American-style capitalism, sans regulation, has earned its present bad rap. Even so, some market mechanisms do work quite well.
Markets discover commodities pricing and keep costs low, and they are very efficient at making sure that metals, oil, food, etc. are moved to where the demand is highest from where the supply is greatest. A market in traded sulfur emissions imposed by the Clean Air Act has enabled fossil fuel plants to reduce sulfur dioxide emissions (the main source of acid rain) dramatically since that market’s inception.
And soon, President Obama and the Congress will catch up to New England and the European Union with a new vision for capitalism – carbon capitalism.
Carbon capitalism involves a cap-and-trade market for carbon dioxide, and it makes a lot of sense. Just like sulfur dioxide, CO2 emissions from different sources mix with each other in the atmosphere, and for this reason trading emission credits between one source and another is physically viable. Add in the ability to bank emissions credits, and you’ve got the makings of a complete carbon market and financial system.
So if cap-and-trade is really carbon capitalism, why do so many supposed capitalists hate the idea of a market in CO2?
SolveClimate had the luck to bump into New York Congressman Charles Rangel, chairman of the House Ways and Means Committee, as he arrived by train in Washington, D.C., on Monday, and he was gracious enough to answer a few questions about climate legislation as we walked along the platform.
It was the day before President Obama addressed the joint session of Congress, asking for a cap on carbon emissions. When we asked Rangel how his committee would respond to climate law, here's what he said:
Whether it's cap and trade or a carbon tax, we're there.
On the question of where the money from carbon revenues should go, he voiced concern about protecting consumers from rising energy prices that a cap on carbon would bring:
We've got to provide a cushion. No question about it.
Watch the video. It will make you feel like you're walking the platform at Union Station alongside the powerful Congressman as he pulls his own bag behind him. Unfortunately, we ran out of platform and the drive-by interview was over, but he gave us a peek into his intentions for influencing the shape and scope of climate law.
At issue is hundreds of billions of dollars of new revenues, so it should be no surprise that Rangel has his antenna up as chairman of Ways and Means -- that's why he said, "We're there." Since then, he has announced that his committee would be marking up a climate bill of its own before Memorial Day.
Thankfully, California keeps refusing to be a party to the Bush administration's war on carbon pricing.
Latest: The Bay Area Air Quality Management District has proposed to slap a carbon fee on thousands of Air District-permitted facilities emitting greenhouse gases.
