Did environmentalists get played on cap and trade?
Although it’s not his regular beat, Kevin Drum blogs sensibly about carbon policy from time to time. Recently, though, in an otherwise agreeable post about the fecklessness of opponents of climate change legislation, Drum offers up a narrative that is both fairly commonplace and also riddled with misconceptions:
It also goes to show how fleeting conservative support for “market-oriented solutions” like cap-and trade is. A lot of the liberal enthusiasm for cap-and-trade over the past decade has been based on the idea that it might be more acceptable to conservatives than a straight tax, but obviously that hasn’t turned out to be the case. Basically, they just don’t want to do anything, full stop.
I get the point of this story. It’s supposed to demonstrate the bad faith of opponents of climate change legislation. “We gave you what you asked for, and this is the thanks we get?” While I’d hardly argue the general point, there are a couple of problems with the narrative.
First, a nitpick: a carbon tax and a cap-and-trade system are both “market-oriented solutions” to climate change. Occasionally carbon taxers like to pretend otherwise, in the hope that “market” has become an even dirtier word than “tax.” But, technically speaking, this bit of revisionism doesn’t wash. A carbon tax puts a price on carbon directly and lets market participants decide whether they’d rather pay the tax or reduce emissions. A cap and trade system puts a limit on the total amount of carbon and lets market participants decide whether they’d rather bid for carbon permits or reduce emissions. If these systems sound similar in principle, it’s because, broadly speaking, they are. They’re both market-oriented (or, alternatively, price-oriented) ways of reducing pollution.
More problematically, this narrative implies that liberals came around to a fundamentally conservative policy approach primarily as a sop to their political opponents. But carbon pricing isn’t a defensive crouch on the part of environmentalists — it’s the substantively correct position. The interest group known as “people who don’t want to roast the planet” came around to market-oriented environmental policies because they’re the best shot we have at curbing carbon emissions. Obviously I’m eliding a considerable diversity of opinion here, but the fact is both liberals and conservatives who support carbon pricing do so on the merits.
Next up, there’s the subtext that environmentalists secretly prefer a carbon tax, but they made a pact sometime in the ’90s to back the horse they thought could win. In reality, a large majority of people from whichever end of the political spectrum couldn’t begin to explain how either a carbon tax or cap-and-trade system works, much less parse the differences between the two. Of the significantly smaller group that is fluent in the details, you can find good-faith partisans of all sorts of different policies.
Finally, it bears mentioning that the central conceit of the narrative — cap and trade is more politically acceptable than a straight carbon tax — happens to be true. I’m pretty sure no one ever said cap and trade would unite all interest groups for a rousing chorus of kumbaya. After all, most of the organized opposition to climate change legislation isn’t ideological in nature. The issue, as ever, boils down to money. Any meaningful restrictions on emissions — carbon tax, cap and trade, command and control, whatever — are going to push costs onto polluters, and are therefore going to encounter considerable resistance. But a carbon tax never had a snowball’s chance of passage, and here we are in 2009, with climate legislation looking more likely by the minute.
None of this is to suggest that opponents of action aren’t feckless or opportunistic or whatever. But it’s hardly the case that environmentalists got played on this issue.
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