In praise of second best
A carbon price would be better, but Barack Obama's plan to cut emissions from power plants is welcome
NOTHING is too good for the United States Congress. The Capitol even has its own power station. The Capitol Power Plant in south-east Washington is still puffing away, though it was built in 1910—making it older than most museums of power—and even though it has not generated any electricity since 1951. It pipes steam and chilled water to heat or cool the nation's legislators, and in the process it pumps out over 100,000 tonnes of carbon dioxide a year. In 2000, when the administrator of the plant tried to switch it over from burning coal to natural gas to cut that pollution, senators from coal-producing states ganged up to stop him. The plant symbolises everything that is wrong with America's power sector and the policies that influence it.
So President Barack Obama's proposal on June 2nd to cut CO2 emissions from power plants is welcome. Power stations are the single biggest source of greenhouse-gas emissions in America, accounting for a third of the total. The plan to cut them by 30% from their 2005 level by 2030 is the biggest step an American president has taken to curb climate change for several decades.
The proposal matters for political reasons: several states which Democrats must win if they are to keep control of the Senate are also coal producers, where anything that hurts miners is unpopular. So the plan probably increases the chance that Republicans will recapture the upper chamber of Congress in November. It also matters because of an international timetable: countries are negotiating a treaty to reduce greenhouse-gas emissions globally which can be signed at the end of 2015. The president's proposal makes it more likely that some such deal will see the light of day.
Because of these implications, the plan has been greeted in America with wild partisanship. The left welcomes it as a decisive step away from fossil fuels. The right condemns it as a new tax on American companies and consumers which will only help China, where pollution will rise further, negating any benefit to the climate. Both views are exaggerated. The truth is that the proposal won't save the planet, but it will bring about small improvements that are worth having.
Assuming the plan is carried out, it would reduce total American carbon emissions by around 5%. That is a lot for one measure, though tiny compared with the overall cuts required to rein in climate change. American power plants have already reduced their emissions by 15% since 2005, so requiring them to cut the same amount over a longer period is not too arduous. The plan will raise electricity prices and kill some jobs, but it will also save lives, most immediately by cutting particulate pollution.
It is far from the best policy. Ideally, Congress would have passed a carbon tax or created a carbon market, putting a price on emissions and letting buyers and sellers decide on the cheapest way to reduce them. Instead, the government is telling a particular sector how much to cut and when—and then adding layers of complexity by allowing different states different ceilings. As a method of dealing with a problem, this has all the attractions of a blackout in a blizzard.
But it became inevitable once Congress rejected a better approach—cap-and-trade legislation—during Mr Obama's first term. The current approach is at least better than nothing, the most likely alternative. In climate policy, delay is rarely good. The more carbon is in the atmosphere, the more expensive it is to cut back and the more damage it does in the meantime. Anyway, Mr Obama's command-and-control approach does not forestall setting up a carbon market later.
The second-best approach is dearer but not dramatically worse than the best would have been. Power plants and electricity consumers would bear the main burden either way. And the plan's benefits (over $50 billion according to the administration, mostly from improving people's health) still outweigh its costs. One hitch is that the costs are all incurred in America whereas many of the benefits are spread round the world.
In short, the proposal is a net gain as it stands—but the international response could make its benefits bigger. China's government is mulling over a national cap on carbon emissions, which would mean it is going further than Mr Obama. The regime in Beijing will, and should, impose such a cap in its national self-interest. But China's leaders like diplomatic cover. If Mr Obama's new rules help cajole the world's largest polluter to do more to cut emissions, then second-best would be much better than nothing.