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EDITORIAL
Our view: Not going with cap-and-trade has down sides
Tuesday, May 27, 2008
The historic turn the world is making on global warming — in the wake of Al Gore's efforts, among others — is reflected in the presidential campaign. All three remaining candidates agree on the need for what's called a "cap-and-trade" approach to emissions of carbon dioxide and other gases.
Sen. John McCain parts from President George W. Bush and the conservative forces in the Republican Party and keeps some hold on his old reputation for independence, despite his other dramatic moves to placate those forces.
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Ohio Sen. George Voinovich, not generally thought of as a hard-core conservative, is with those other forces on this one. Unlike some of them, he does accept that man-made global warming is a problem. But he worries that the proposed solution could be worse, especially for Ohio and some other states.
Here's what cap-and-trade is:
Companies that now pollute in certain ways would get government limits on how much they could pollute, with the limits dropping over time. If they could not reach those limits — or choose not to — they could conduct a trade with other companies that are meeting their limits. They could buy from those companies the right to pollute more.
In other words, the government is capping pollution, but, to some degree, letting the marketplace figure out how to do it and who should change.
Sen. Voinovich believes cap-and-trade would be harmful to manufacturing companies and coal-dependent utilities in Ohio, a state which has a lot of both. He says energy costs would go up, driving money out of the state and ultimately hurting regular people, not just corporations. Meanwhile, China and India would continue to pollute more and more.
From his position on the Senate environmental committee (on which he could be the top Republican next year, if Sen. McCain is elected president), he proposes, instead, creating incentives to spur development of nuclear power plants and the development of clean-coal technologies.
He would allow for cap-and-trade to be adopted in 2030 if his plan does not achieve enough environmental progress first.
In opposing caps now, he cites studies about how much harm they would bring to the economy. But such studies don't take into account the harm of doing nothing, in the form of possible hurricanes and other natural disasters and changes in climate that upset economies in other ways. A former chief economist for the World Bank warns of climate change reducing worldwide economy growth. He calls climate change "the greatest market failure the world has ever seen."
Other supporters of cap-and-trade say that its economic impact cannot be clearly predicted. One reason is that the need not to pollute will spur companies to technological advances that can't be predicted.
Cap-and-trade has two factors going for it that one needn't be an expert to understand. One, it is a new, inventive approach, as opposed to government incentives.
The latter have been around for decades in the field of energy. They still have some use. But they have not turned out to be the magic some hoped for.
Second, the bipartisan appeal of cap-and-trade is itself a case for adopting the idea. A way to actually get something done might be at hand.
Cap-and-trade must be approached cautiously, with an eye on the possibility of it hurting some states more than others. Ohio does need to have a major player looking after its interests.
But cap-and-trade is a level-headed, yet aggressive approach that also seems politically realistic. Such ideas do not come along often and should not be rejected rashly.
