ANWR, Energy Policy, C&T (Links to your Heart’s Content)

I wish in a sorta perverse way that the Democrats would lift the federal ban on off shore drilling and let each state decide what to do (Alaska would go yes, Florida  probably no).  Just so 10 years later when the heft of the oil comes out and gas is already at $8/gallon and then the price reduces to $7.75/gallon they will have their asses handed to them.  But we know it never works that way.  They will have gone on to some other crazy marginal piece on some huge issue that is supposed to be the ur-solution and then bash Democrats for being against it.  ANWR has become the conservative energy policy version of Missile Defense.

The result of which is the following for McCain (from Yglesias):

Now there’s a coherent case for more drilling. It would say something like “the economic benefits of cheap gasoline exceed the environmental and other harms of massive gasoline consumption.” But McCain, whether he realizes it or not, has endorsed a carbon cap-and-trade program that will necessarily reduce consumption of fossil fuels and raise the price of gasoline. If you want cheaper gas, you don’t cap carbon emissions. And if you want to reduce carbon emissions, you don’t try to reduce the price of gasoline.

But McCain wants political credit for breaking with GOP orthodoxy on climate change, and he doesn’t want to bite any of the bullets involved in breaking with GOP orthodoxy on climate change, so instead he’s come up with an incoherent mess.

As well as these quite sane remarks from John Cole:

The thing is, though, if we start offshore drilling immediately, and I will throw in drilling in ANWR and anywhere else you want to drill, the price of gas is not going to drop to $2.00 a gallon. It just isn’t- oil is a fungible commodity, is restricted by our refining capacity, and so on (take note of the fact that the production of gas-guzzling SUV’s is tapering off– think there is a connection to oil prices? ). Not to mention the overseas demand in places like China and India and whatnot are going to double over the next ten years. So $2.00 gasoline is just a pipe dream, most certainly will not happen in the long term, and definitely not in the short term.

This is not to say that I am fundamentally opposed to offshore drilling- I have repeatedly stated that any rational energy policy needs to look at every available possibility, to include drilling, increased refining, higher CAFE standards (not the weak increases that just passed that will not take place until 2020), targeted tax cuts aimed at spurring technological advances in green technologies, nuclear power, and so forth, but the notion we can drill our way out of our current problem is absurd. As such, it should surprise approximately NO ONE that this will become a key plank in the 2008 Republican election gambit.

And to round out Douthat:

But McCain’s embrace of cap-and-trade didn’t happen in a vacuum: It was an attempt, albeit a misguided one, to break with the heads-in-the-sand approach to energy and climate change that far too many conservatives have been taking for far too long. And the right-wing zeal for drilling in ANWR has been part of the problem, not part of the solution: It’s licensed conservatives to posture about energy independence while sidestepping the global-warming debate entirely. If the argument for drilling in ANWR were embedded in a broader Jim Manzi-meets-Shellenberger-and-Nordhaus approach to the dual imperatives of cheaper and cleaner energy, then I’d be all for it. But for the most part, that isn’t how it’s being framed. It’s just “drill here, drill now, pay less,” full stop. Which is bad policy and bad politics.

The Nordhuas-Shellenberger meets Manzi argument (follow the links via Douthat) is that the cap and trade (and/or carbon tax) won’t work economically.  A similar argument is made by Bjorn Lomborg.  There is a  split between Manzi (conservative) and S&N (center-left) as you can read in this reader’s letter to A Sullivan, with Manzi wanting market only approaches (perhaps including dangling giant cash prizes for innovation in clean energy which I’m all in favor of) while S&N go for a more robust government stimulus package (a la Kennedy’s call for and funding of the Space Program).

While I’m agreeable to that approach (combining the two), and I generally think their economics is right, there may still be a place for cap and trade along the lines laid out by Yglesias here. That is it comes at an economic cost but forces a quicker movement to clean energy, sending a stronger signal than perhaps say government investment (via S&N).  If Cap and Trade is to be implemented however it must follow Obama’s plan of auctioning the carbon permits instead of giving them away which is in McCain’s plan.  The Europeans went more the McCain route and gave away the permits and carbon use has actually increased (!!!).

The revenues generated by the permits are then equally dispersed as dividend payments to American citizens, thereby propertizing (Peter Barnes’ term) the commons, and building incentives for the populace (not market or government monopolies).  Robert Reich on that point here.

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  1. […] environmentalism | Tags: ANWR, Energy policy, Environment, Off shore drilling |   When in this post I picked an educated guess (though pretty much off the top of my head) and said drilling in ANWR […]


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