Battleground Ohio

  Ohio isn't always the best place to live.  Crappy economy, crappy winter weather.  But there are some positives.  1) The state pays me to live here, 2) Ohio seems to be a hotbed for national politics*.  Case in point (From the WSJ Environmental Capital Blog via Google Reader from John C Whitehead):

Watch Ohio. The bellwether state holds its primary March 4, and has become a crucial battleground after Sen. Obama’s Potomac sweep. It’s also quintessential coal country, and not likely to cotton to the Illinois senator’s increasingly strident calls for quick and drastic action on climate change.

Read on...

Sen. Obama says he wants to put the White House back at the epicenter of the global warming debate, and create a G-8-style club led by Washington to tackle climate change. He backs the strictest greenhouse-gas emissions bill pending on Capitol Hill, one of two he co-sponsors. Although neither of the bills he supports call for it, he says he wants 100% auctioning of emissions permits from day one. That means emissions permits wouldn’t be given away to big industry and power companies, but sold—with the cost almost certainly being passed back to the consumer.

He favors a national renewable-energy standard. And a clean-technology venture capital fund. And more R&D dollars for nuclear waste storage, second-generation ethanol, nationwide energy-efficiency standards, and, of course, clean coal. Better get that research moving:

Until those technologies are available, I will rely on the carbon cap and whatever tools are necessary to stop new dirty coal plants from being built in America - including a ban on new traditional coal facilities.

His spat with Sen. John McCain—Sen. Obama said the Arizona senator’s climate-change proposals were decaffeinated—hinges on the gritty details of reining in the world’s biggest emitter of greenhouse gasses. That’s where campaign-trail rhetoric collides with policy reality. Sen. McCain favors gradually weaning America off coal. Sen. Obama says he wants no “free ride” for industry:

In addition to this [emissions] cap, all polluters will have to pay based on the amount of pollution they release into the sky. The market will set the price, but unlike the other cap-and-trade proposals that have been offered in this race, no business will be allowed to emit any greenhouses gases for free. Businesses don’t own the sky, the public does, and if we want them to stop polluting it, we have to put a price on all pollution.

I'm a fan of auctions.  They seem like fun. 

And : "Businesses don’t own the sky, the public does..."  For kicks, I'm thinking of going to an Obama rally and starting a chant of "Coase!  Coase!" 

Seriously.  To me a carbon tax is a political non-starter.  There's no way to get universal buy-in for the size of the tax that would be equivalent to the the cap and trade permit price.  Which do you think would go over better?  We're putting a carbon tax of $10 per ton, or you can buy a carbon emissions permit for $10 per ton.  Cap and trade is hot right now and politically feasible.  The reason a full auction might not work is industry buy-in.  Sure there are equity issues with 'free' permits, but those seem less obstructive to me than cap and trade being shot down by the coal lobby.

How will the call for auctions, higher energy prices, and a ban on coal plants play in Columbus–or Pittsburgh? Pennsylvania, also smack in coal country, goes to the polls in April.**

*Hillary Clinton is kicking off her Ohio campaign today with a public rally at THE Ohio State University.  She will be joined by Former Astronaut/Senator and namesake of the John Glenn School of Public Affairs at TOSU.  Around the same time I will be at the dentist having a crown put on a cracked tooth.  I'm honestly not sure which sounds like more fun.

**I have a better strategy: Biofuels.  Trust me, biofuels play big in Ohio.  We even have catchy names for biofuel subsidy programs like BiOhio.

Comments

[John Whitehead]

Tim,

Where is your heart icon?

I'm withholding all of your Google Adsense revenues due to your violation of env-econ.net holiday policy.

[Tim Haab]

My bad. Meant to do it then forgot. Fixed. Sorry. Again.

[Wy]

Personally, I don't see why a phased in carbon tax is a non-starter politically. No sudden jump, phase it in over a period. IMHO, free credits for pollutersARE a non-starter unless they're allocated on a per-capita basis (say, similarly to individual deductions).

There you go, instant 'trickle up' economic stimulus package. =) for individuals AND your credits. Me, I'll hang on to mine. :P

[Tim Haab]

Wy,

I'm willing to listen. Do you know of any examples of taxes that have been ratcheted in? I can't think of any off the top of my head, but I don't have a very good memory.

Tim

[Wy]

Personally, I don't see why a phased in carbon tax is a non-starter politically. No sudden jump, phase it in over a period. IMHO, free credits for pollutersARE a non-starter unless they're allocated on a per-capita basis (say, similarly to individual deductions).

There you go, instant 'trickle up' economic stimulus package. =) for individuals AND your credits. Me, I'll hang on to mine. :P

[Tim Haab]

Oh, and I LOVE the idea of per capita permit allocations. i'm tempted to go out and buy the c-bay domain name so I can set up a carbon auction site. And yes, I would probably sell.

[Wy]

Whoops, double post.

Anyways, racheted taxes are pretty popular in doing things like fuel taxes and the like out west.