There’s an interesting insurgency that may give lie to recent predictions of federal failure on cap and trade. Senator Maria Cantwell from Washington has a modified “cap and dividend” bill, called the CLEAR Act, that’s slowly but surely picking up momentum.
On Wednesday, the Washington Postgave it a nod:
Is there no alternative between simple do-nothingism and House complexity? In fact, there is. An alternative proposal increasingly capturing interest on Capitol Hill is the CLEAR Act… It would also raise costs, of course, but the government would rebate 75 percent of the revenue from the permit auctions back to the populace.
…80 percent of Americans would break even or come out ahead, even as consumption patterns shifted toward greener goods and greater energy efficiency.
That came on the heels of an approving editorial in The Economist:
Enter Maria Cantwell, the junior senator from Washington state. She is pushing a simpler, more voter-friendly version of cap-and-trade, called “cap-and-dividend”…
Ms Cantwell’s bill is refreshingly simple. At a mere 40 pages, it is one-thirty-sixth as long as the monstrous House bill (known as “Waxman-Markey”, after its sponsors)…
Then, too, there was a qualified endorsement by Harvard economist, Robert Stavins:
So, the politics of their proposal looks appealing, and the substance of it looks promising—a simple upstream cap-and-trade system (called something else), with 100% of the allowances auctioned (with a “price collar” on allowance prices to reduce cost uncertainty), 75% of the revenue refunded to all legal U.S. residents, each month, on an equal per capita basis as non-taxable income…
That’s the good news. The bad news, however, is that the proposal needs to be changed before it can promise to be not only politically attractive, but economically sensible…
By the way, I can’t recommend Stavins’ analysis highly enough. It’s fantastic (though I certainly don’t agree with everything he says in it).
And what does Sightline think of Cantwell’s bill? We like—no, make that love — elements of it, such as the full auctioning and three-quarters dividend, though there are some smaller aspects we’re not wild about. Mostly, however, we worry that the bill’s big selling point with pundits—it’s brevity—is actually its Achilles Heel.
Getting the details right matters hugely, and the current version of CLEAR is simply too short on the nitty-gritty to assuage our concerns. That’s especially true because the cap-and-trade program at the heart of the CLEAR Act does not, by itself, achieve the overall carbon reductions that the bill promises. (In the near term, it doesn’t even really come close.)
The gap is to be addressed by a suite of complementary policies that aren’t well described. If those policies turned out to be robust and effiicient, we’d be in the tank for CLEAR. If those policies turned out to be half-measures and political compromises, we’d be worried. But as it is, there’s just not enough information to say one way or the other.
For more on Sightline’s position, please see the blog post that I wrote with Alan Durning: Cantwell’s Cap-and-Trade Bill: Almost Genius.