Breakthrough Generation

Debate on Lieberman-Warner—the “Climate Security Act” which emphasizes curbing carbon emissions using cap and trade but pours pitifully small amounts of money into clean energy—began this week on the floor of the Senate. Even if it does nothing else, the legislation draws attention to the unequivocal connection between our free market and our carbon emissions. It is worth understanding the connection to bring us to an understanding of how to overcome ecological crisis.

It’s high time we examine our assumptions about the politics of and surrounding market capitalism and how it affects climate change action. The typical liberal view is pretty much one of market-dirtiness—the market is a naturally greed-oriented, self-oriented and corrupting institution. In the minds of these leftists, the public sector exists to help the public, and the private sector exists to help themselves. Liberals then take this view to one of two places: the first is a socialist tendency to want to control as much of the market as possible, expanding the public sector and shrinking the private. The other place liberals go is to ignore the market, wash their hands of its dirtiness and condemn it as irredeemable.

Typical conservatives view the market as, in Francis Fukuyama words, “the end of history.” A market economy in an open society is the end goal of all history, and as the United States has reached this point, our job is to simply keep our market lightly regulated and impose only enough taxes to maintain government efficiency and ensure a basic (read: minimal) social safety net.

Let’s turn now to climate change. We face a crisis of ecology and economy, and what has been proposed as America’s response to global warming? The unambiguously conservative answer of more market. Cap and trade, the talk of the day, is essentially a market-purity enthusiasts answer to carbon emissions reduction—put a price on carbon emissions, make it gradually more expensive over time and let the market take its course. As businesses find it increasingly more difficult and less cost-effective to pay for the CO2 they put in the air, they will turn to cleaner energy sources.

It is interesting, then, the way the chips have fallen for Senate Democrats and Republicans debating Lieberman-Warner, a bill that is decidedly right-shifted. The Democrats, seeing climate change as a pollution/environmental problem that they must solve, support most any pro-market cap and trade legislation. Republicans, seeing an opportunity to again represent themselves as the party that cares about middle American pocket books, have come out against Lieberman-Warner, citing the higher prices in energy every American will have to pay as reason enough to do nothing. Even the pro-market answer is too hands-on for Republicans.

The real paradox here is that liberals and environmentalists, typically the proponents of socializing the market and expanding the public sector, have adopted the language and outlooks of market fundamentalists in their desperation to believe that cap and trade will help solve the climate crisis. How odd, that the very objectors to pure-market politics have turned to the sanctity of the free market to solve our woes.

It’s time for both a new approach to the politics of market capitalism: the market as a means of history, not an end of history. The market is a colossal institution, the focus and motivation of businesses, interest groups and lives everywhere. The market could be a massive apparatus to be employed in the pursuit of energy equity and expansive sustainable prosperity. To do this, the government needs to become more active, not in regulation, but in innovation. The government could so easily harness the market and direct our money towards bold and promising ventures.

The best thing for our country, and for the world, at this juncture in human history, is to begin the transition to a clean energy economy. This will take huge investments in clean energy technology and implementation, on the magnitude that it took to bring us to the moon in the 1960s or bring our railroads across the country from coast to coast in the 1860s, both cooperative ventures of public private business. As has been clearly documented, private capital follows public capital, and private investment follows public investment. Just as the Apollo program and the transcontinental railroad achieved their goals due to a mixture of funding from the government and private business, so can the transition to a clean energy economy. If our government turns its eye to and opens its checkbook for clean energy, so will the private sector. I think the past has shown that together, they can achieve at the highest levels of our goals.

There is so much potential, and yet our debate is still stuck discussing which type of mitigation will best suit business interests at little cost to the public. All this, when just last week the New York Times reported about the Copenhagen Consensus, the coming together of nine leading market economists who did a cost-benefit analysis of 30 proposals that would help confront ten global challenges facing humanity today. R&D in low carbon energy technology came in halfway down the list, but was still found to be more cost-beneficial than R&D coupled with mitigation (any attempt to curb carbon emissions) or solely mitigation, the two proposals that finished dead last.