Asymmetrical Information - Megan McArdle

01.17.13

Why Did Cap and Trade Fail?

Not because climate skeptics suddenly got double-extra effective at messaging

Theda Skopcol has written a lengthy post-mortem on the failure of cap-and-trade legislation aimed at reducing carbon emissions.  An interview with Brad Plumer captures the gist.  

In the course of this interview, Skopcol makes the following remarkable claim: "Climate-change denial had been an elite industry for a long time, but it finally penetrated down to conservative Republican identified voters around this time."  

As Reihan Salam points out, this is an implausible account of what happened. I'll add, a wildly implausible account of what happened.  I've been talking to conservatives about carbon taxes for years.  They were never indifferent, waiting only for John McCain to lead them to the proper view on policy.  They were always opposed.  They just didn't spend much time thinking about it, because who cares?  

Or as Reihan puts it,

A better way to think about this is that climate change was a low-salience issue until it was associated with the prospect of taxes on carbon-intensive energy, at which point the issue was politicized for the obvious reason that it became a live pocketbook issue. Skocpol’s mental model appears to be that in the absence of elite “climate-change denial,” to use her term, rank-and-file voters would have happily embraced steep taxes on carbon-intensive energy on the grounds that it might reduce U.S. carbon emissions even as it had no appreciable impact on, for example, Chinese or Indian emissions.

Consider the following graphs from Pew:  

Source: Pew Center

Belief in the reality of anthropogenic global warming dropped in the general population in 2009, not just Republicans; even staunch Democrats see a dip.  And then it begins to rise again as Cap and Trade recedes as an issue.  

What explains this?  Let me suggest an alternative theory to "brainwashing by elite climate skeptics": large cuts in carbon emissions will be very painful.    Barely 5% of the US population lives in the kind of neighborhood where a low-carbon lifestyle is even arguably desireable: dense, cheap-to-heat-and-air-condition attached housing with every major service, including solid public transportation options, within convenient walking distance.  

As Upton Sinclair once noted, "It is very difficult to get a man to understand something when his paycheck depends on his not understanding it."  Ditto his home value and his family budget.  Before Obama said he was serious about reducing emissions, belief in AGW was a symbolic belief with no personal cost.  Once that belief might actually result in legislation, people backed away.

I don't want to get into an argument about climate science here, so let's just assume arguendo that the skeptics are wrong, wrong, wrong.  It does not therefore follow that the public would have enthusiastically embraced cap and trade if not for those darned skeptics.  People do not like to make painful personal sacrifices for the sake of people who aren't born yet and mostly live in very far away places (that being who will bear most of the brunt of global warming).  

Personally, I'm pretty skeptical that enough Democrats would have embraced cap and trade, een if the president had put it before health care.  Democrats were willing to do a suicide charge on health care because they (incorrectly, so far) assumed that it would be much more popular after it was passed.  Only a lunatic could have thought that Cap and Trade would be more popular once it started taking chunks out of peoples' paychecks.  Especially in the middle of a brutal economic crisis.  

My take is that any sort of meaningful carbon legislation was DOA, probably even without the Great Recession.  That contra Skopcol, there was no set of political tactics, no coalition, that could have passed it in the face of these political realities.  Note that this doesn't make me happy: I continue to support substantial carbon taxes.  But I don't think we're going to get them.  This is the mother of all collective action problems, and in my rather dour opinion, it is very unlikely that we are going to find a demand-reduction mechanism to curb it.  If there's any hope, it is in technological advance on the supply side, not in austerity for the sake of one's great-great-great grandchildren.