The once and future Democratic consensus on climate change

Someday — perhaps even someday soon — Democrats will regain some power in the US federal government. What would that mean for climate change policy?

Over at the Atlantic, Rob Meyer tries to answer that question with an insightful piece examining the state of play on climate change politics in the Democratic Party. It is, to make a long story short, a mess. The fragile consensus that once existed among Democrats, embodied in the Waxman-Markey climate bill that passed the House in 2009, fragmented when that bill died an ignominious death in the Senate the following year.

And Humpty Dumpty hasn’t been put back together again.

Sens. Jeff Merkley of Oregon and Bernie Sanders of Vermont are holding down the progressive end of things, with bills that would end fossil fuel leasing on federal land and target 100 percent renewable electricity by 2050. In the House, Rep. Tulsi Gabbard of Hawaii has proposed the even more ambitious OFF Act, which would target 100 clean energy by 2035.

But the party hasn’t really rallied around any of those bills. Instead, various segments of the left are off doing their own thing: There are activists fighting pipelines, others fighting power plants, and others pushing divestment; there are federal bureaucrats working with the tools in the Clean Air Act; there are wonks fantasizing about a carbon tax; and there are congressional Democrats, doing basically nothing except condemning President Trump.

Becker1999/Flickr

As Meyer notes, on health care Dems have “Medicare-for-all.” On immigration, they have the DREAM Act. On LGBTQ rights, the Equality Act. What’s the slogan, the big bill, the central theme, on climate change? No one knows.

This lack of consensus, says Meyer, leaves Dems “shockingly unprepared” to take action at the federal level. That’s one reason (aside from, y’know, Republicans being in charge of everything) all the real action is at the subnational level, among cities and states, where there are still occasional opportunities to route around partisan gridlock.

This is all true, and interesting, and you should read Meyer’s story.

But this seems like a good opportunity to share one of my oldest and most enduring unpopular opinions, namely: The Waxman-Markey bill was good. Furthermore, if there is ever again to be consensus about a federal approach to climate change, it’s probably going to look something roughly like the Waxman-Markey bill.

Before you start composing that angry email, hear me out.

Any federal approach to climate change, to be politically and substantively effective, is going to be shaped by the following four imperatives:

1. It’s got to put a price on carbon.
2. It’s got to make regulatory changes that encourage a transition to clean energy.
3. It’s got to invest a lot of money: in clean energy research, development, and deployment, in infrastructure, in transition assistance, and more.
4. Within the framework of 1-3, it’s got to garner support from lots of diverse constituencies with contradictory demands, few of whom rank climate change high on their list of priorities.

That’s an extremely tight needle to thread. Waxman-Markey threaded it about as well as was possible in 2009. Insofar as it’s ever threadable again, the instrument will probably look like an updated version of Waxman-Markey (though of course its backers will be insane to ever acknowledge that fact).

To understand why this highly unpopular argument is correct, it’s important to first understand exactly what Waxman-Markey was.

Waxman-Markey wasn’t what you think

The climate fights of 2006 to 2010 happened during my formative years as a journalist, and I covered them with obsessive attention. In particular, I covered the effort, begun soon after the Democrats took the House in 2006, to assemble and pass a piece of comprehensive climate legislation, based on a consensus approach that had been brewing in environmental circles for years.

The episode proved ... disorienting. And demoralizing.

(Grist)

Suffice to say, the reality of Waxman-Markey — the actual bill shepherded through the House by Reps. Henry Waxman and Ed Markey, with crucial help from Speaker Nancy Pelosi — was sharply at odds with the various deformed and hideous phantasms that went by the name “Waxman-Markey” in public dialogue.

On the right, the bill was a looming, oppressive “climate tax,” an attempt by Democrats to grow government and nationalize large sectors of the economy. On the left, the bill was a corporate sellout, a sleazy Wall Street scheme that would shift money around to polluters but do nothing to reduce emissions.

Neither of those caricatures bore much resemblance to the bill as written (by Waxman’s adorably wonky staff). It was neither of those things. Most of all, it was not just a “cap-and-trade bill.”

Waxman-Markey was a tripartite piece of legislation, with three equal sections. Roughly speaking: The first established a cap-and-trade system — a declining cap on carbon emissions and a system of tradeable permits beneath it. The second was a series of wonky regulatory changes meant to boost energy efficiency and clean energy, including a national renewable energy mandate for utilities. And the third was a package of investments in clean energy, electric vehicles, assistance to affected industries, job retraining, protections for low-income consumers, and (much) more.

In short, the bill was a full-spectrum clean energy transition bill, which paid for its forward-looking investments with a price on carbon. The House team that developed it introduced it as a clean energy bill and always discussed it that way — it was called the “American Clean Energy and Security Act” — but they had no help from Republicans, other Dems, or the media, which insisted (and insists to this day, as Meyer’s article reflects) on treating the bill as though it were only cap and trade.

The tricky task of guiding this comprehensive package through the House was accomplished with incredible skill by Waxman (one of the last masters of the old politics). Along the way, he made plenty of compromises — weakening or eliminating regs, offering subsidies to heavy industry and “clean coal,” allocating permits for free, and allowing carbon offsets to be used in lieu of some permits.

These compromises were grubby, of course, and anathema to environmentalists, but they accomplished Waxman’s two key goals. First, they preserved the core architecture, especially the declining cap. That architecture, however flawed in its inception, could have been improved by future advocates and lawmakers. And second, the compromises got the bill passed, with eight Republican “yes” votes and 44 Democratic “no” votes.

The final bill, thanks to Waxman’s stewardship, reflected roughly the left edge of the possible in the House at the time. Left activists didn’t accept that then, and still don’t; 2009 is subject to endless just-so counterfactuals. (“If Obama had just made a few more speeches ...”) But in my view, Waxman navigated imperatives 1-4 about as well as he could have.

Photo by Alex Wong/Getty Images

The bill went on to die in the Senate, of course (here’s my postmortem, from July 2010). Throughout its short gestation and still birth, it was the victim of terrible timing and circumstance, again and again.

First and most fatefully, climate got bumped to fourth in line, after the stimulus, health care, and financial reform — all bruising, extended battles that the Dems eventually won. By late 2009, Republicans were furious, the Tea Party was organizing, and Dems had lost their fleeting 60-vote Senate supermajority. By early 2010, when the bill drifted into the Senate, the bloodbath of the 2010 midterms was just over the horizon.

In those circumstances, there was roughly zero chance of getting 60 votes in the Senate for another big Dem achievement, no matter what shape it took.

Though I know people love to debate hypothetical alternative strategies and policies, once climate was bumped back in line, its fate was sealed. The door to bipartisan federal legislation closed tight with the 2010 midterms and has been closed ever since.

The next federal attempt will answer to the same imperatives

Maybe something none of us can now anticipate will break the spell of polarization, loosen up the gridlock, and enable old-fashioned bipartisan (i.e., Democrats plus a handful of Republicans) federal problem solving on climate change. Miracles happen.

If it ever comes to that — if there is ever again a substantial bloc of Republicans in Congress who want to address this problem, enough to get Dems past 60 votes in the Senate — the same imperatives will apply.

Photo by Allison Shelley/Getty Images

To review:

1. There’s no way it will happen without pricing carbon. That’s the piece virtually everyone except the far right and the far left agrees on. Republicans will want something plausibly “market-based” and Dems will want revenue to pay for various investments and incentives. The obvious place to get that revenue is pricing carbon.

As to how to price carbon, I don’t know how the perpetual tax versus cap and trade debate will turn out. I could see states cobbling together regional cap-and-trade systems that eventually link up and go national. But the environmental justice community has convinced itself (erroneously in my view) that cap and trade is uniquely terrible, so that might fracture the left. Maybe the left and right can agree on a tax.

Who knows? As I’ve written many times, I don’t think the pricing mechanism matters as much to the outcome as the balance of interests. A tax and a C&T system can be designed to be functionally equivalent, or designed to be very different. Either can be designed to be durable, or fragile. Either can be corrupted or weakened by special interests. Ultimately, either will reflect those with the power to shape it.

What matters is getting the highest price on carbon (or the lowest cap on carbon) that can be gotten. That will require legislators well-briefed and adept enough to probe the edge of the possible.

Thus far, political experience seems to show that a price on carbon sufficient to do the job on its own is rarely, if ever, politically possible. So it must be supplemented by “complementary policies.”

2. One reason a price on carbon is not enough is that unpriced carbon is far from the only market distortion preventing the mythical “level playing field.” The energy sector is entirely structured by regulation and ridden with subsidies, old and new, explicit and hidden.

Good faith reform could theoretically bring much more transparency and competition to energy regulation. Many incentives — for energy efficiency, energy storage, or clean energy, for example — could be restructured along performance-based lines. Rather than legislators picking and choosing favored industries or technologies, industries could compete to meet performance metrics.

One way or another, though, regulatory reform will be a huge part of any large-scale effort to address climate change.

3. There’s no way around it: Addressing climate change means spending money — money for clean energy infrastructure, research, and deployment incentives; money to protect vulnerable communities and trade-exposed industries; money to prevent deforestation and improve agriculture; and money to buy off what is certain to be a motley coalition of interest groups, none of which (except perhaps environmentalists) are willing to lay down on the railroad tracks for climate change. They will all need other reasons to come along.

Conservatives love the idea of a “revenue-neutral” price on carbon, one that automatically returns all the revenue as tax cuts or dividends. But that is unlikely, certainly in standalone piece of climate legislation, for the simple reason that investments are what attract political support.

(Shutterstock)

4. Balancing all those demands and interests will involve a lot of ugly dealmaking. They will be different deals from the ones Waxman made, because the energy sector has changed enormously since 2009 and will continue changing.

But fossil fuels will not go gentle into that good night. Big Ag is still big. Big Auto and Big Sprawl are still big. Their power will shape the outcome.

The product of federal legislation will be compromised, complicated, and, in many respects, unsavory. That’s life in a big democracy. Dreams of a “simple” one-page bill are as forlorn now as they were when being used to bash Waxman-Markey in 2009.

The once and future consensus

Waxman-Markey was far from perfect. Many of the familiar critiques are valid: It contained too many offsets; it gave away too many pollution permits for free; it conceded far too much to the coal industry (ironically, the bill was probably US coal’s last, best chance of survival).

Most of all, its ambitions were far too timid. We are already on the verge of hitting its emissions target for 2020 (17 percent below 2005 levels) without any legislation at all. The bill’s authors did not foresee the explosive rise of natural gas and renewables or the precipitous decline of coal. They were creatures of 2008.

But the basic approach? It was good.

Climate wonks have learned a great deal about carbon policy (and clean energy) since then, in part due to experimentation around the world and in US states and cities. They will bring those lessons to bear in the next round of legislating. They will be creatures of 2020 (or 2024, or 2030, or whenever).

One thing they’ve learned — as Simon Fraser University’s Mark Jaccard expressed so eloquently — is that a price on carbon will never be enough. The real world will require a blended solution: a price on carbon, regulatory reform, and investments. In other words, the Waxman-Markey template.

Future legislators who tackle these issues may conclude that caps have historically been too timid and opt for a rising tax instead. Or perhaps they’ll opt for some hybrid instrument.

But they will extract revenue from carbon emissions. They will use that revenue to make investments and to assemble a working political coalition. And they will do lots of boring but important regulatory reform.

Smart senators who care about climate change, like Merkley, Sanders, and Whitehouse, ought to start thinking about what shape such a bill might take, even knowing it will be politically impossible for the foreseeable future. They ought to think about what essential theme it embodies — the simple Democratic message on climate change and clean energy.

Hopefully, next time they will sell it based not on the mechanism through which it raises money, but on the social and economic benefits it produces: a cleaner, safer, and more stable future.

Waxman-Markey got a bum rap and will mostly be remembered as a failure. But when our national fever finally breaks, and future legislators return to the table seeking a path forward on climate change, they will be following a trail Waxman-Markey blazed.

They will discover that the lost consensus of 2008 — in its basic shape, if not its particular numbers and details — was always what consensus will look like. And, however fitfully and slowly, they will find their way back.

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