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Knocking Our Socks Off

January 18, 2007

Word is getting around that President Bush plans to announce a dramatic change of tack on energy policy in his January 23 State of the Union address.

The announcement, according to one White House official, will "knock your socks off."

Quite a buildup. If the reports are true, however, the change would be a refreshing shift by an administration that has had a troubling habit of letting ideological castles in the air trump hard facts on the ground.

So, what would it take for the new policy to cause socks to fly off feet across the land?

• An endorsement of substantially stronger motor fuel efficiency standards

• Continued updating of efficiency standards for appliances and motors as technology warrants

• An aggressive program to develop "plug-in" hybrid-electric vehicles that can both run for commuter-length distances on electricity and burn biofuels derived from cellulosic sources that don’t compete with food supplies

• A standard that diversifies electricity generating sources away from conventional coal

There have also been reports in the UK press that the administration plans a U-turn on climate policy. White House press secretary Tony Snow has denied that a move is afoot to endorse a cap on carbon dioxide emissions. But James Connaughton, who chairs the White House Council on Environmental Quality, has allowed that a "cap-and-trade" system, which would create a market in greenhouse gas emissions reductions, "might be a workable tool."

Tantalizing. What would really knock our socks off on climate policy would be for the president to endorse two things:

First, a policy to put a price on carbon emissions. The administration has spoken repeatedly about its support for advanced energy technologies as the answer to global warming.

Technologies and fuels that produce electricity, heat, and motor drive while emitting low or no carbon will be essential. But they won’t stand much of a chance against the incumbent fossil fuels unless the price of fossil fuels reflects the costs of loading the atmosphere with carbon. Markets that don't tell the truth about costs are not well functioning markets.

A price on carbon can be set in two general ways – directly through a tax on fossil fuels, or indirectly through a cap-and-trade system, such as the type that would be authorized by legislation re-introduced by Senator John McCain, R-Arizona, and co-sponsored, intriguingly, by another potential presidential candidate, Senator Barack Obama, D-Illinois.

Second, re-entering negotiations to adopt an international agreement succeeding the much-maligned Kyoto Protocol, which expires in 2012. While Kyoto has been a cause celebre among the green set since the treaty was produced in that Japanese city, it is only the first small bite out of a very large apple.

To achieve the emissions reductions necessary to stabilize atmospheric carbon levels at a point that doesn’t take undue risks with climate, a long-term agreement that cuts global emissions by two-thirds or more will be necessary. Such an agreement could not succeed without the participation of the big carbon emitters – led by the U.S., China and India. President Bush pulled the U.S. out of Kyoto, which doesn't require cuts of the latter two anyway.

We’ll see what transpires on January 23. For good luck, watch the president's speech while barefoot.