Earth Protect Blog

By Darrell Delamaide

WASHINGTON (MarketWatch) — An absolute monarchy can find it easier to implement enlightened policy than a democracy in hock to vested interests, so it was only mildly surprising when a Saudi Arabian prince said the world’s largest oil producer intends to rely 100% on renewable energy within a generation or so.

Whether Prince Turki Al Faisal Al Saud was serious when he made this declaration at last week’s global economic conference in Brazil, his statement on the eve of Hurricane Sandy’s devastation underlined the absence of serious debate on carbon emissions and climate change in this year’s presidential campaign.

President Barack Obama, in particular, who was gung ho on cap and trade during his 2008 campaign, has studiously avoided the topic, while Republican rival Mitt Romney has celebrated fossil fuels as if the damage done by carbon emissions to the environment and the long-term sustainability of the planet was a subject for nerdy pinheads and nothing that affects the public weal. Read Rex Nutting’s column: Despite Sandy, talk of climate change is stifled.

Obama added insult to injury when he disingenuously commented in an interview with MTV that climate change is a “critical issue” and he was “surprised” it didn’t come up in the presidential debates — like, gosh, he was just a passive observer.

With a good portion of potential votes for his re-election coming from states heavily dependent on coal, Obama has unquestionably played politics in avoiding the issue. His “all-of-the-above” energy policy, with only a nod to developing renewable energies, is the closest he has been willing to come during the campaign to addressing emissions. 

The question is whether Obama, if he wins a second term, would seek to make action on climate change a major component of his presidential legacy, along with health-care and perhaps immigration.

Historian Douglas Brinkley suggested as much in comments he made about his recent interview with the president for Rolling Stone magazine, hinting that climate change was a subject discussed with Obama off the record.

This week’s “perfect storm,” coming on the heels of last summer’s scorching drought, was a reminder that climate change, in fact, is not an academic subject, nor is it, as Obama seemed to suggest on MTV, something that concerns only future generations.

No less an authority than Munich Re, one of the world’s biggest reinsurers, said in a study on severe weather in North America released last week that analysis of its comprehensive database of losses from natural catastrophes “provides new evidence for the emerging impact of climate change.” Read more about the Munich Re study on climate change and insurance losses.

“Climate change particularly affects formation of heat-waves, droughts, intense precipitation events, and in the long run most probably also tropical cyclone intensity,” the German reinsurer said in its press release on the study. Sound familiar?

Munich Re doesn’t have an ideological or political axe to grind — it’s just one of those private-sector companies trying to make a buck and taking an unvarnished view of the world as it really is.

Many businessmen outside of the oil and gas industry, in fact, are willing to embrace measures to reduce carbon emissions. The short-lived Chicago Climate Exchange founded in 2003 by financial futures guru Richard Sandor enlisted several hundred of America’s biggest companies in a voluntary scheme to trade carbon and other greenhouse gases with the goal of reducing emissions.

While the Chicago exchange ran out of gas in 2010 for lack of political follow-up, the ambitious European Union Emissions Trading Scheme continues to reduce emissions in Europe, even as EU officials tweak it to take account of various bumps in the road. Read more about what the EU is doing about climate change.

Sentiment within the Beltway seems to be that, given Republican opposition to a cap-and-trade scheme, any actions on carbon emissions in a second Obama term, beyond further regulations from the Environmental Protection Agency, would have to be by way of a carbon tax, perhaps as part of a comprehensive fiscal reform to be offset by reductions in other taxes.

Indeed, even some of Romney’s economic advisers, such as Greg Mankiw and Glenn Hubbard, have been big proponents of carbon taxes as a way to induce industry to adopt lower carbon emission technology. Read about Mankiw’s Pigou Club for higher gas taxes.

But during the campaign, Romney has rejected any moves to restrict carbon. “Spending trillions and trillions of dollars to try and reduce CO2 emissions is not the right course for us,” he reportedly told an audience at a fundraiser, and he wants to roll back EPA authority to regulate carbon dioxide.

So there may be room for bipartisan action, but not under a President Romney, if we are to take him at his word.

It would take an Obama in a second term willing to buck the oil, gas and coal lobbies to have the U.S. take serious action on climate change. Not as easy as a fiat from a royal family, but not hopeless either.
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