Morning Bell: The Left’s Undemocratic Blueprint for Carbon Capping

Conn Carroll /

The biggest reason liberals failed to get the Senate to pass the Lieberman-Warner mandatory carbon emission cap bill was because they failed to convince the American people that the economic harm carbon caps would cause were worth the meager and mostly symbolic benefits. Since very few analysts believe the price of energy will be any lower in 2009, the left faces certain failure should they try a legislative fix again next year.

Enter the California model. Last week the California Air Resources Board (CARB) unveiled its plan to reduce California’s current carbon emissions by 10% by 2020. The plan regulates all parts of California’s $1.6 trillion economy affecting refineries, farmers, manufacturers and even forest managers. In order for the plan to work, the CARB would have to cut 169 million metric tons of carbon dioxide a year by 2020. One of the first steps the plan takes in this direction is $50 million in fees levied on “large polluters” to cover the administrative costs of the up coming central planning.

The genius of the plan is its completely undemocratic nature. The plan is open for comment through the summer, but the CARB is not bound to incorporate any possible objections from Californians when the plan becomes final this November. Unlike U.S. senators, no member of the CARB ever has to face voters since they are all appointed by the governor. Shielded from voters, the CARB is free to be exceedingly vague about how it will meet such ambitious goals. The plan offers no details on the costs it will inflict on industry. While power plants account for only 25% of the state’s greenhouse gas emissions, the plan counts on energy suppliers to make 35% to 40% of the carbon reductions. The CARB failed to assess any costs borne by industry, instead citing a single “macroeconomic analysis” that claims the entire plan would increase California’s GDP by 1% when the plan was fully put into place.

That analysis is completely specious considering how few of the actual details have been worked out. So far, the plan is completely agnostic on whether the CARB will auction or giveaway carbon emission permits. A decision to auction the permits would inflict billions of dollars in transition costs on high carbon producing industries. Also completely undecided is whether or how many international carbon offsets Californians will be able to purchase to help meet their caps. The CARB has even indicated that if their carbon permit plan fails to reduce emissions, they reserve the right to institute a carbon tax.

The scariest part about the California plan is that the foundation for a repeat at the federal level has already been laid. The Wall Street Journal reports today that the Environmental Protection Agency will release a document later this week that could become “the legal roadmap for regulating greenhouse-gas emissions in the U.S.” Using the Clean Air Act, lawyers at the EPA claim they have the authority to regulate greenhouse-gas emissions. Such a decision would unleash a regulatory Pandora’s Box, vesting the EPA with vast control over the entire economy. Worse yet, when regulating pursuant to the Clean Air Act, the EPA is forbidden to take into account the economic costs of their regulations.

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