Conceptually, Biden has three tools with which to fight climate change: legislation, in the form of a carbon tax and amendments to the Clean Air Act; regulation, based on the existing version of the Clean Air Act; and subsidies. In reality, legislation is hopeless, due to the filibuster, and the Supreme Court can’t wait to invalidate his regulations. Subsidies, as a result, are the centerpiece of his climate strategy. Today, it appears that Joe Manchin, with the assistance of the entire Republican Party, has cut off that leg of the stool, too. Why?
While Manchin is undoubtedly motivated by both short-term financial and political interest, he purports to believe that the transition to a carbon-free economy should be deliberate, and driven by the private sector. He would undoubtedly argue that the decision of the various auto producers to move to electric vehicles over time is evidence that the government need not be involved. But is he right? Will the magic of the marketplace solve climate change?
No, for three reasons:
- There actually is a plausible market-based approach to climate change. However, it would require Manchin to vote for a carbon tax. Without a price on carbon, producers of carbon dioxide will simply continue to impose their costs on others, because, well, why wouldn’t they? As far as they’re concerned, deaths from weather events are just acceptable collateral damage.
- And then there is the chicken and egg problem, most obviously seen with electric vehicles. Relatively few people will buy them without a network of chargers in place due to range anxiety, but investors aren’t going to shell out the immense amount of money necessary to create the network until they know the electric vehicles will be on the road. The powers of inertia here, and the special interests supporting the status quo, are incredibly strong. Only the government, realistically speaking, has the resources to break the logjam and make it happen in a reasonable amount of time.
- The pace of change, left to the private sector, will be far too slow relative to the magnitude of the problem, and the speed with which it is getting worse. Without the resources of the federal government, the carbon-free economy will come too late to avoid the problems we are all dreading.
The bottom line is that, instead of investing a large amount of money in the short run to prevent climate change disasters, we are stumbling into having to pay far greater costs in the long run, in the form of ruined infrastructure, abandoned desert and coastal real estate, less fertile farmland, and unnecessary deaths from hurricanes, floods, and tornadoes. That’s stupid. But it is who and where we are today.