In his February 24 address to Congress, President Obama asked for "legislation that places a market-based cap on carbon pollution." But don't assume that this administration, in contrast to its predecessor, is overly concerned about the threat to humanity from global warming.
When the president unveiled his budget later that week, it became clear that even if so-called cap-and-trade legislation is passed this year, the administration has no plans to start taxing emissions until 2012. A president who warned of catastrophe should Congress delay implementing his economic agenda seems in no particular rush to cut down on greenhouse emissions. No doubt he has been quietly briefed on just how devastating his cap-and-trade regime would be to a fragile economy.
So it's a hollow victory for climate alarmists. As it happens, besides being an election year, 2012 is also supposed to be the point of no return for action on climate change. Rajendra Pachauri, chair of the Intergovernmental Panel on Climate Change and co-recipient with Al Gore of the Nobel Peace Prize, warned after collecting his prize in Norway that "if there's no action before 2012, that's too late."
Last year Gore himself opined that "we have less than 10 years to make dramatic changes in our global warming pollution lest we lose our ability to ever recover from this environmental crisis." Such warnings have become routine--20 years ago, in 1989, the head of the New York office of the United Nations Environment Program, Noel Brown, issued the same dire prediction, claiming that there was a "10-year window of opportunity" to stop the runaway train of global warming.
After two decades in which environmentalists have urged immediate government action or else, a unified Democratic government has finally made such action possible--but it is, thankfully, not imminent or assured. The timing of any legislation will be determined by the political climate in Washington, and not the temperature in the Arctic.
Whatever else it accomplishes, cap and trade will be a huge tax on the productive sectors of the economy. The "cap" is a government-imposed limit on total emissions; companies then buy permits from the government to emit pollutants up to the amount of the cap, and can then trade these permits with each other. The process of issuing and pricing the permits will be an invitation to astonishing amounts of lobbying and favor-seeking. Cap and trade, in the words of MIT's Richard Lindzen, will be "a bureaucrat's dream."
According to a recently released study by the George C. Marshall Institute, the cost of cap and trade to the overall economy--depending on the size and scope of the legislation--is anywhere from a 0.3 percent to 3 percent drop in GDP in 2015 below what it would otherwise be. The report, as noted by the National Center for Policy Analysis, estimated that Americans would see their "electricity prices jumping 5-15 percent by 2015, natural gas prices up 12-50 percent by 2015, and gasoline prices up 9-145 percent by 2015." The numbers are staggering, which is why the Obama administration plans to divert some of the permit revenues to its "making work pay" tax credit, reimbursing low-income individuals up to $400 a year and $800 for couples. It won't be enough.
The Senate failed to pass cap-and- trade legislation in 2007--the Lieberman-Warner bill--which the Marshall Institute estimates would have cost each American household $1,100 in 2008, rising to $1,437 by 2015, and $2,979 in 2050. Obama's plan is far more ambitious, and would be a far greater burden to American taxpayers. The administration projects that the tax would raise some $650 billion for federal coffers between 2012 and 2019.
The other reason for not hurrying up with a carbon tax may well be that the science underlying climate-change alarmism has taken a beating. "It's been a catastrophic year" for global warming activists, says Christopher Horner of the Competitive Enterprise Institute, an industry-funded think-tank. All of a sudden, "the observations are very inconvenient."
In May 2008, Nature magazine published a peer-reviewed study that came to a startling conclusion: "Global surface temperature may not increase over the next decade, as natural climate variations in the North Atlantic and tropical Pacific temporarily offset the projected anthropogenic [manmade] warming."
Just as problematic, a few months prior to that report NASA's Jet Propulsion Laboratory revealed the results of a new study of ocean temperatures. "The oceans have not warmed up at all over the past four or five years," NPR reported, and "that could mean global warming has taken a breather." In fact, the oceans--like the rest of the planet--have cooled of late. The scientist overseeing the research protested that the cooling was "not anything really significant," and that the results shouldn't be interpreted as evidence against warming, but with surface temperatures and water temperatures declining, the case for a radical reining-in of industrial economies has become even weaker than it already was.
The public is right to be skeptical. According to a Pew poll released in the days following Barack Obama's inauguration, Americans rank "dealing with global warming" dead last among 20 policy priorities for this administration--just 30 percent believe it should be a top priority, 8 percentage points less than two years ago, and well behind such concerns as strengthening the military (44 percent), defending the United States against terrorism (76 percent), and strengthening the economy (85 percent).
Marc Morano, an aide to Senator Jim Inhofe (Capitol Hill's most notorious climate change skeptic), barrages the press daily with news stories and press releases casting further doubt on global warming. He thinks he's winning, and the numbers seem to confirm it. "The Earth has failed to warm," he says, and despite "all the money spent, the awards, the press, the chorus from Hollywood, it hasn't made a dent" in public opinion.
There's a poll for that, too. Last April, Gallup released numbers showing that just 37 percent of Americans worry "a great deal" about global warming, "a percentage that is roughly the same as the one Gallup measured 19 years ago." And if 37 percent sounds high, it's not. Out of 12 environmental problems Gallup polled, the 37 percent figure put global warming just third from the bottom, ahead of only urban sprawl and acid rain--a term that hasn't made a headline on the front page of the New York Times in nine years.
The skeptics may not be winning the debate in the media, but they're "winning the reality" according to Bjørn Lomborg, author of the bestseller The Skeptical Environmentalist. Lomborg points out that despite "tremendous amounts of worrying .??.??. if you look at actual reductions in CO2 over the last few years, nothing." Lomborg isn't opposed to government action, but he derides cap-and-trade regimes as a way for politicians to "put on a tax and get people to think it's a cool thing."
But unlike Europe, which implemented its own cap-and-trade system in 2005, Americans don't seem to think taxes on carbon are particularly "cool." Warner-Lieberman fell a dozen votes short of cloture, with several Democrats crossing the aisle to help Republicans kill it. Morano says that if the Senate takes up the issue again, it could produce an "immigration-style shutdown" on the Hill.
Which is not to say that cap and trade can't be rammed through this year. There are a lot more Democratic votes than there were in 2007, as well as a popular president who seems to be giving the measure his full support. And whatever its effect on global levels of greenhouse gases, it will allow the federal government to "control every aspect of our economy," says Horner. In Obama's Washington, that's unfortunately a recommendation.