Climate Policy That Creates Dependency: It’s Not a Bug…It’s a Feature

One of the most significant problems with current climate policy is that costly failures have been difficult to eliminate. Even when it becomes clear that a policy isn’t achieving the promised environmental goals, special interest groups that financially benefit from the policy prevent it from being eliminated.

The best example of this is biofuel policy. Even Al Gore now admits the real damage caused by biofuel subsidies, both to the environment and the federal budget. He admitted:

It is not a good policy to have these massive subsidies for (U.S.) first generation ethanol. First generation ethanol I think was a mistake. The energy conversion ratios are at best very small. It’s hard once such a program is put in place to deal with the lobbies that keep it going.

With environmental damage and subsidies locked in, it is difficult to remove bad programs, wasting money that doesn’t improve energy efficiency.

While this has been correctly seen as a drawback by Gore and others, Senator Maria Cantwell’s new cap-and-dividend plan on carbon emissions touts the fact that the program creates dependency as a “key feature” of the plan. Joel Merkel, a policy advisor to Senator Cantwell who spoke at a climate conference last weekend, described how that dependency would be created.

Under the Senator’s C.L.E.A.R. Act, companies would pay to emit carbon, generating about $125 billion in revenue. Three quarters of that amount would then be sent to the public in the form of a check. Those checks, Merkel bragged, will make it difficult to get rid of the program.

It’s a politically reinforcing way of sustaining that program in the long term. And makes it very difficult to repeal it. It increases the popularity of the program. This is one of the key features of actually providing a rebate to consumers.

If you assume that politicians never make mistakes, I suppose, increasing dependency and making it hard to repeal the program is a positive.

If, however, you’ve paid any attention to the many climate policy failures — biofuel subsidies being a dramatic example — you might want a policy that is more flexible. What if climate change is less than expected? What if the cap creates significant economic impacts?

Cantwell’s plan is another example of how politics has come to trump science when it comes to climate and energy policy. Making the public more dependent on government isn’t a flaw of the program — it is a “key feature.”

You can see the video here.

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