THE VINE NOVEMBER 20, 2008
Democrats aren't squandering any time getting the ball rolling on new energy legislation. Yesterday, Rahm Emanuel told a gathering of business leaders that an economic stimulus package heavy on "green infrastructure" would be Obama's first priority after he's sworn in:
Mr. Emanuel promised that a major economic stimulus would be "the first order of business" for Mr. Obama when he takes office Jan. 20. The focus of spending will be on infrastructure, specifically "green infrastructure," which he said would include mass transit, upgraded electricity transmission lines, "smart" electrical meters that allow consumers to save money by using electricity at off-peak hours, and universal broadband Internet access, which he said would encourage telecommuting.
Only one quibble: Does anyone believe that universal broadband access will actually encourage telecommuting? I would've guessed that those workers most ripe for telecommuting already have broadband access. All those measures are smart investments, though, and, for the most part, will pay for themselves over time. (We've hashed out the need for better transmissions lines ad nauseum by now.) Meanwhile, Barbara Boxer, who chairs the Environment and Public Works Committee in the Senate, held a press conference on the Hill to announce that she would introduce two major climate bills at the start of the next congressional session:
The first bill will establish a grant program to reduce global warming emissions under the Clean Air Act with up to $15 billion a year available to spur innovations in clean energy, including advanced biofuels. This will be an economic stimulus and follows President-elect Obama’s recommendation. ...
The second piece of legislation will direct the Environmental Protection Agency to set up a cap and trade system for greenhouse gases that meets the goals laid out by the President elect. This bill will reflect the strong partnership we will have with the new Administration, and will focus on achieving the emissions reductions needed while restoring the economy. It will be a streamlined bill, which will amend the Clean Air Act.
It's hardly new that Boxer's going to follow Obama's lead, but it is eyebrow-raising to see this talk about drafting a "streamlined" cap-and-trade bill. That's essentially what Jeff Bingaman advised when I heard him discuss the Senate's energy priorities on Monday. Basically, the Lieberman-Warner cap-and-trade bill that Boxer tried—and failed—to shepherd through the Senate this summer was a monstrosity, with its complex allocation formulas and vast smorgasbord of handouts to placate a dizzying array of constituencies and interests. That's partly why the thing crashed and burned so spectacularly. Now, Boxer's office isn't revealing details just yet, but she promises that the new bill wil be "much simpler." Maybe it'll just refund all the revenue raised by auctioning off pollution permits back to consumers, or else kick decisions about how to spend the revenue down the road. We'll see.
Update: Huh, maybe I was too quick to be skeptical of broadband. Here's a recent econ paper by Moohoun Song, Peter Orazem, and Rajesh Singh offering evidence that better broadband access actually can increase the likelihood that workers will telecommute. I stand corrected.