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 resident
Bush eschewed domestic-program specifics in favor of a "thematic"
first State of the Union address. This ensured that his message
would be unimpeded by nattering over efforts unrelated to the war
on terror. Media relapse into, for instance, the "Republicans
assault environment" template would have been guaranteed had
Bush given a standard, detailed laundry list. The times called for
a different approach.
Having made
his case for an economic stimulus and for taking the fight to "Bush
Doctrine" violators, however, the president is now chambering
a series of the kind of detailed domestic-agenda items that formerly
were crammed into applause lines.
A major environmental
proposal is imminent, as policymakers desperately cobble together
items designed to win positive green press, in order to balance
the hysteria expected to surround the necessary reforms.
The administration
has convinced itself it can win green kudos by larding up a broad
"climate change" action program as an alternative to the
Kyoto Protocol. This would include mandatory reporting of carbon-dioxide
emissions, even though this naturally occurring gas is not a pollutant.
The plan will enact a government scheme for "voluntary"
reduction and trading (purchase) of "credits" of CO2 emissions,
ostensibly in order to reduce the volume of emissions reported under
mandatory requirements — that is, to look green. CO2 trading
under a cap (as called for by the Kyoto Protocol) amounts to an
inefficient energy tax, according to the Congressional Budget Office.
Presumably, companies will voluntarily transfer wealth for symbolic
paper.
The apparent
CO2-emissions trading scheme tracks the recently enacted British
program for voluntary industry commitments. Germany also has a voluntary
Kyoto program, but so far without trading. And in a development
privately trumpeted by White House aides, Japan affirmed that it
cannot meet its Kyoto requirements and so will pursue a voluntary
Kyoto program. The Bush administration believes it will get media
and green praise for "doing something" — ostensibly
because it's what certain Euros are doing; they, after all, know
all about guilt-induced anti-growth measures.
But the administration
misses a critical nuance. The Brits, et al., merely get a temporary
pass for creating a "voluntary" system based on the regulatory
model (that is, by promising to also ratify and implement Kyoto
as the greens demand). Indeed, the European Union insists that all
member-state programs become mandatory controls by 2005, and that
all Euro-nations avow ratification sometime this year. Japan's diet
is to take up ratification soon. Not that our moralizing allies
require any assistance posing as models of climate virtue, but there's
no need for the administration to aid and abet them.
Leaving aside
that a voluntary program is nothing but a preliminary to mandatory
controls, why else is it so foolish? To begin with, ridicule is
due any program expecting Party A to voluntarily transfer wealth
to Party B for "property" lacking apparent value. This
program will merely inflame everyone. The greens will savage it
as "doing nothing" (and "leaving it to Big Energy"),
even while the scheme continues to legitimize the theory that CO2
emission reductions must be forced.
And why the
government regime to "create" a voluntary program —
a particularly silly prospect given that a voluntary system demonstrably
exists? Led by, ahem, Enron, such transactions have occurred for
several years — driven, like any future sales, almost entirely
by speculation over a mandatory system. Then these credits, which
typically sell for about $1 per ton, would be worth (according to
most estimates) anywhere from $100 to $150 dollars. That's a tremendous
return on investment, and the reason companies with underperforming
stock and aspirations of trading (read: selling) — such as
Enron, DuPont, and Cinergy — so vigorously urge "action."
This only reaffirms
the obvious fact that any "voluntary system" will soon
become a mandate. The more companies speculatively accumulate credits
which, under a cap, would be worth a relative fortune, the more
pressure the well-heeled lobbying community will bring for a cap.
The leap is hardly great. This lobby will decry having "done
the right thing," only to still have no worth attached to the
fruit of their do-goodery.
The Bush administration
should be wise enough to avoid this trap.
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