New Haven California governor Arnold Schwarzenegger, once the proud owner of a fleet of gas-guzzling Humvees, got religion on global warming pretty quickly after taking office. And in one of the great political reversals of the decade, he has emerged as a major figure in the environmental movement.
Last week Yale University hosted the signing by Schwarzenegger and a handful of other governors of a "Declaration on Climate Change" (no substance, just lofty principles). He delivered the keynote address to a large crowd of overachieving tree-huggers. If it had been a different audience, you might say he threw them some red meat. But given the venue, let's just say Schwarzenegger was dishing prime tofu.
But he also railed against the "enviro-wimps" who prevent him from taking tougher action on climate change. Environmentalists want renewable energy, he said, "but they don't want you to put it anywhere. . . . It's not just businesses that slows things down, it's not just Republicans that have slowed things down, it's also Democrats and sometimes those environmental activists that slow things down." Schwarzenegger also blamed Washington, and while he was careful not to name names, everybody understood that the man really slowing things down keeps office hours in an oval room.
Yet just two days before, President Bush had made an Arnold-like U-turn of his own, delivering a major speech on global warming in which he set a target date for capping greenhouse emissions (delightfully distant 2025), and spoke of "working toward a climate agreement that includes the meaningful participation of every major economy." Right on cue, conservatives began to worry that "the last line of defense has been breached" in the battle to prevent costly, and perhaps unnecessary, regulation of greenhouse gas emissions.
In truth, the defense had long ago been breached. Blowing off the threat from global warming, or more specifically the political support for addressing that threat, is no longer a serious option for this administration or its successor. All three remaining presidential candidates have offered concrete proposals for reining in greenhouse gas emissions, Congress is agitating for federal legislation, and the states, led by California, are getting antsy to act on their own. Put simply, the days of resolute federal inaction will soon be over regardless of what Bush does or doesn't say.
The president's speech was an acknowledgment of this reality and perhaps also a tactical retreat to better lines of defense against the socialist, antigrowth ambitions of climate activists. For instance, insisting as Bush did that "every major economy" sign onto any international climate agreement makes international action on climate change quite unlikely. China, now the world's largest emitter of greenhouse gases, has no intention of reducing its emissions at the expense of economic growth. Likewise India, the world's fifth largest emitter, has rejected any binding reduction in emissions and recently announced plans to move forward with the construction of an "ultra mega" coal-fired power plant despite protests from environmental campaigners. Bush rightly points out that without their participation, no agreement can be meaningful. This is the first new line of defense.
But the inability to achieve international consensus is no impediment to Washington deciding to cripple the U.S. economy all by itself. The Supreme Court ruled last April that greenhouse gas emissions count as pollutants under the Clean Air Act, and that the Environmental Protection Agency must accordingly start regulating carbon emissions--the most ubiquitous byproduct of an industrial economy. This means the EPA could regulate huge chunks of the economy with a much heavier hand than Congress has ever dared to. It could shut down coal-fired power plants, regulate SUVs out of existence, abolish incandescent light bulbs (oops, that's already happening). Of course, Congress could rewrite the Clean Air Act to rein in this judicial mischief-making, but unless John Dingell has some blackmail photos of Nancy Pelosi, don't hold your breath.
The EPA, for now, is dragging its heels, and has moved into a phase of seeking public comment--no consequential regulatory decisions will be made until after Bush leaves office. But as the president stated in his speech, "decisions with such far-reaching impact should not be left to unelected regulators and judges." This principle is a second line of defense. If an Obama administration directs the EPA to impose costly and burdensome regulations, the political counter-attack will follow Bush's script.
Meanwhile, progressive governors have rediscovered the joys of states' rights, as they seek to circumvent the Bush administration and impose their own regulatory solutions. With Schwarzenegger at the fore, several states had sought to impose more stringent standards for automobile emissions, but the EPA derailed the effort late last year when it refused to grant California the necessary waiver.
As the nation's largest automobile market, California's legislation would have effectively superseded national fuel economy standards (and handicapped American car companies already staggering from what looks like a recession). In his speech, the president made clear that "such decisions should be made by the elected representatives of the people they affect." That is to say, California shouldn't rule the rest of the country. Consider this a third line of defense.
Of course, most Democrats in Congress would be all too happy to give up state action on global warming in favor of a comprehensive national solution called "cap-and-trade"--an idea that John McCain is unfortunately enamored of. Cap-and-trade would set an absolute limit on national greenhouse gas emissions while creating a market for tradeable carbon credits. In a cap-and-trade system, companies that reduce their emissions below some level set by regulators would profit from selling credits to those that exceed their allotment. All three presidential candidates have backed cap-and-trade as the basis of any future climate change legislation.
But cap-and-trade has serious drawbacks, which is why Bush has signaled his intention to veto any such legislation. It would, for starters, be an exceedingly complex legal regime, allowing special interests to manipulate the regulations to their own advantage. More worrisome, cap-and-trade obscures the true costs of regulation. It is a tax by another name, and the costs would be largely hidden--Americans would see energy prices rise, with no way of determining what portion of the increase had been imposed by the political class in Washington.
The cost, it's safe to guess, would be enormous (that's why it would need to be hidden). At the governors conference at Yale, university president Richard Levin offered a Kerryesque defense: "Who among us would not be willing to pay a tax of one half percent to save the planet?" Moments later, Rajendra K. Pachauri, chair of the Intergovernmental Panel on Climate Change and corecipient with Al Gore of the 2007 Nobel Peace Prize, put the cost even higher, envisioning an international regulatory regime under which, "in 2013, the growing cost to the global economy will be less than 3 percent of GDP." Who among us would be willing to pay so much?
Almost nobody. Not to mention, history shows that the rich pay for environmental remediation, not the poor; a world poorer by 3 percent a year will be that much less able to adapt to unpredictable changes in climate. And as Bush said in his speech, "the American people deserve an honest assessment of the costs, benefits and feasibility of any proposed solution." Cap-and-trade is feasible only because the costs cannot be assessed by the voters. Transparency, then, is the fourth principle, and a demand for it will serve as bulwark against the opaque system of cap-and-trade.
Any successful defense must be flexible and pragmatic, and at times opportunistic. The next administration may be determined to act with or without the participation of India and China. The best hope for those who understand that economic growth is not the cause of environmental degradation but the precondition for ameliorating it will be to insist on the basic principles of fairness, efficiency, and transparency.
As applied to greenhouse emissions, these principles lead straight down a well-paved road to a solution many conservatives will find hellish: a direct tax on carbon emissions.
Unlike with cap-and-trade, a carbon tax would allow Americans to see the increased cost of energy every time they filled up at the pump, paid the electric bill, or bought a plane ticket. They would see it right there on the receipt, and they would be able to hold their representatives accountable for the rate. The simple truth--as conservatives especially have been known to point out--is that you get less of something if you tax it. This is why serious environmentalists would be on board: Cap-and-trade, as its name implies, merely caps emissions. A carbon tax, by some estimates, would prompt an 11 percent drop in total emissions within a year of being enacted. The political trick would be to sweeten the blow with countervailing cuts in income and payroll taxes.
Doing no harm in response to global warming hysterics was one of the great achievements of the Bush administration, but indifference is not a tenable political strategy. Schwarzenegger and McCain figured this out not because they are mavericks, but because they are wily and successful politicians. So is Bush, in his own way. But politicians need more than defensive tactics. And if all else fails, pushing a transparent, national carbon tax will be the best chance for preventing great harm--and if it passes it will turn the politics of global warming upside down.
Michael Goldfarb is a Phillips Foundation fellow and online editor of THE WEEKLY STANDARD.