An orange or a green planet? That is the question.
I like my politics. A lot. Usually, election time is my favorite time of every other year. I became a US citizen in 2008 and recall casting my first vote for president with our newborn baby boy strapped to my chest. This year, however, I would like for someone to knock me out and wake me up when it’s over.
The spectacular implosion of the Republican Party over the past six years comes at a precarious point in our planet’s history. And this has grave consequences for energy and environmental policy locally, nationally and globally. Tomorrow’s choice for president is portrayed in many places as win-or-lose choice by both sides. I would argue that the environment is likely going to lose no matter who wins the presidential race. The question is how bad things are going to get.
Let’s back up for a second. The past eight years of the Obama presidency have brought monumental change for the better in the environmental and energy arena. We have made significant progress on fuel economy standards, emissions standards for power plants, the introduction of a real social cost of carbon into federal rulemaking, the rapidly increasing penetration of renewables on people’s roofs and on the people’s plains and in their valleys. President Obama will go into the history books as the first African American president. I would argue that he will be remembered by many future generations as the Greenest president this country has ever had.
Many of the recent regulations are being passed in the form of command and control with significant flexibility built in. Still, these are not the economists’ preferred choice. Yet, team Obama got it done. He had great counsel during his eight years in office, helping design programs that built in flexibility where possible. Joe Aldy, Ann Wolverton, Nat Keohane, Billy Pizer, Michael Greenstone, Arik Levinson, Matt Kotchen, Glenn Sheriff, Sheila Olmstead, Gilbert Metcalf, and Kenny Gillingham are just a few of the brilliant environmental economists that spent time in the White House and at Treasury helping design and implement smarter and more efficient policies. I do note a curious absence of Berkeley environmental economists, but maybe Secretary Clinton will deck the halls with Berkeley folks if elected. We’re here for you Madam Secretary.
Maybe the most significant achievement and point of departure is the signing of the Paris accord. No previous administration has managed to credibly commit the US to meaningful greenhouse gas emissions reductions. Clinton (Bill, President) signed the Kyoto agreement, knowing full well that Congress would never ratify it. Under Obama, we signed an agreement that does not need to be ratified by Congress as the reductions can be achieved through agency actions. And this is where the trouble begins.
If Tuesday results in a Trump presidency, we would probably get Dennis Rodman as Secretary of Energy, Tila Tequila as EPA Administrator and Peter Thiel as Secretary of Treasury. Ted Nugent at Interior would be another obvious appointment. All jokes aside, a Trump administration could significantly harm federal regulation by simply gutting the agencies in charge of implementing and enforcing them. I am not a lawyer, but the amount of damage that could be done to regulations, which are only a first step in themselves towards “solving” the climate problem, could be massive under a Trump presidency. I doubt that the majority of Americans could identify the EPA administrator or Secretary of Energy, but a lot is riding on these four shoulders.
But all will not be fine if Secretary Clinton becomes President Elect Clinton on Tuesday. If the obstructionist behavior on the Supreme Court nomination is any indication, there is a good chance that the opposition in Congress will lay down thorns on the path to a greener least cost regulatory path to solving our energy and environmental problems. The Republican Party, which embraced Milton Friedman’s ideals of markets, through obstruction would leave President Clinton little choice other than pursuing command and control regulations in the same way president Obama has. This is going to be costly. Marginal abatement cost curves are upward sloping, meaning that some approaches to abatement will cost a lot more than others. It is critical that the world find the lowest-cost ways to reduce greenhouse gas emissions so that all economies, especially those in the developing world, can continue to grow.
The climate folks tell us that we have to head into a largely carbon free future fast: 80% emissions reductions in a bit over 30 years. That is a revolution not an evolution of the energy system. Doing this via command and control is economically reckless and irresponsible, in the same way that doing nothing about the problem is.
I realize that academic economists know as much about passing and implementing actual environmental policies as Albert Einstein knew about running a large Hadron Collider. It takes a village of lawyers, policy wonks and coalition builders to get things done. But there is no arguing with the basics: price-based policies are the least cost way of reducing pollution. Your political views are as relevant to that statement as they are to whether gravity exists. This is science, not faith.
So, where do we go? If the GOP is smart in a Clinton presidency, it reinvents itself and reclaims its territory, which should be market-based regulation. Once one accepts that environmental and climate regulation is here to stay, their push should be on efficiency. Continuing to obstruct at the federal level will surely amplify the polarization of the American people. In order to solve the significant problems facing us, which are broader than those at the heart of this blog, we need smart federal action. Leaving environmental policy up to the states will be costly (see Lucas’ blog on the fate of market based policies on the west coast), deeply flawed (recognizing that all regulation is imperfect), and wholly inadequate for addressing global problems like climate change.
This economist is worried about what happens on Tuesday. We have much work to do to solve the problems facing us. And we can only do it if we come together and engage in a smart, civil and engaged fashion.
NOW GO VOTE.