Politics & Policy

Acting Locally

Cap and trade in review.

The Senate has completed its third foray into the waters of global warming cap-and-trade legislation in fewer than five years, with the fourth encounter undoubtedly to follow sometime in 2009. “In some ways,” Sen. Bryan Dorgan (D., N.D.) said of the Senate’s early June floor skirmish, “this is a dress rehearsal for next year.”

Indeed, it’s a given the next president will propose an ambitious tax-and-regulatory scheme to slash emissions of carbon dioxide by at least 70 percent. And there’s a good chance that the composition of the next Congress will make it a willing co-conspirator in that endeavor (but, as discussed below, that is by no means certain). Environmental groups, rent-seeking business interests, and their media acolytes will redouble their efforts on behalf of climate-control legislation.

Yes, the climate question will be with us for years to come. All the more reason to review the Senate debate and ask what conservatives should learn from it.

The Senate has considered cap-and-trade legislation in 2003, 2005 and again this year. The first two times senators voted on the actual legislation; the most recent vote was a procedural “cloture” vote to end debate and stop the bill’s opponents from offering substantive, but politically charged amendments. The procedural nature of this most recent vote complicates the analysis a bit, as most procedural votes are thinly veiled tests of a lawmaker’s party loyalty. But through their roll call votes and public statements, we can piece together a pretty good picture of how most senators view the economic trade-offs.

The cloture vote, offered by Senate Majority Leader Harry Reid, which needed to win a supermajority of 60 senators, failed, attracting only 48 votes. But California’s Barbara Boxer, who chairs the Senate Environment and Public Works Committee, nevertheless declared it “a landmark moment in the fight against global warming.” She argued that the bill really won over the hearts and minds of 54 senators because six non-voting senators issued statements in support of the bill, up from the 38 who supported a cap-and-trade bill three years ago. If accurate, this would be a handsome return on the relentless campaign waged by the environmental lobby on behalf of climate-control legislation.

But not so fast. Nine Democrats who backed Reid’s motion (presumably out of a desire to be team players) and one who opposed him sent him a cautionary letter “as Democrats from regions of the country that will be most immediately affected by climate legislation.” They hail from states with significant industrial bases (Ohio and Michigan), coal production (West Virginia, Indiana, and Virginia), coal-burning utilities (Missouri) and agricultural sectors (Arkansas and Nebraska). One curious omission from this list is blue-collar, industrial Pennsylvania, where freshman Sen. Bob Casey voiced strong support for the legislation.

Their bottom line: “We cannot support final passage of the Boxer Substitute [Amendment] in its current form.”

Cap and trade, they wrote, must simultaneously meet two mutually exclusive goals — significantly reduce carbon greenhouse gas emissions and “ensure that consumers and workers in all regions of the U.S. are protected from undue hardship.” Translation: Proceed with your utopian climate-control agenda, but only if you guarantee that my constituents and the businesses in my state will feel no pain.

The alarm bells in Boxer’s global-warming war room must have sounded when they read the list of demands, particularly the following:

‐ The legislation must relieve these “more severely affected” states from the cost of complying with its numerous regulations and de facto taxes.

‐ It must offer “price relief” to “working families” in these states to keep their electric bills low.

‐ It must include “a mechanism to protect U.S. manufacturers from international competitors [i.e., China and India] that do not face the same carbon constraints.” Economists have a name for this mechanism — it’s called a tariff and it almost certainly would be struck down by the World Trade Organization. Should that happen, they caution, “the program needs to be modified or suspended.”

‐ Finally, any cap-and-trade program Congress adopts must be “the single regulatory regime for controlling greenhouse gases” in the nation and preempt more draconian state regulations, such as those routinely adopted in California and New England, that can set the market for the entire country.

Of course, as I explained in an earlier piece, “Carbon-Cap Conundrum,” Boxer’s cap-and-trade amendment foisted literally trillions in subsidies on every industry or constituent group that might feel the wrath of climate controls. If all this largesse, of which these senators were fully aware, failed to sway them, Boxer has her work cut out for her.

Subtract these nine Democrats from Boxer’s list of 54 supporters and we’re down to 45.

Boxer may also have to drop Sen. Mel Martinez (R., Fla.) from her list. Martinez issued a confused statement in which he took credit for voting to cut off debate in order “to move the debate forward” (huh?) but placed himself firmly in the camp of pro-climate-control senators who see nuclear energy as the only solution. He cautioned that “substantial changes — especially in the area of promoting nuclear energy — are necessary for [Lieberman-Warner] to clear the legislative hurdles before it.” Absent a renaissance of nuclear-plant construction, he added, “I do not believe that the Warner-Lieberman bill will achieve even a fraction of the carbon emissions reductions it seeks.”

With that, the Senate’s climate-control caucus shrunk to 44, a gain of exactly one senator since this whole business started five years ago, a rather paltry rate of return on all those billions spent hyping the threat of global warming.

What’s going on here?

It’s simple: Most lawmakers may think globally, but when it comes to the economic trade-offs in any climate-control legislation, they vote locally. Parochial state concerns trump all else.

One way to measure just how much local concerns carried the day is to look at the 22 Senate seats which have turned over since the first vote on climate-control legislation in 2003. Of these, 15 of the new senators vote precisely as their predecessors did. The remaining seven states were a wash: the Lieberman-Warner forces gained votes in four states and lost in three others. The status quo held firm in red states and blue and even in four states where the Senate seat flipped from one party to the other. Overall, 41 Senate delegations voted in tandem, even including eight where the partisan representation is split. When it comes to the local costs of environmental regulation, bipartisanship is alive and well.

It’s one thing to convince lawmakers that global warming is a problem. But as the Democratic leadership is learning, it’s quite another to talk them into paying for expensive solutions.

– Michael G. Franc is vice president of government relations for the Heritage Foundation.

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