No McCain Cap-and-Trade
by Myron Ebell
Issue 102 - February 27, 2008

Now that Senator John McCain (R-Az.) is the presumptive Republican presidential nominee and either Senator Hillary Clinton (D-NY) or Senator Barack Obama (D-Ill.) is going to be the Democratic nominee, I expect there will be a lot of big companies pleading with Congress to pass a cap-and-trade bill this year. Their reasoning is that they should negotiate a cap-and-trade scheme that “they can live with” now rather than be faced with a political climate next year that is more favorable to a cap-and-trade bill with much more onerous targets and timetables.

I think this is foolish, and I hope that the opponents of energy rationing and global warming alarmism won’t buy into it.

In my view, a “reasonable” cap-and-trade bill this year will only set the stage for a much bigger bill in the next Congress. That is the pattern of major environmental legislation. First, pass a bill that nearly everyone agrees is reasonable and achievable, and then use that agreement as the staging ground to demand much more.

The Endangered Species Act of 1973 was preceded by acts of 1966 and 1970. The 7.5 billion gallon ethanol mandate enacted in 2005 was replaced by a 36 billion gallon mandate when Congress overwhelmingly passed and President George W. Bush enthusiastically signed the anti-energy bill in December. That bill also included a significant increase in Corporate Average Fuel Economy standards for new vehicles. But already environmental pressure groups have announced that CAFÉ was just the beginning of their efforts to force automakers to reduce greenhouse gas emissions.

Rather than pre-emptive capitulation, I think the correct strategy is to resist cap-and-trade legislation while the realities of energy rationing sink in. It will be more difficult to enact cap-and-trade in the next Congress, even if the new president and more members of Congress support it, because the high costs are becoming ever more apparent in the European Union.

While I think we can win by waiting this one out, there are unfortunately all too many defeatists in the business community who can’t resist the temptation to snatch defeat from the jaws of victory.

Myron Ebell is director of energy and global warming policy for the Competitive Enterprise Institute