Will Cap and Trade Pass Congress?

Will Cap and Trade Pass Congress?

The Volockh Conspiracy, June 23, 2009

The House of Representatives is scheduled to vote on cap-and-trade this week.

The bill seeks to lower US per capita cabon emissions to levels below those of the US colonial period.

As I blogged four months ago:

The goal is an 83% reduction in carbon emissions by 2050 compared to 2005 levels.

That would bring US per capita emissions of CO2 down to a level below what we had in the 1700s. As Steven Hayward wrote in the WSJ last April about an 80% reduction then on the table:

Begin with the current inventory of carbon dioxide emissions – CO2 being the principal greenhouse gas generated almost entirely by energy use. According to the Department of Energy’s most recent data on greenhouse gas emissions, in 2006 the U.S. emitted 5.8 billion metric tons of carbon dioxide, or just under 20 tons per capita. An 80% reduction in these emissions from 1990 levels means that the U.S. cannot emit more than about one billion metric tons of CO2 in 2050.

Were man-made carbon dioxide emissions in this country ever that low? The answer is probably yes – from historical energy data it is possible to estimate that the U.S. last emitted one billion metric tons around 1910. But in 1910, the U.S. had 92 million people, and per capita income, in current dollars, was about $6,000.

By the year 2050, the Census Bureau projects that our population will be around 420 million. This means per capita emissions will have to fall to about 2.5 tons in order to meet the goal of 80% reduction.

It is likely that U.S. per capita emissions were never that low – even back in colonial days when the only fuel we burned was wood. The only nations in the world today that emit at this low level are all poor developing nations, such as Belize, Mauritius, Jordan, Haiti and Somalia. . . .

If Obama succeeds in his quest to reduce carbon emissions by 83% by 2050, American business will be destroyed. Manufacturing in the US will essentially disappear to countries that do not have anti-business, anti-growth policies, mostly in the Far East.

It would be hard to imagine a government policy that is likely to be more destructive of jobs and economic growth than this one.

So what are its chances in Congress? I poked around a bit in order to determine if I needed to sell my US stock market positions.

Normally, the bill would not be brought forward in the House without the votes, but I came across this speculation:

The erratic course that legislation establishing transferable global warming fees has taken shows how hard it is to get a coalition together for a future problem that many people think is overstated.

While her admirers say that the reason the speaker kicked the bill out of committee for a sudden vote by the full House is because she believes she can get the job done, it’s at least as likely that Pelosi knows she can’t.

Leaving the bill in the hands of skeptical and regionally motivated committee chairmen and subject to special interest lobbying, Pelosi was losing control of the bill. Worse than having the Waxman-Markey bill defeated would be having it pass in some form that is really more of a subsidy to carbon emitters than a crackdown. . . .

By bringing the bill out for a vote this week, it will almost certainly fail in the House. If, by some miracle it does get out of the House, the Senate would smite any bill that amounts to a tax or hurts manufacturing states. . . .

Rather than being a sign of new life, Pelosi’s decision to push the cap and trade bill out of committee may be something of an assisted suicide.

While I do not know anything of the bill’s chances in the House, I wouldn’t consider it a “miracle” if it passed. Yet, given the Senate’s refusal to fast-track the bill earlier this year, I suspect that the Senate will not pass any version of cap-and-trade this year.

But that wouldn’t be the end of cap-and-trade. The Obama administration might just implement it under its power to prevent air pollution.

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