September 1, 2010

Cap and Trade Is Dead

Dr. Robert Peltier, PE

Gain Must Exceed Pain

In my opinion, Reid pulled the plug on the APA before a Senate vote to avoid certain humiliation just months before his own reelection bid. Insiders put the expected vote tally at between 35 and 40 votes in support, even with the strong support of large utilities, the Edison Electric Institute, and many, but not all, environmental organizations. It’s a mystery how another “comprehensive” legislative proposal could possibly garner another 20 or so votes if it includes cap and trade, in spite of the president’s optimistic promises. It’s clear that major disagreements within the majority party on carbon cap and trade remain strong and beyond Reid’s ability to exert control. The bottom line is the political pain for senators representing cap-affected constituencies overwhelms the possible political gain by going along to get along with the Democratic leadership. The differences are primarily regional, not party ones.

The president also faces much fencemending with his constituents before he can push cap and trade again. I’ve read reports that supportive environmental groups fully mobilized their forces and invested upwards of $100 million since Obama’s election on media blitzes supporting climate change legislation. Obama must now mend fences after throwing House Democrats that supported ACES under the bus. In addition, his environmental supporters may think twice before again investing so much sweat and money until the president’s actions match his rhetoric.

Regional Differences Rule

This lack of support for carbon cap and trade in the Senate goes beyond the simple arithmetic of counting votes to the power and prestige of individual senators. For example, key congressional Democrats such as Ben Nelson (Neb.), Mary Landrieu (La.), Evan Bayh (Ind.), Jay Rockefeller (W.V.), and the late Robert Byrd (W.V.) consistently opposed carbon cap-and-trade legislation at every turn. Others, such as Jim Webb (Va.), Mark Warner (Va.), Claire McCaskill (Mo.), and Jeff Bingaman (N.M.) would like to support cap and trade but have the intellectual honesty to temper their enthusiasm with true concern about its economic impact on their constituents.

Would cap and trade pass were the president to put his full political weight in support of it? I doubt it. Without the unfailing support of these Democratic stalwarts by addressing their unique regional concerns, carbon cap-and-trade legislation will remain out of reach for this, or any future, president.