According to the New York Times, the economy will be spared a further assault by cap-and-trade, an emissions (and energy) rationing scheme which would have imposed a declining cap on greenhouse gas emissions, and allowed “trading” in the ration coupons by emitters. Given the declining cap, and the dearth of inexpensive ways to reduce greenhouse gas emissions, cap-and-trade would have certainly raised energy costs over time. Given that energy is an input to production, that would have further harmed an already shambling economy. We have written extensively about the perils of cap-and-trade here.
Over at the radical-environmentalist website Grist, Dave Roberts is wearing sackcloth and ashes (Looks good on you, Dave, here’s hoping you get more opportunities to style them!):
What’s happened is total and complete surrender. There’s no silver lining in this cloud. Not only will the bill not contain any restrictions on greenhouse gases—not even a watered-down utility-only cap—it won’t even contain the two other key policies that would have moved clean energy forward: the Renewable Electricity Standard (RES) and the energy efficiency standards.
And, of course, the blame game has commenced. According to the New York Times, the Republicans are the primary villain, but some hillbilly Democrats get a share:
The Republicans obviously bear a good part of the responsibility for this failure. With a handful of exceptions, they have denied or played down the problem of global warming for years and did pretty much anything they could to protect industry from necessary regulation. There are, however, as many as a dozen Senate Democrats, mainly from the South, Appalachia and the Midwest, who share the blame.
The real question of the day, however, is whether cap-and-trade is really dead, or just playing dead? Various reports suggest that Democrats might be able to force things through in a lame-duck session after they take the expected drubbing in the midterm elections. John Kerry is claiming that cap-and-trade (which he refuses to call by its name) will return with the support of the One:
“Let me be crystal clear, this legislation he has proposed doesn’t replace climate change legislation or comprehensive energy legislation,” [he said,] adding that President Obama called him before a Democratic Caucus meeting on energy Thursday afternoon promising to step up efforts to find support for a broader bill.
Back at Grist, Dave Roberts suggests (ludicrously, IMHO) that “Big Coal will be back begging for cap-and-trade” because Environmental Protection Agency (EPA) regulations are going to make coal power unaffordable. Obviously, it hasn’t occurred to Dave that the coal companies can simply sell their coal to China, which is going to need it, given their massive expansion of coal power generation. Yes, electrical utilities will be hurt by EPA regulations, as will manufacturers and businesses of all sorts, but it’s unlikely to send Big Coal begging for cap-and-trade.
So, until the EPA steps up next year and starts knee-capping U.S. industry with its own planned greenhouse gas regulations, the economy seems to have dodged a bullet.
Still, cap-and-trade is a bit like a vampire: you can’t proclaim that it’s really dead until it’s been staked through the heart, sprinkled with holy water, beheaded, cremated, and had its ashes scattered over running water. If EPA goes draconian enough with their regs, cap-and-trade could be back. That’s the next play to watch for.