner burning generators, remain in the laboratory and may never materialize on a commercial scale.

The Administration's prior support for Beltway energy superstitions led to policy failures such as the biofuels and fuel-economy mandates. That said, the Administration has set carbon-reduction goals before – the 2002 concessions and the more recent "20-in-10" program. Billons in subsidies and tax preferences are now available for alternative technology. This is a preferable model (if often wasteful) to the command-and-control now fomenting on Capitol Hill.

Although U.S. CO2 emissions grew by only 2% between 2000 and 2005, everyone believes a major global warming bill is inevitable, and maybe it is. The rationale for yesterday's speech was to acknowledge these political realities but also to pair them with economic ones, expanding the debate to include costs as well as benefits.

Incompatible as it might be with liberal promises about painless global-warming controls, cap-and-trade is designed to disrupt the economy. The only signal that will tell consumers to make less carbon-intensive energy choices is higher prices. An analysis by American Council for Capital Formation and the National Association of Manufacturers of the Senate bill sponsored by Joe Lieberman and John Warner, likely to be the template for future Congressional action, concludes that it will result in as much as a 2.6% reduction in GDP by 2030.

Mr. Bush also went after the Democrats and green activists ginning up a regulatory crisis. Judicial interventions and political pressure are forcing regulators to retrofit existing environmental laws to incorporate global warming – costly purposes for which they were never intended.

This effort has been appalling even when graded on the usual Congressional curve of self-interest and buck-passing. Democrats want to take credit for crowd-pleasing goals while shifting the blame for the costs achieving them onto unaccountable bureaucrats. But if a cap-and-trade program really is coming, then lawmakers should, well, make laws.

The White House deserves credit for playing the political hand in front of it. It would have been easy enough to abdicate responsibility to the next occupant of the Oval Office, who will be far more likely to wave aside economic considerations in the interests of "doing something." The Bush stance gives the GOP some political guideposts for the coming argument, and someone from the McCain policy shop ought to be paying attention.