Energy policy
A pale shade of green
Jul 12th 2007
>From The Economist print edition
When it comes to climate change, the Democrats are proving almost as bad
as George Bush
SOON after the Democrats took control of Congress last year, its new
leaders promised to overhaul America’s energy policy. They vowed to
tackle climate change head-on, despite the president’s reluctance. No
longer, they said, would they meekly accept America’s reliance on
foreign despots for imports of oil. And something would be done to lower
the price of petrol (gasoline), they assured agitated drivers. Nancy
Pelosi, the new speaker of the House of Representatives, set up a
special committee to come up with a solution to the nation’s energy woes
by July 4th, so that America’s new political masters could declare
“energy independence” on the same day their forebears renounced the
colonial yoke.
But July 4th has come and gone, Ms Pelosi as yet has no energy bill and
America is still just as firmly yoked to expensive, dirty, imported
energy as ever. The price of oil is near the nominal record reached last
year, and petrol costs well over $3 a gallon. Not only have the
Democrats shelved any plan for limiting greenhouse emissions; they have
also embraced two of Mr Bush’s more pernicious ideas: using greenery as
an excuse to dole out subsidies to ungreen lobbies; and claiming a bogus
link between climate change and energy independence.
Give the Senate Democrats credit for one thing: they have passed an
energy bill that would require American cars to guzzle a bit less
petrol. That is no small achievement. It is the first time either
chamber has resolved to raise fuel-economy standards for a third of a
century. Sadly, however, the Senate’s energy bill weds sensible steps on
fuel economy and energy efficiency with all manner of less helpful,
populist measures, including new anti-price-gouging rules aimed at big
oil companies and hand-outs for farmers in the form of new incentives
for expensive (and ungreen) corn-based ethanol. It also empowers the
government to sue members of the Organisation of the Petroleum Exporting
Countries for forming a cartel—a step that is not likely to increase
America’s access to oil.
The House has yet to pass a bill, but it will probably include most of
this tosh, as well as subsidies for the pet technologies of various
congressmen, perhaps including a particularly grubby fuel derived from
coal. Even if the House and the Senate can patch a bill together from
this mish-mash, the president may yet veto it. And rightly so: in its
lack of ambition and its embrace of boondoggles, the prospective bill
resembles the generally derided Energy Act which the oil-fired
Republicans pushed through in 2005.
The Democrats hold at least two suspect truths to be self-evident. Most
obviously, they think that politicians should micro-manage energy
policy, encouraging some technologies and neglecting others. That
ignores most of the lessons of economics, but it is decidedly well
grounded compared with the Democrats’ other verity: that slowing global
warming and reducing dependence on imported fuels go hand-in-hand. What
sense does it make to give preference to American ethanol over the
cheaper and more climate-friendly Brazilian sort? (Indeed, if you
embrace the goal of “energy security”, bigger imports of Brazilian
ethanol might help, by reducing America’s demand for oil from more
hostile lands.)
The Democrats’ leaders might calculate that it is worth dressing up an
energy bill with patriotic talk and weighing it down with subsidies in
order to buy political support for more contentious measures. If so,
they are wasting their bargaining chips. The boldest element of the
current bill, the toughening of fuel-economy standards, enjoys strong
support from the public, the president and leaders of both parties. Its
only determined opponents are American carmakers, and even they are
haggling not over the principle of more efficient vehicles, but over the
scope and ambition of the new standards.
Dick Cheney is rather proud of you
What about a bill limiting emissions of greenhouse gases? The Democrats
do not even plan to broach the subject until later in the year, after
their first energy bill has got through. That might be tantamount to
giving up. It will be hard to build momentum for a second law on much
the same subject. The most exercised lobbyists and legislators will have
run out of energy, so to speak. And to some cynical observers, that
would seem to suit the party’s upper ranks just fine: they would be
happy to keep global warming in reserve as an emotive issue with which
to rally supporters at the next election. The fact that so many
allegedly green groups are keeping mum about this merely shows that the
verdant left thinks getting Democrats elected is more important than the
environment.
That is a pity. It makes little sense to start work on the nitty-gritty
of cleaning up cars or power plants without setting an overall target
for emissions cuts. Furthermore, if Congress were to enact some sort of
overarching incentive for reduced emissions, such as a cap-and-trade
system or, better yet, a carbon tax, many of the measures it is now
contemplating would need no further prompting or payouts from
politicians.
Global warming is the problem, after all, and fuel economy just one part
of the solution. A single shot does not constitute a revolution,
especially if you then run away.