Let it be

The Economist

Let it be

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THE one approach I will not accept, said Barack Obama in June of Congress's faltering efforts to fight global warming, is inaction. Instead, the president instructed America's lawmakers to seriously tackle our addiction to fossil fuels. Yet the energy bill unveiled by the Democratic majority in the Senate on July 27th does nothing of the sort. Harry Reid, the majority leader, having earlier abandoned as hopeless an effort to limit America's emissions of greenhouse gases through a cap-and-trade scheme, is proposing nothing more substantial than subsidies for home insulation and trucks that run on natural gas. (The bill also removes the $75m cap on oil firms' liability for damage from offshore spills, in response to the disaster in the Gulf of Mexico.) Mr Obama has said he will fight on for a weightier bill. But the prospects do not look good. Mr Reid complained that inveterate Republican opposition had prevented the Senate from taking up the cap-and-trade scheme passed by the House of Representatives last year. That is true: even Republican senators who had supported the idea in the past, such as John McCain and Lindsay Graham, had pointedly backed away from it in recent months. Most Republicans dismiss cap and trade as a job-killing stealth tax. They point out, rightly, that any measure that puts a price on carbon would raise energy billssomething they view as madness when the economy is so weak. Elections in November are likely to increase the Republicans' strength in Congress, and thus make the adoption of strict limits on emissions even more unlikely. But they are not the only sceptics. Many Democrats, especially from states with a lot of coal or wilting manufacturers, have long been unenthusiastic. Ten such senators wrote to Mr Reid in 2008 expressing grave misgivings about cap and trade. Some members of the House complain that their vote in favour of the scheme could cost them their jobs in November. Voters, by most pollsters' accounts, are becoming less energised about global warming. Earlier this year Gallup found that 48% of moderate Americans believe the seriousness of global warming generally exaggerated, up from 35% just two years before (see chart). Cap and trade (or crap and tax, as more excitable Republicans have called it) has become so controversial that Mr Reid now refuses to use the term, referring obliquely to controls on pollution. Even the president, environmentalists complain, has not done as much as he might have to push climate legislation forward, despite his stirring rhetoric. He deliberately left the details up to Congressa mistake in the eyes of activists, who think he should have demonstrated his resolve by taking charge. There was none of the individual browbeating of recalcitrant congressmen that Mr Obama exercised with recent bills on financial reform or the extension of unemployment benefits. His advisers seem to have concluded that a climate bill was a non-starter given the parlous state of the economy, and concentrated on health care instead. That is quite a reversal for a man who declared, after he clinched the Democratic nomination for the presidency, This was the moment when the rise of the oceans began to slow and our planet began to heal. Just last year, at the United Nations climate talks in Copenhagen, Mr Obama promised to reduce America's emissions in 2020 to 17% below their level in 2005. The demise of cap and trade in Congress, however, does not call a complete halt to the administration's efforts to cut emissions. In 2007 the Supreme Court ruled that the Clean Air Act could be applied to greenhouse gases, and therefore that the Environmental Protection Agency (EPA) should decide whether they posed a danger to public health. Last year the EPA concluded that they did. It is now working on regulations to mitigate the danger, to be applied to big, stationary sources of emissions such as power plants over the course of next year. The EPA is likely to set minimum standards of energy efficiency and to mandate the use of particular green technologies, among other things. Using the Clean Air Act, by the administration's own admission, is not the cheapest or most effective way to cut emissions. But officials at the EPA also say that they are prepared to use the law if Congress fails to act. And it is not the only tool at the president's disposal: different government agencies have the power to set fuel-efficiency standards for cars and energy-efficiency rules for appliances, for example. The severity of these regulations, by and large, is at the government's discretion. Many states are also pressing ahead with planned curbs on emissions. Ten north-eastern ones have already put a cap-and-trade scheme in place for utilities; several more in the West and Midwest have pledged to follow suit. California is particularly ambitious: it aims to pare its emissions back by 85% by 2050. Nicholas Bianco and Franz Litz of the World Resources Institute, a think-tank, have studied the potential to cut emissions under existing state and federal regulations. They conclude that if all the officials involved are ambitious, America could belch out 13% less by 2020. That is less than America pledged in Copenhagen, and also less than most scientists would like. And it is the optimistic scenario. In November's elections Californians will vote in a referendum on the repeal of the law underpinning the state's planned emissions cuts. In several other states, Republicans are running in noisy opposition to Democratic environmental initiatives. There are moves in Congress to repeal or defer the EPA's power to regulate greenhouse gases. And Mr Obama's administration will probably hesitate to ram through dramatic emissions cuts by decree, for fear of appearing undemocratic. Even if officials around America do promulgate fierce regulations, those will take some time to come into force, and are bound to be the subject of endless lawsuits. Moreover, such an approach will lead to a patchwork of different rules in different states, to the great expense and annoyance of many firms. Adding to the confusion and uncertainty will be the chance that a more sweeping federal law might eventually be enacted, if the political winds change once more. That may leave big energy firms regretting their opposition to cap and trade. As one old utility hand puts it, There's a sense of ruefulness in the industry. It is widely shared.