When it comes to cap-and-trade, give federalism a chance

Supporters of cap-and-trade often make bold claims about climate change legislation.  Rapturous-sounding rhetoric such as “this legislation will create jobs by the millions, save money by the billions and unleash investment in clean energy by the trillions,” is common in the cap-and-trade debate.  Indeed, proponents typically describe cap-and-trade as the equivalent of a giant magic job Pez dispenser.

I am convinced they are wrong.  Cap-and-trade legislation will only cap our economy and trade American jobs overseas.  There are many devastating analyses of the costs and effectiveness of cap-and-trade legislation.  Let me share just one.

The Danish academic and author, Bjorn Lomborg, has found that even if the entire industrialized world enacted U.S. style cap and trade legislation, world temperatures would drop by only 0.22 degrees by 2100.  Meanwhile, Jim Manzi, a senior fellow at the Manhattan Institute calculates the “expected costs” of cap-and-trade to the American people are “at least 10 times the expected benefits.”  President Obama himself acknowledged that, “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.”

In other words, cap-and-trade will raise the price of gasoline, electricity, food, and just about everything else, destroy millions of jobs, prolong the recession, and all that for just 0.22 degrees temperature reduction by 2100!  If the banker phoned in with this offer, like most Americans, I would respond, “No deal.”

I recognize there are many who do not reach the same policy conclusions I do.  In fact, there are a good number of individuals who believe that intentionally increasing energy costs during a recession is necessary.  They are genuinely convinced that imposing a complicated web of new federal mandates and “green” regulations will lead to an economic renaissance.

Despite their sincerity, neither I, nor my constituents, desire to partake in their risky theories.

Fortunately, there is a political solution that enables both sides in this debate to get what we want.  Instead of imposing a top-down carbon-focused reorganization of our $14 trillion economy on a divided public, I’m willing to let cap-and-traders reap all the “benefits” of climate change legislation–all the jobs and economic prosperity they are so confident it will bring about.  States eager to impose carbon caps should be allowed to do so.

All I ask is that proponents not impose cap and trade on states choosing to address climate change in a different fashion.

There are regions of this country where cap-and-trade policies may be popular.  Some people residing in the Northeast, urban areas, and certain coastal regions appear to support cap-and-trade policies.  At least the Congressional representatives in these areas seem eager to implement strict carbon regimes on their citizens.

Again, I say–let them. Then let’s wait a few years and see what happens.

My proposal invokes one of the most important, and sadly, most forgotten of the political insights of the Founders, the concept of federalism. Federalism is based on the simple premise that not all policy solutions must come from Washington. It empowers states to attempt innovative policy without subjecting unwilling participants to mandates they oppose. It allows the country as a whole to learn from policy experimentation and leaves states free to implement their own policy solutions when a national consensus is lacking.

State policy experimentation is not a new or untested idea.  Today there are more than 200 compacts that allow groups of states to cooperate on environmental, economic, transportation and other problems.  In fact, there was a time when the states were routinely viewed as “laboratories of democracy.”   The Supreme Court Justice Louis Brandeis once wrote “It is one of the happy incidents of the federal system that a single courageous State may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country.”

If cap-and-trade is the Shangri-La supporters think it will be, let it be proven and other states will follow.  Likewise, if it doesn’t work, other states can learn from its failure and avoid the same mistakes.  I was delighted this week to see that California’s Gov. Schwarzenegger has grasped this important insight.  As they say, more power to them.

It’s time those of us in Washington realized that the United States is a diverse, vibrant nation with varying demographics, needs, and concerns.  Congress does not have to send to the President a one-size-fits-all bill mandating a nationwide cap-and-trade regime.  With cap-and-trade legislation, as in many other policy areas, we should give federalism a chance.

Congressman Rob Bishop (UT-01) is the Chairman of the Congressional Western Caucus.