Analysis and commentary on economic news, trends and issues, with an emphasis on Seattle and the Northwest.
June 26, 2013 at 8:44 AM
Obama, the climate, the economy
I’ll have more to say about President Obama’s climate-change initiatives, announced Tuesday, in a column soon. In the meantime, some initial impressions:
It was a good speech, courageous, tough in many ways (“we don’t have time for a meeting of the Flat Earth Society”) and long overdue. Only so much can be done by executive order. Only Congress could do the thing that would most address the greenhouse gases that are a heavy cause of climate change: Levy a carbon tax. That would be a game-changer because it would, for the first time, assign a cost to this pollution and make it more (and appropriately) costly. Alternatives would be competitive from a price standpoint. Fossil-fuel industries would have an incentive to do one essential thing necessary to prevent the worst: Keep most hydrocarbons in the ground. Without a carbon tax, any other efforts will be working the periphery.
On the other hand, he gives a good speech. How will the inspiring rhetoric about future generations and tough talk about using the Environmental Protection Agency to regulate CO2 mesh with the Army Corps of Engineers deliberately excluding a broad environmental study of coal exports from the West, including coal ports from Washington and Oregon? Mr. Obama has a history of drawing lines in the sand and retreating in the interests of compromise that never happens. It was also disheartening that he never mentioned Amtrak — facing devastating cuts in the U.S. House on top of funding cuts for short-distance trains — and under-funded transit as important tools to reduce carbon and give people choices, too.
The president will face much more formidable opposition than he did with health care, for in that case he co-opted the big insurers and much of the for-profit health sector, which stands to gain new business. The fossil-fuel industry is perhaps the most potent lobby in Washington, equal at least with the bankers. Add in automakers, road-builders, etc. — if they form a united front — and even the executive orders will be stymied.
The president rightly emphasized that pursuing cleaner energy would create jobs, and that a transition would be gradual. What is undeniable is that if the nation took serious action to address carbon pollution, some jobs would initially be lost. But what is also true is that climate change is extracting an economic cost even now and the bill will only grow as the situation grows worse in coming decades. Unfortunately, climate-change economics is inexact. The threat to X-number of jobs at a coal mine is compelling. The damage to the planet and, yes, its market activity, too, will be much greater. It’s more difficult to pin down.
And Don’t Miss: Labor’s declining share is an international problem | NYT/Economix
Today’s Econ Haiku:
Feeling better now?
China’s banks are really fine
Life of the party