The Easier Path To Cap-And-Trade

As they negotiate with Congressional leaders, the Obama transition team has been circumspect about the ordering and specific content of  his legislative calendar for the first 100 days. But from Obama's own mouth, we know that energy and climate change are priorities. On election night, Obama referred to terra firma as a "planet in peril."

Most outside observers assume that the Obama administration will work with Congress to pass standalone legislation that completely revamps the nation's energy laws and institutes an emission cap-and-trade system. Doing so would necessitate a public debate about the costs and benefits of energy transformation. It would involve,  necessarily, industry, and would require compromises.  Maybe, in exchange for significiant industry concessions about the structure of a cap-and-trade system,  Obama would give up on a windfall profits tax on oil companies; with gas prices low, that tax might not generate all that much money.  (Update: he's already thrown that idea away.)

But there may be an easier way for Obama to institute carbon caps without exposing himself to the political downsides, without giving up much of his political capital.  (Let me deal with an objection: yes of course the American people want energy independence and are very worried about global warming and support tougher rules and regs, but politicians haven't been terribly honest with them about the short-term (and potential long-term) costs of this type of change. Major congressional action might alter the political equation a bit.)

In essence, what Obama and the Democrats could do is to use the cover of a stimulus package to spend billions to create green jobs, and then pursue the carbon-capping half of the equation administratively, using laws like Clean Air Act.

Some of Obama's top environmental advisers have argued that the CAA gives the Environmental Protection Agency the authority to regulate already existing regional cap-and-trade regimes; the EPA would simply knit them together. Voila. National cap-n-trade. Well, yes, every state in the union would have to affiliate with a program or create one of their own, but many governors and legislatures appear ready to do this, conditioned on the federal government's willingness to administer it.

Georgetown law professor Lisa Heinzerling is a key member of Obama's environmental policy team, and a principal exponent of this view. In 2007, the Supreme Court agreed, ruling in Massachusetts v EPA that the Clean Air Act unambiguously permits -- and, indeed,  requires -- the ERA to regulate greenhouse gas emissions. Opponents had argued that any regulatory regime would rest on ambiguous science; the Court disagreed that the science of climate change was nebulous. And then Robert Sussman, who wrote this, just before Obama tapped him to co-chair his EPA policy review council:

"[A] new administration could enforce new global warming regulations with common sense, focusing on large emitters of greenhouse gases to achieve reasonable reductions while spurring trillions of dollars worth of economic growth and green-collar jobs."

Environmental policy reform advocates accuse the EPA of delaying these new rules, suspecting, probably correctly, that the Bush Administration wanted to bequeath them to the 44th president.

If Obama decides to do this, climate change conservatives will go ape. An end-run around Congress. An illegal intervention by the executive branch. No public debate, etc.  But it would work, and it would allow to tackle, say, health care, without the distraction of having to also put through another major piece of reform legislation.