The EPA has announced a proposed rule that will for the first time ever target existing power plants - responsible for roughly a third of America's greenhouse gas emissions - to cut their emissions by 30% from 2005 levels by 2030. This is a massive effort on the part of the Obama administration, and follows on the heels of the President's weekend address on the same subject to Americans.
The plan will give states flexibility on exactly how they want to reduce emissions from power plants: whether through increased efficiency on the producer and/or user end, by switching all or parts of power plants to cleaner burning natural gas, using renewable and nuclear power (uh oh - I can already hear the screeching from the Professional Left), or... wait for it, wait for it, voluntary cap and trade programs!
States can choose any combination of the options, of course, and if they choose a cap-and-trade system for themselves and in agreement with other states, plants in those states will be able to buy and sell credits. Cleaner plants, under their emission limits, would be able to sell their excess credits to dirtier plants that go over their emission limits.
The concept is simple, and it is the most market-oriented of all the approaches to dealing with (as opposed to denying) global climate change. It forces dirty energy corporations to internalize the costs they would otherwise be dumping on the public and taxpayers. By the same token, it will allow good energy companies to catch a break for their contribution to reducing emissions.
What costs are those? How about these for starters - the EPA estimates that instituting this plan could have a net benefit to taxpayers and individuals of nearly $100 billion. It would result in:
- 150,000 fewer asthma attacks
- 3,700 less cases of bronchitis in children
- 180,000 fewer days of school missed
- 310,000 fewer lost work days
- 6,600 less premature deaths
- 3,300 fewer heart attacks
- 1,700 avoided hospital emergency room visits
Absent a way for energy companies (as well as other polluters) to internalize those costs, all of these medical costs end up being an unwritten tax on your bank accounts and mine. Whether it is because we have to pay for this as taxpayers, as businesses through worker productivity or through our insurance policies which have to factor in the costs of these unnecessary costs, at the end of the day, polluters who don't internalize the costs of their pollution are simply passing them onto us in one form or another.
Add the economic benefit of new jobs created in manufacturing and new energy technologies as states take up the initiative to transform to a new energy economy, and the literal dollar cost of climate change inaction is in the order of magnitudes higher than the cost of action. And that's to say nothing of the benefit of a more habitable planet for our posterity.
Cap and trade is the most market-oriented approach to build a new energy economy because it lets the market decide the technologies and distribution of forms of producing energy. The government merely sets a goal of reduction and then steps back, allowing the market to shape itself to reach the goal. Governments wouldn't be picking winners and losers, the market would. And because it is the most market-based approach, it is also the easiest for states to adopt quickly.
Another ingenious nature of this approach is it pits players within the energy sector against each other, rather than being able to present a united polluters front. The nuclear energy industry too will want a piece of the pie from coal and oil plants, not just solar, hydro and wind power producers.
So what do you think is the Republican response to a state-based, market-oriented approach to dramatically address climate change and reap health benefits while giving the economy a jolt? Of course, they are flipping out. Speaker John Boehner called the plan 'nuts', and Mitch McConnell, the leader of the elephant herd in the Senate stepped in it by comparing this effort with Obamacare, because we all know what a disaster that turned out to be - what with insuring more people than expected at a cost lower than expected. What a failure.
But that's the rub. McConnell is no more or less obsessed with taking away health care from over 15 million people who have it now because of Obamacare than any other Congressional GOP leader, and just like them, he knows this plan could be just as much a success in fighting climate change. And in the process, it will rub the GOP's nose in it - by instituting the same system on a voluntary basis that Republicans have been telling us no one wants.
No wonder the GOP is apoplectic. This is a brilliant move on the part of the President and his team. Not only is it a historic effort to battle climate change and a new frontier in the fight for a better energy future, it is also politically as cunning and brilliant as Obamacare itself.