Senate Majority Leader Reid has declared cap-and-trade dead (for now). As the Christian Science Monitor notes:
In a bid to win Republican support, Democrats will drop proposed controls on greenhouse gas emissions in favor of more limited measures that have attracted bipartisan support in the past. These include: lifting the liability cap to hold BP accountable for the Gulf oil spill, decreasing dependence on foreign oil, boosting incentives to create up to 400,000 green jobs, and expanding funding for land and water conservation.
If Reid can’t get sufficient support now, one can imagine that it won’t be forthcoming after the mid-term elections (assuming that the GOP doesn’t snatch defeat from the jaws of victory).
As Daniel Foster (National Review) and John Fund (WSJ ) suggest, there might be another strategy at work: pass a scaled down energy bill now (loaded up with enough green pork to attract a majority) and postpone the conference report until after the November elections, at which time there will be an opportunity during the lame duck session to slip cap-and-trade into a conference report.
An interesting question to ponder this weekend: Is cap-and-trade DOA, or will it rise from its grave in the waning days of the Congress?
The answer may be more complicated than one might suppose. There is an assumption here that Democrats would support cap-and-trade as the preferable response to global climate change. In reality, many on the Left have never been all that happy with cap-and-trade when compared to a carbon tax or more statist alternatives. For many, there is an elemental abhorrence to market mechanisms at the core of cap-and-trade and various plans seem to provide far too many concessions to corporations (e.g., in the distribution of credits, the cost containment components, the definitions of what constitute offsets).
As Jesse Jenkins (Huffington Post) suggest, we should be happy to see cap-and trade die for some of these reasons. In his words:
the proposed cap and trade bill was riddled with so many loopholes and cost containment mechanisms–most notably the availability of up to 2 billion dubious carbon offsets–that the effective price on carbon was too low to effectively spur clean energy innovation and adoption and the “cap” on carbon was rendered effectively non-binding.
Far preferable for many is a green industrial policy focusing on clean energy. In Jenkins words: “the most reliably successful driver of new innovation and transformative technology changes has been an active partnership between private-sector entrepreneurs and innovators and a public sector acting as both an initial funder and demanding customer of new, cutting-edge technologies.”
My guess is that some form of cap-and-trade remains the most likely scenario, although less likely than in the early days of the 111th Congress.
Update: A further complication emerges…Obama would likely veto legislation promoted by coal state Dems limiting the EPA’s authority to promulgate climate rules. (For anyone who is familiar with the politics of acid rain as they evolved in the 1970s and 1980s, this has a familiar feel). http://www.politico.com/news/stories/0710/40174.html