Obama’s efforts to combat climate change essentially came in the following three waves:
- As I noted yesterday, a portion of the stimulus bill was directed towards innovation in clean energy. Sensitive to the allegation that the administration was “picking winners,” Obama directed funds to a wide range of companies in the hope of improving his chances of success. Indeed, as expected, some of the funds were wasted, and he paid the price politically, but the cost of clean energy has come down significantly over the last eight years, and these investments are entitled to at least a small part of the credit.
- In an effort to placate the GOP, Obama proposed a cap-and-trade program in lieu of a carbon tax; after all, hadn’t McCain supported cap-and-trade? In the end, however, an alliance of Democrats from energy-producing states and Republicans killed cap-and-trade. Don’t expect either a carbon tax or cap-and-trade to be resurrected at the federal level in the foreseeable future unless the GOP-affiliated economists who support it in exchange for income tax cuts suddenly gain a lot more influence within the party.
- In the absence of carbon pricing legislation, Obama did what he could through regulation and international diplomacy. It will take some time, but most of these efforts can be overturned if Trump is determined to do so.
How much of the Obama legacy will endure? Probably less than we would like, but more than we think. The major polluters have made investment decisions that cannot easily be overturned, and they will probably view the current situation as a regulatory blip, given the state of the data and opinion in the rest of the world.