The new transformationalism

Posted By David Rothkopf Wednesday, February 25, 2009 - 6:23 PM Share

Not too many weeks ago, a noted environmental advocate was on the phone with Rahm Emanuel. The caller was pressing the not-quite White House chief of staff for bold moves on the green energy, energy security and climate agendas. The conversation turned to whether or not the incoming president would push early in his tenure for a cap and trade system or a carbon tax. Emanuel asked the caller to hold on. The next voice on the phone was Barack Obama. Obama, acknowledging the importance of the issue, then stated that it just wasn't going to be politically possible to move quickly on such efforts to set a price for carbon. He was citing a commonly held view within his team that these moves would be viewed as a tax and just not viable in the midst of a severe recession. Later, he promised, as soon as possible, but not now.

Later has come early to Washington. Obama in his address to the joint session of Congress called for a cap and trade system as an urgent priority and as a center piece of the green energy that is itself a centerpiece of his overall vision for America. The stars are aligning. Henry Waxman in the House has said he wants to see such an initiative legislated by Memorial Day. Harry Reid says by the end of the summer. Cap and trade is going to happen. America is going to starting setting a price for carbon and in so doing will start to set in motion the events that will ultimately make the growth of green energy organic and will make greater corporate attention to energy efficiency a business necessity.

Simultaneously, we have an EPA that has sent a bold and unmistakable message that this is not the Bush-Cheney era of environmental neglect and abuse anymore. States have been given the right to set tailpipe emissions standards, carbon is likely to be regulated under the Clean Air Act. The stimulus bill contains as much as $80 billion for green energy related projects including a significant commitment to smart grids and new transmission lines that will connect America's renewable energy resources to consumers from coast to coast. An energy bill with more appropriations is promised. A national Renewable Portfolio Standard also seems inevitable. As noted in a prior post, from Canada to China to the G8 meeting in Italy, top administration officials have made energy and climate cooperation a centerpiece of a new form of a "green diplomacy." America, they are saying, will be a laggard no more on the one issue that most directly touches every person on the planet.

This is not to say there won't be debates and that special interests will not try to fine tune legislation to suit their needs. But a sea-change has occurred and it was never more clear than in last night's address by the president.

Why? Because in the first few weeks of this administration it has become clear that the engine of innovation leaders from both parties believe can help pull America out of recession runs on cleaner, more efficient energy. The president's energy agenda has taken center stage because no one wants to be dependent on Middle Eastern oil any more, few think we can play ostrich on climate change any longer and most believe that green innovation could be the next big boom to create millions of jobs and revitalize important parts of the U.S. economy.

This is no small thing. Pricing carbon changes the balance sheet of every company in America. It will generate important new revenues. It will help create an integrated global agenda. It will help speed the development of new technologies. Once these things were hype or implausible scenarios. Soon, it seems, they will be defining new realities.

As a sidebar: Also worth noting in the president's speech last night was that the only international institution referenced was the G20. This continues the very positive shift that was initiated during the Nov. 15 summit hosted by President Bush, a shift toward a new leadership group for the world economy and more broadly, for the international system, one that recognizes the rise and importance of countries like China, India, and Brazil.

Because the international system requires such a massive overhaul during the next several years -- beginning with discussions of revamping financial institutions and improving oversight at the upcoming London G20 meeting, continuing through discussions regarding the future of the WTO, of climate related institutions that may need to be created as part of the global negotiations that will continue in Copenhagen this year, through efforts to revitalize the U.N. and its Security Council and one hopes, to revamp the NPT so it might actually contain proliferation of nuclear weapons-one of Obama's international legacies is very likely to be the most sweeping overhaul of the international system since Truman.

For that reason determining which leading nations will be our key partners in that process is an important first step. It is another sign that this may well be a transformational presidency.

EMMANUEL DUNAND/AFP/Getty Images

EXPLORE:ENERGY, ENVIRONMENT, OBAMA ADMINISTRATION

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ZATHRAS

12:15 AM ET

February 26, 2009

Variations on One Sentence

There was one sentence in President Obama's speech last night calling on Congress to send him legislation establishing a "market-based cap" on carbon emissions. One sentence.

That's not a Presidential commitment to serve as a political heat shield for the Congressmen and Senators who would have to go on the record in support of higher energy prices. It's a throwaway line, putting him on the record in favor of a concept. If this is a sign that Obama's will be a transformational Presidency, then I'm an autonomous robotic organism from the planet Cybertron.

To paraphrase the man himself, this is not a Democratic issue or a Republican issue. Both parties are united in their horror of telling the American people directly that the cost of the energy they use will be going up. The market-based cap's virtue is supposed to be its camouflaging properties; by setting up a regulatory system that would make all the decisions as to how much carbon (actually, carbon-equivalent pollutants) could be emitted, elected officials hope to avoid being blamed for higher energy prices.

It won't work, politically I mean. Republicans will make the argument that the carbon cap is just a sneaky way for Democrats to raise taxes; Democrats would respond with half-denials and defenses of a proposal too dense for Americans to understand; and Republicans would win -- which would be OK because a carbon cap won't work on the merits, either. If the story quoted here is correct, Obama recognizes the political problem, which hasn't gone anywhere.

Faced with a country in the midst of economic trauma, Obama may have little choice but to try and do the easy stuff on energy -- promoting subsidies for green technology development and increased weatherization. In the long run, though, the best way to tackle the difficult problem of energy is head-on. If fossil fuel energy needs to be more expensive, then just make it more expensive, through taxation: no camouflage, no evasion, just make the case and take your chances. After that has been done, some limited cap-and-trade activity might be helpful in specific sectors, but seeking to establish a market for carbon across the whole economy in a cheap energy environment is a fool's errand.

CTF

3:42 PM ET

February 26, 2009

carbon tax

Political expediency in not a good enough reason to settle on climate change legislation. We do need to face this head on, but I think that starts with a discussion about the relative merits of the option--including a revenue-neutral carbon tax. While more and more scientists, economists and opinion leaders are supporting a carbon tax, it is irresponsible not to consider it as a viable option.