We need an economy-wide greenhouse gas bill that puts a price on GHG emissions and allows reallocation of capital in response. Congress increasingly appears unable to produce such a bill.

First came the fiasco of Lieberman-Warner, wherein it became quite apparent that the route to Congressional approval was paved with district-directed pork, stealing money out of CO2-reduction efforts and distributing it to any number of pet projects. Thankfully, that failed.

Then last week, Speaker Pelosi suggested that the great thing about cap-and-trade is that it gives Congress money to dole out to favored interests:

I believe we have to [implement cap and trade] because we see that as a source of revenue …

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Again, the idea that the purpose of a GHG bill is to reduce CO2 emissions is completely subsumed by salivation over the potential grab bag.

Now comes this, from E&E Daily ($ub. req’d), noting that given the choice between a California waiver and cap-and-trade, legislators from the rust belt prefer cap-and-trade. Why? Because it might give them a chance to throw some money back at their districts:

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Sen. Debbie Stabenow (D-Mich.), for example, pointed to the large new revenue stream often linked to a cap-and-trade system, saying that the money would help domestic automakers retool their plants to meet a tighter suite of emission standards.

“I think that ultimately this gets addressed in the energy bill to slash cap and trade,” Stabenow said. “It’s not enough just to talk about the regulations. If we want to have a domestic auto industry, we have to be provided support, particularly in the middle of this global credit crisis where we have to invest massive amounts of money and aren’t able to get credit.”

Is the purpose of a cap-and-trade bill really to provide bailout dollars to the auto industry?

If a bit of imperfection were simply the price of good policy, this wouldn’t be worth making a stink over. But bad climate legislation has a way of sticking around for a long-time — longer than we have. The Clean Air Act is 30+ years old and still mandates higher CO2 emissions. RGGI still provides no direct incentive for a host of CO2 reduction technologies (nor direct penalties for a host of CO2 sources). Kyoto is still suffering from mis-pricing due to grandfathering rules. If we pass a similarly flawed bill, we will implicitly be making a gamble that we can afford to put off meaningful action to reduce atmospheric CO2 concentrations.

I for one would like to see Congress take this issue a bit more seriously. If Congress truly appreciates the urgency of GHG reduction, they need to pass a strong, economy-wide bill immediately. All signs to date suggest that they are far more interested in figuring out how to tap a new revenue source. We must demand better — and I am increasingly of the opinion that the only way to get better is to bypass Congress entirely.