Cutting Through Ice

One of the reasons I think that so many people in America believe that the country is on the wrong track is because it's so supremely difficult to get anything major accomplished anymore. Our political institutions are not what they used to be in terms of stature or even power, and the willful divisiveness strategy of the conservative movement (and the progressive movement in response) makes any consensus a struggle. It is far easier to take a nation to war than to actually fix a persistent problem, and that's dangerous.

I am encouraged that CEOs are getting on board with solving global warming and health care, for example. They have a self-interest in doing so, and as the corridors of power have shifted from Washington to the boardroom, any program aimed at tackling these problems needs to have corporate America as part of the solution. However, let's not deny that a primary factor in businesses involving themselves in these issues is to steer them in a course that is favorable to industry. And, there isn't just one "business" consensus; different industries have different ideas about how to solve problems, and they all have a financial imperative. For example, look at the hardcore lobbying to turn coal into a clean fuel:

Even as Congressional leaders draft legislation to reduce greenhouse gases linked to global warming, a powerful roster of Democrats and Republicans is pushing to subsidize coal as the king of alternative fuels.

Prodded by intense lobbying from the coal industry, lawmakers from coal states are proposing that taxpayers guarantee billions of dollars in construction loans for coal-to-liquid production plants, guarantee minimum prices for the new fuel, and guarantee big government purchases for the next 25 years.

With both House and Senate Democrats hoping to pass “energy independence” bills by mid-July, coal supporters argue that coal-based fuels are more American than gasoline and potentially greener than ethanol.

One of the lobbyists pushing Congress to approve "green coal" subsidies is Dick Gephardt, the former House Minority Leader. And since so many states have an abundance of coal in them, those legislators see it as a possible answer. And yet, it's a terrible idea. Even with proper carbon sequestration, it doesn't move the needle at all on global warming.



One of the leading advocates for clean coal, by the way, is Barack Obama.

It's darn near impossible to get the United States to agree to any significant caps on greenhouse gas emissions as it is. And while it's great that American carbon emissions fell 1.3% last year (could that be due to the continued loss of manufacturing jobs?), it's not good enough. So when "clean coal" is now thrust forward as the savior of the environment, it makes me wonder if we're politically equipped to pull off any dramatic change. That change, clearly, begins and ends with taxing carbon emissions before it's too late and too costly.

The proposed fixes for climate change are as numerous as its causes. Most only tinker at the edges of the problem, such as a California bill to phase out energy-inefficient lightbulbs. To produce the cuts in greenhouse gases needed to slow or stop global warming, the world will have to phase out the fossil fuels on which it relies for most of its power supply and transportation — especially the coal-burning power plants that account for about 32% of the annual emissions of carbon dioxide in the U.S. and that generate about half of our electricity. There are three basic methods of doing that, which are the subject of debate and legislation at every level of government [...]

A carbon tax simply imposes a tax for polluting based on the amount emitted, thus encouraging polluters to clean up and entrepreneurs to come up with alternatives. The tax is constant and predictable. It doesn't require the creation of a new energy trading market, and it can be collected by existing state and federal agencies. It's straightforward and much harder to manipulate by special interests than the politicized process of allocating carbon credits.

And it could be structured to be far less harmful to power consumers. While all the added costs under cap-and-trade go to companies, utilities and traders, the added costs under a carbon tax would go to the government — which could use the revenues to offset other taxes. So while consumers would pay more for energy, they might pay less income tax, or some other tax. That could greatly cushion the overall economic effect.

This is one of the better op-eds that the LA Times has ever done, I encourage you to read it. But even it acknowledges that taxes are a difficult sell in the current political environment. And excuse me if I question the intent of the corporate CEOs all lining up to be good stewards of the environment. Their economic imperative is to cause the least damage to their bottom line. There are ways around this problem. But with so many competing interests, the road is fraught with peril.