Climate Policy High Road and Low Road

By Kennedy Maize

Oh! ye’ll take the high road and
I’ll take the low road,
And I’ll be in Scotland afore ye–

Old Scottish folk ballad

When it comes to climate legislation, the Obama administration has chosen the low road – administrative action by the Environmental Protection Agency. At the same time, the administration is also backing the high road – legislative action by the U.S. Congress.

My suspicion is that neither will get to Scotland. That’s a good thing.

I define the EPA’s proposed rule under the Clean Air Act as the “low road” because it is an attempt to skirt the processes that the country usually uses when confronting game-changing issues, such as global warming. Those are decisions traditionally made by the direct representatives of the people, the Congress. The approach of the administration – which appears to assume that legislation in Congress will  fail — while approved by the Supreme Court, is still a stealth path to significant policy. It’s undemocratic by definition.

The administration proposes to regulate carbon dioxide using provisions in the air law, most recently amended in 1990, that provide vague authorities, twisted to accommodate the administration’s policy preferences, regardless of the views of the representatives of the people. The action presumes that Democratic and environmental activists know better than the American people about whether greenhouse gases are a problem.

The EPA route will involve a notice of proposed rulemaking, an extended comment period, and a promulgation of a final rule. Each step along the way will provide opportunities for parties on all sides of a very complex issue to sue the agency, clamoring for tests in the federal courts. It will be a policy dog’s dinner.

The federal circuits likely will come up with differing opinions on the validity of the EPA’s proposed rules, leading to multiple decisions in the appeals circuits. That suggests an ultimate Supreme Court review. The crux of the EPA approach, given the constraints of the air law, is traditional command-and-control, focusing on rules for every major stationary CO2 emitter. Experience has shown that this approach, while it reduces pollution, is inefficient and costly, and may produce less environmental bang for the taxpayer buck

While many environmental groups favor that familiar approach, it’s not going to work. CO2 is not a criteria pollutant, and establishing arcane regulatory approaches such as “best available control technology,” “prevention of significant deterioration,” and “new source performance standards” just won’t get to the goals of the regulators. CO2 is a different air pollution duck, where the usual command-and-control conventions won’t work.

The regulatory approach will produce outcomes that none of the parties to the dispute will view as legitimate. There will be disputes over whether command-and-control and technology rules are producing adequate reductions. Nor will regulators be able to determine with any certainty whether “pollution” generators are meeting their regulatory goals, as measurement will be arbitrary and opaque.

Nor do I see any way to expedite the legal process in the courts. It may be a decade or so before the validity of the EPA’s proposed plan gets a judicial thumbs up or thumbs down, or, most likely, a thumbs horizontal, with multiple remands to lower courts. Can you spell “gridlock”?

The administration is proposing the regulatory approach because it fears the results of the high road: congressional action in the name of representative government. It is plain to me that Congress will not approve anything like the House-passed Waxman-Markey everything-including-the-environmental-kitchen sink legislation. Nor will the just released draft crafted by Democratic Senators Barbara Boxer of California, chairman of the Senate Environment and Public Works Committee, and John Kerry of Massachusetts, chairman of the Senate Foreign Relations Committee, take wing and fly through the Senate.

Ironically, as the Washington Post noted in an editorial, the Boxer-Kerry bill provides only for a CO2 emssions cap, but not, as in the House bill, a cap-and-trade regime. That suggests a major fight in the Senate, if not in committee, then on the floor, perhaps then in a House-Senate conference committee.

The Senate Democratic leadership is simply scared silly of cap’n’trade. So it punts, with the Senate Finance Committee on the receiving end. Acknowledging that the Boxer-Kerry bill doesn’t address the “trade” component of cap’n’trade, Kerry said that the  hot, green cap’n’trade potato is going to be in the hands of the Senate Finance Committee, chaired by Montana Democrat Max Baucus.

As with health care legislation, I suspect Baucus will end up with the legislative whip hand, as the climate legislation could potentially derail the administration’s plans for vastly expanding federal powers while, at the same time, reducing the deficit. But the committee could easily fumble the punt, to continue the football metaphor.

The political problem that faces the Senate, and the Finance Committee, is the prominence of coal-state legislators. Just as West Virginia Democrat Jay Rockefeller was the administration’s nemesis on the “public option” in health care reform, so he is likely to be when it comes to climate legislation. He’s the senior Democrat on the committee after Baucus.

Let’s tick off a few of the coal states that have a dirty dog in the fight: Pennsylvania, Maryland, West Virginia, Tennessee, Kentucky, Alabama, Ohio, Indiana, Illinois, Missouri, Colorado, Wyoming, Montana, Utah, North Dakota, New Mexico, Arizona, Texas, Washington, Alaska. I may have missed a few, but the point is that coal is a mighty force in the Senate, not just a pasteboard villain.

The Obama administration faced a partisan split on health care. It faces a bipartisan, and regional, split on climate legislation. Coal states and coal-consuming states appear to me to be at the controls of the administration’s climate juggernaut in Congress. It is politically powered by coal.

What does that mean? My take is that nothing approaching U.S. climate legislative consensus will be available by December and the latest climate policy festival in Copenhagen. The U.S. will try the kind of policy shuck-and-jive that Al Gore performed at Kyoto in 1997, with ridiculous results. Let’s hope the administration’s soft-shoe is less persuasive in Denmark than it was in Japan, where the result was a U.S.-brokered deal that the U.S. Congress eschewed, and that is universally viewed as a policy failure.

In fairness, let’s acknowledge that the “high road” faces the same post-legislative obstacles as the EPA low-road. The EPA will have to promulgate proposed rules under any legislation that Congress passes. Those rules will go through the same legal meat-grinder as the administration’s approach. We’re probably looking at another decade of policy stalemate either way. Nevermind.

I don’t think the U.S. will ever embrace the kind of hard, pedal to the brake, climate policy greens have been advocating for more than a decade. The evidence doesn’t support such an approach, as the climate appears to be reluctant to follow the guidelines laid out by the half-cocked wizards of climate modeling. The politics suggest that hard regulation, rather than adaptation, would be poisonous policy, both confiscatory and incompetent.

Perhaps the best advice comes from the late Ronald Reagan, when, as U.S. president, he famously said (although he may have been borrowing from someone else, as he was wont to do), “Don’t just do something, stand there.”