Gotta Have The Cap!

I highly recommend Dave Roberts' comments on Nordhaus and Shellinger's critique of the environmental movement. I'm not so deeply immersed in that world as to have a particularly sophisticated take on all this, but I'm pleased to see that I agree with Roberts, and as such, feel much safer about my opinion.

In short, N&S argue that the environmental movement is too pessimistic, and too focused on solutions that require pain, like a carbon tax. What we need is more happy talk, and more public investment in disruptive -- which is to say, visionary -- energy research. In its weak form, this argument is right, but banal. Indeed, we're already getting a lot of that talk about the green economy, and the Apollo Alliance, and all the rest. In its strong form, it's wrong and dangerous. Public investment is great. But if you offer folks the easy, but insufficient, solution, and stop talking about the harder, but more necessary, steps, what you'll get is the easy, painless solution. And not only is a well-conducted public investment program likely to prove insufficient, but it's not likely to exist at all. Roberts explains:

In practice, "alternative energy" subsidies have overwhelmingly gone to things like corn ethanol, nuclear energy, "clean coal," and hydrogen; the way things are going we can expect liquid coal to hop on the bandwagon as well.

Those are not the investments I'd make, but I don't get to decide. Neither does Greenpeace or NRDC; neither do S&N. Congress decides, and Congress is heavily subject to the very power dynamics that have kept fossil fuels on top for so long. Perhaps green groups know this, and know that a massive push for public investment would likely be co-opted in ways that do more harm than good. Even a Congress acting in good faith is unlikely to prove particularly adept at selecting the technologies that will "break through."

Targeted subsidies are simply too easily converted into pork. It's one of those times when government failure likely exceeds market failure. And, in any case, you're going to get them one way or the other. But in the context of a larger bill, they can play an important role, becoming the pork which'll help grease a cap-and-trade plan so it can slip through Congress. Enact the subsidies on their own and you'll get nothing -- neither a really good public investment program, nor a carbon limit. They need to be part of the overall bill. But at the end of the day, everyone knows what the center of the policy agenda is, and you're not going to fool business into overlooking the carbon cap by talking about the subsidy program. Try, and you're liable to lose the cap, as business repurposes your rhetoric to argue that the subsidies are sufficient, and should be tried first.

The UN Conference on Global Warming: Pre-Thoughts

I'm in New York for a week of multilateralism and do-goodery. Multilateralism in the form of a UN meeting on climate change today, and do-goodery as demonstrated by the Clinton Global Initiative. Night One was a dinner with some UN Climate Change folks who wanted to Meet The Bloggers.

Sadly, meeting the bloggers involved a lot of asking what a blog is and isn't, and whether we check facts, and how we differ from an op-ed page, and a lot of other conversational avenues that I thought were exhausted in early-2005. Dinner sort of hummed along in this agreeable-but-dull fashion till one of the UN types shattered the comity by angrily saying that none of us had asked passionate questions about climate change yet, and didn't we understand this would kill us all and it mattered!? And we did! What we hadn't been convinced of was that anything going on here mattered.

Here's the problem: When it comes to pressuring major nations to undertake policy initiatives they're not favorably disposed towards, the UN is rather toothless. It can quietly persuade or publicly shame. Up till now, it has sought quiet persuasion, with little to no effect on the behavior of America, China, or India. It has not sent Secretary Moon to forthrightly blast our apparent indifference, and the consequences our shortsighted sluggishness will have on the rest of the world. This is not something the UN feels able to do.

There is value, of course, in the UN's role as a neutral platform for the hashing out of international affairs, but the value in amassing that credibility is also that it can occasionally be used. It is often used, of course, against smaller, weaker nations. It is not used against the institution's more powerful patrons, like the US. And without a radical change on that front, there is little the UN can do on climate change, save signal its willingness to serve as a procedural host when the day comes that the relevant countries decide to take action.

In that respect, laying groundwork with other nations may indeed serve as a useful accelerant on the day when President Clinton/Obama/Edwards/Dodd/Richardson takes office and decides to reverse American policy on climate change. As an official sitting near Matt explained, smaller countries don't have the technical capacity to move rapidly forward with action plans and carbon analyses. Getting that work underway during this lull is actually quite useful. But it relies entirely on an internal transformation in American politics -- it doesn't really hold hope for hastening such an evolution.

But the UN is not alone in this slightly bizarre unwillingness to exert real leverage. Western Europe says it believes the science on global warming. The science on global warming suggests that the effects of global warming will be nothing less than catastrophic for Western Europe. Given that, it's genuinely surprising to me that countries like France, the UK, Germany, and so forth haven't banded together to exert real pressure on America, China, and India.

You'd think this would be an area in which the EU both could, but more importantly should, act with a singularity of purpose and flex its aggregate might. If it doesn't, the consequences will be devastating. And yet there's no real evidence that the EU is ready to rely on anything save rhetoric -- no sanctions, no threats of sanctions, no preferred trading deal to countries willing to moderate carbon output....nothing. Meanwhile, Sarkozy's threatening to bomb Iran if it goes nuclear, despite the fact that a nuclear Iran is, whatever else you think about it, of relatively little danger to France, while warming poses a tremendous threat. The whole thing is weird, and demonstrates a rather worrying distance between the emphasis various countries and institutions say they're putting on climate change, and how much political capital they're really willing to risk to arrest the planet's carbon output.

Brian has further thoughts here. And I'll be blogging all through the meetings today.

The Bill Bradley Plus Coalition

by Nicholas Beaudrot of Electoral Math

In 2000, fomer Sen. Bill Bradley (D-NJ) gave Al Gore something of a scare with his 47-51 near-win in the New Hampshire primary. But seasoned political observers understood that Bradley would have a hard time competing in South Carolina, Wisconsin, and so forth. Why? Exit polls showed that Bradley could only muster a majority among liberals, voters with college degrees, and households earning more than $100,000 a year. That wasn't even enough to win a low turnout primary, even in a state with lots of affluent, socially-liberal Democrats. As the Democratic primaries moved to areas with more working class and culturally moderate/conservative voters, Bradley's fortunes would just get worse.

Which brings us to Ned Lamont.

Based on the exit polls, Lamont's victory represents an incremental expansion of Bill Bradley's coalition. While Bradley was only able to earn the votes of 45% of voters earning less than $50K/year, Lamont managed to pick up 48%. In the middle of the spectrum, Lamont's 53% majority outpaced Bradley by four percent. Both candidates earned the same marks from households earning $100,000 or more (the exit poll shows Bradley with 49% of the vote, so it's off by a hair), so improvements among working class and middle class voters represent the margin of victory. The educational profile tells the same story. Lamont actually fared five points worse than Bradley among high school dropouts, but earned a majority of those with "some college" education—a two-year degree, or perhaps a year or two at a four year school.

So, yes, Matt, Tom Edsall is a bit off the mark here. Lamont's victory depended just as much on fighting to a draw among those earning six figures as it did on the small advantage he had with "the elite".

This "Bill Bradley Plus" coalition that pushed Lamont to victory is essentially the coalition laid out in The Emerging Democratic Majority—labor, minorities, white liberals, and upper-middle class professionals. Over the past three or four decades, workers in sectors like nursing, engineering, and financial services have grown in number and become more and more Democratic. Essentially, these professionals will replace farmers and the shrinking labor base as the third leg of the Democratic Coalition. Tuesday was perhaps the first time they were large enough in number to impact an election (Tim Kaine's victory in Virginia might have done the trick as well).

Now, before we get to excited over the prospects of this coalition, keep in mind that it's only strong enough to win a Democratic primary in Connecticut against an incumbent with lots of baggage. And if more working class constituents are displaced, it's not clear to me that bread-and-butter economic issues will keep their salience within the Party. But maybe—just maybe—Lamont's appeal in the general election will push more former Republican voters into the (D) column.

Global Warming vs. Global Awareness

by Nicholas Beaudrot of Electoral Math

An Inconvenient Truth is almost certainly worth seeing, even if you're alreay a dyed-in-the-wool supporter of the Kyoto protocol. Matt Yglesias gets the movie's impact more or less right: "issue films" like this one will only cause political change if they fundamentally alter the current political landscape, by pushing the issue to the forefront such that political pain comes to any candidate who doesn't take global warming seriously. Whether Al Gore's vehicle can propel climate change to the top of the issue pile all on its own is unclear. To reach tens of millions of viewers, Truth will have to find its way into full-scale release in thousands of theaters across the cuntry; it's currently slated to reach about 300 theaters by the end of June.

There's A Word For This...

Man, I don't know what it is with this President. It's just like flip:

In 2001, Vice President Dick Cheney said, "Conservation may be a sign of personal virtue, but it cannot be the basis of a sound energy policy." Also that year, Ari Fleischer, then Mr. Bush's press secretary, responded to a question about reducing American energy consumption by saying "that's a big no."

"The president believes that it's an American way of life," Mr. Fleischer said.

And flop:

With fears mounting that high energy costs will crimp economic growth, President Bush called on Americans yesterday to conserve gasoline by driving less. He also issued a directive for all federal agencies to cut their own energy use and to encourage employees to use public transportation.

"We can all pitch in," Mr. Bush said. "People just need to recognize that the storms have caused disruption," he added, and that if Americans are able to avoid going "on a trip that's not essential, that would be helpful."

Nice to see him end up on the right side, at least. Now, if the no-pain President could cajole his corporate sponsors into letting him raise CAFE standards, I might even register an uptick of respect for the guy.

Three Objections

Matt's got a TAP column today laying out his objections to CAFE standards. Readers will be unsurprised to know I find it unconvincing. But who knows -- I may be wrong. So here are three objections for the gas tax, and maybe if advocated could answer there, I could better understand their case:

• Matt writes: "CAFE rules are, in effect, a tax on gas-guzzlers that's used to subsidize buyers for the purchase of more efficient cars. Companies meet the standards by offering a discount on their more efficient models and by charging higher prices than they otherwise would on less efficient models." Okay. What's wrong with that? Is there some reason we want gas-guzzlers on the road?

• Matt argues that "[a] much better way of reducing consumption would just be to tax it straightforwardly with higher gasoline taxes." He then, to eliminate the regressivity, advocates plowing the savings into a progressive tax cut, or end of the year rebates or something.

Why does anyone think this will pass? And, if we take the progressive step and pound in that you'll somehow get the money back, why do we think it'll change behavior? But really, the question here is what possible convergence of circumstances makes a nation furious at high gas prices agree to pay even more at the pump?

• "Some families share one automobile; others have one for each parent and one for each teenager. To put it in crude, self-interested terms, some Americans -- like, say, me -- don't own a car at all. We're the true heroes of energy efficiency, and CAFE rules provide us with no benefits whatsoever. But if you want to subsidize energy conservation, it makes no sense to leave out people who conserve through not driving or carpooling."

Actually, it does. Matt doesn't use the subway because he's virtuous, he does it because he's got a subway to take. If he lived in LA, he'd have a car. I live in LA. I have, and need, a car. In a month, I'll live in DC. I'm not sure I'll take my car. In any case, I'll mostly use the subway. Not because I'm more virtuous there than here, but because the subway makes sense there and is effectively nonexistent here. What Matt's suggesting amounts to a subsidy for urbanites because driving, for most people, isn't a choice, it's decided by geography.

My grandparents used to live in Basking Ridge, NJ. The market was 8 miles away, the hairdresser 15, work 12, and so forth. They weren't doing anything wrong by driving -- it's just what they had to do. The commercial areas were quite separated from the residential communities. If you do blue collar work in Irvine or Newport Beach, you have to live in Garden Grove or Fountain Valley. You simply have to drive -- there's no other viable option. And is it really fair to subsidize the rich guy who can live near his employer or the urbanite who can take the subway and instead penalize someone who hasn't the money to rent near his work? Why?

Most of this country has a car culture. It's not a moral decision, it's a simple question of where you can afford to live and where your job/kids/life requires you to go. And those who drive more are not morally equivalent to those who drive frivolously -- a commute to work so you can own a house is different than a road trip to TJ. If you could somehow separate those two out with a gas tax, maybe you'd have a case, but until you can, attacking the commuter is another way of saying "I no longer want this congressional seat and I'd be very appreciative if you gave it to someone else."

Lastly, Matt's right on about the SUV/light truck distinction -- the creep of trucks and SUV's into everyday vehicles has wreaked havoc on the rules. But a serious reworking of CAFE standards could easily address that. And while reworking CAFE won't be easy, right now it's got the popular will behind it and, in any case, is infinitely simpler than convincing Americans that the right response to skyrocketing gas prices is a government tax which'll jack up what they pay at the pump.

Gas Tax vs. Cafe Standards

There's been a lot of CAFE bashing lately, and much of it, I fear, is a bit misguided.  Brad Plumer (who I don't mean to single out, he's just the most recent) joins in with a post blasting CAFE in favor of a gas tax, maybe with some means-tested rebates to ease up on the regressivity of it.  A few things:

• First, gas taxes are a very direct way of influencing fuel consumption, but it's not clear that, at attainable rates, they actually do influence fuel consumption.  Raising the tax by the small, incremental amounts that could (and by could, I mean in a hypothetical world where this was somehow a viable policy option) pass would likely do little to stem consumption.  That's because, as it turns out, gas hasn't even been near the top price folks are willing to pay.  Most simply bear the burden, preferring to pay more rather than disrupt their lifestyle.  The place gas taxes make a difference is, in the end, among the poor, but if we put in rebates like Brad is suggesting, it won't affect them all.  I'd like to have a gas tax because I'm all for the added revenue, but it's not going to do much against consumption.  If you can afford an Expedition, you can nearly always afford more at the pump.

• Gas taxes, unlike CAFE increases, are basically impossible to pass.  Particularly now.  It's one thing to sneak in a gas tax when fuel is cheap, but convincing Americans of it when they're demanding a drop in gas prices is not, I think, a sound recipe for political survival.  It just won't happen.

• On the other hand, 93% of Americans support an increase in CAFE standards.  That doesn't make it easy -- the auto industry is a powerful lobby.  But they're going to fight a gas tax too, so I'd rather our politicians be battling back with an overwhelmingly popular proposal rather than running into industry opposition while carrying a bill Americans will stone them for passing.

• The beauty of CAFE increases is that they're an action-neutral fix.  Gas taxes requires a high enough price that Americans start driving less in order to conserve.  So you need to jack up the price till filling up becomes so economically painful it actually changes the behavior of Americans.  Demand an increase in CAFE standards and, no matter what happens, the country will use less gas.  It's highly unlikely that everyone will decide their newer, more efficient car requires them to take a road trip.And it's not as if this is a serious hardship on the auto industry -- the technology is there, they've just been pushing it into more powerful cares rather than more efficient ones.  We can change that, and it's be good for the country if we did.

• Brad uses an analogy to make his point: the Smiths have a little, efficient wiener car they drive everywhere and the Browns have a wasteful SUV but they conserve fuel and bike to work.  Brad argues that we want to penalize the Smiths, not the Browns.  Why?  Why should we penalize anyone?  If we force a serious increase in CAFE standards, neither the Smiths nor the Browns feel the hurt, but both end up using less gas.  And if, later, peak oil comes quick enough that we need a gas tax, we can implement one.  But for now, why not achieve the goal -- lower total oil consumption -- through a non-punitive, broadly popular measure?  Why isn't this a no-brainer?

Oil Baby

Fareed Zakaria has a spot-on editorial today on how much tougher oil makes our foreign policy. It's almost laughable how many sore spots and tricky situations our hydrocarbon dependence has landed us in. In the American drama, oil is the screenwriter and we're the hapless dunce who keeps stumbling into his prewritten traps.

It kinda sucks.

But it's not hard to rationalize that oil dependence was a necessary tradeoff for our modern influence and technological achievement. That's perfectly fair. What's so strange is that now, while we're on the cusp of new technologies that could end our addiction, while we control literally thousands of advances and options that could drastically reduce our dependence, we prefer instead to wait till crisis hits, till prices jump so high that oil becomes a curse and change becomes a necessity. We're demanding that the day come when our switchover will be instant rather than gradual, and that's going to hurt.

Some hyperrationalists on both sides of the aisle like to refer to market mechanisms now. When oil ceases to make economic sense, we'll cease to use it. The market will take care of us, tuck us in at night, read us stories, and make us breakfast the next morning. But the market fails. The many costs of oil, from global warming to geopolitical instability, aren't included in the pricetag of crude. And when they do come clear, they still won't get you at the pump. They'll nail us in emergency appropriations for wars and massive outlays to deal with rapid climatological change. We'll have long seen it coming, but the market won't have noticed until it hits. Zakaria's piece today is a good explication of one of those market-hidden prices, oil's irritating ability to prop up most everyone we want knocked down. Read it.

By the way, The Oil Drum, your goto blog for all things crude and peak, has moved. You can, and should, find them here.

Slick Oil

Jamie Court has a good point here:

What's remarkable is that neither leading Democrats nor Republicans are discussing the oil company profiteering behind the jump at the pump? Maybe that's because both parties are feeding at the same well of campaign contributions and the federal energy bill that gushed from it failed to deal with the cause of the sky high prices.

July financial statements show oil companies making new world record profits on top of last year’s banner world record profits. Exxon Mobil’s second quarter earnings jumped 35 percent over last year, Royal Dutch Shell rose 34%, ConocoPhillips shots up 51%.

Poll after poll has shown that Americans are desperately worried over our oil situation. John Kerry's single best-received line was his acceptance speech swipe against the House of Saud -- the numbers spiked up. Maybe that's why, in fear of attracting supporters, he stopped using it. But there's no reason the Democratic Party shouldn't be hitting hard on this subject, particularly as we struggle to come up with a strong national security message that's more than Republican "me-tooism".

Bush and his party are in the pocket of Big Oil. Hell, before they became the government, they were Big Oil. If Democrats were willing to loudly stake out the energy independence territory and use it as a national security message (less reliance on gulf states), it'd be a step in the right direction. That they're so reticent to do so is even more galling, though, when you see how easy Republicans are making it:

The Bush administration is expected to abandon a proposal to extend fuel economy regulations to include Hummer H2's and other huge sport utility vehicles, auto industry and other officials say.
...
Larger sport utility vehicles and pickup trucks weighing more than 8,500 pounds when loaded, like many Hummers and Ford Excursions, have been exempt from the [CAFE] regulations. When the system was created, vehicles of that weight were generally used for commercial purposes, but now hundreds of thousands sold each year are intended for family use.

Automakers have had powerful incentives to produce such vehicles because they are exempt from fuel regulations, have had rich profit margins, and many consumers can claim tax breaks for them. The administration had suggested including larger S.U.V.'s in fuel economy regulations in a first wave of proposals in December 2003, but domestic automakers objected that such a move would harm their fragile bottom lines.

Yes, poor domestic automakers, spent the last few decades making bigger and bigger cars and are now too dependent on their most monstrous models to have them classified in the categories where everyone knows they fit. But I'm glad to know the Bushies haven't lost all their compassion and goodwill. They may not care about workers, the poor, the uninsured, or the disadvantaged young, but Leaving No Corporation Behind is, if anything, even dearer to their hearts now than it was when they were elected.

Let Us All Give Thanks

Bush's energy bill is headed for passage, and thankfully so.  Save for substantive modernization of our electricity grid, an increase in CAFE standards, an actual stance on global warming, a coherent framework for reducing our oil consumption, a serious investment in natural gas, an actual interest in new technologies for alternative sources, and really anything that'd have any sort of worthwhile impact on our energy situation at all, this bill has just what we need.  Subsidies.  Giveaways.  Handouts.  Protection.  Guidelines.  Bureaucracy.  All sprinkled with liberal amounts of Corporate Love and put on the Senate's desk.

I've long thought the Energy Bill, more so than any other legislation, is the perfect metaphor for the modern GOP, both in substance and process.  The substance of it is a mash of giveaways to Big Business, pork, and policy that makes no sense.  And the process?  Well you'd think they were a bunch of liberal crusaders:

From the start, Bush and GOP lawmakers have sold their energy policies as a means of reducing U.S. dependence on foreign oil. "Our dependence on foreign oil is like a foreign tax on the American dream, and that tax is growing every year," Bush said in May. During the Senate debate on the energy bill last month, Majority Leader Bill Frist (R-Tenn.) said: "We must take steps to reduce our dependence on foreign countries and thereby enhance our energy security at home. When we rely on other nations for more than half our oil supply, we simply put our security at risk."   

Like the Medicare bill, this is a mess corporate cronyism sold using the language of serious progressive reform.  Listening to them, you'd think Jimmy Carter was passing his dream energy legislation.  That the reality has no increase in CAFE standards and was held up for a year while Tom DeLay tried to retroactively protect MTBE manufacturers from lawsuits is too perfect.  This isn't conservatism.  And it's only sold as progressivism.  In reality, it's modern Republicanism distilled, a perfectly pure mixture of incoherence and corruption publicly aimed at solving a serious problem but privately written to ignore the issue in favor of industry demands.