I haven’t had time to study the new edition of Lieberman-Warner, which bills itself as this fall’s comprehensive political consensus on national climate change policy. The broad outlines provided here make two things clear however:
1. The bill falls far short of what is needed. It covers only a portion of the economy, sets targets that are too low and auctions too few of the permits. It allows too many loopholes, such as offsets and provisions to raise the caps against promises of future tightening. It rebates exactly none of the (insufficient) auction revenues. This last point is important for both political and economic (demand-sustaining) reasons. It micromanages funding for energy alternatives, with several earmarks that are dubious at best. It would take a much longer post to spell out all of the particulars, but I hope we will soon have a thorough analysis. (If you are producing one, or if one crosses your screen, please give us a link.)
2. The bill represents a compromise based on today’s political alignment. If it were to be passed, and if someone could get Bush to sign it as he lay in a hospital post-surgical room fogged out on painkillers, it would be a terrible mistake, locking us into a bad framework for years to come. 2008 should be the year of climate debate, not climate decision. Progressives should put forward a simple, comprehensive, forward-looking bill to focus the discussion, even though it would have no chance in the current congress. After November 2008 we should be in a position to get something on climate that goes far beyond what is possible today.