Backlash From House Climate Bill is Driving Senate Delays

In 1976 in the movie "Network," Peter Finch opened his window and shouted: "I'm as mad as hell and I'm not going to take this anymore." Now, over 30 years later the American public -- fed up with reckless government spending and unnecessarily burdensome regulations -- is beginning to echo Mr. Finch's sentiment.

We didn't reach this point overnight. First, Washington handed out $2 trillion for bailouts and a so-called stimulus -- both of which were loaded with political pork and special earmarks. As more and more Americans became aware of this excess, many voters organized "tea party" rallies to publicly voice their opposition to the surge in government spending and the resulting higher taxes.

Similar expressions of public discontent with government wastefulness are still taking place. And now the backlash is spreading across party lines.

As the Senate considers a $1 trillion takeover of the health care system, a growing number of Democrats (including freshman lawmakers, Blue Dogs, and representatives from Rust Belt states) are starting to voice their opposition, too. But unlike the Republican outcry, the stimulus didn't trigger this trend. Rather, it began with the climate bill.

Last month, the House of Representatives passed legislation to impose a cap-and-trade system -- an emissions policy that would line the pockets of special interests at the expense of U.S. consumers.

Given the projected financial burden of this bill, House members were inundated with calls of opposition from their constituents. Democratic Rep. Eric Massa of New York, for instance, reported that in the week leading up to the vote his offices received hundreds of calls, and 19 out of every 20 urged him to vote "no."

Both economic and environmental interests explain this overwhelming resistance to a national cap-and-trade system.

From a fiscal standpoint, voters understood that the proposed carbon market and its accompanying regulations would cost them hundreds of billions of dollars while doing little to affect the Earth's temperature or climate. The net loss of 2.5 million jobs, as tallied by one study, likely generated great concern for families already struggling in the current economic climate -- particularly the 6.5 million workers who have lost their job since the recession started in December 2007.

Essentially, the House bill would reward Wall Street and favored industries at the expense of Main Street. And Main Street wasn't happy about that.

On top of that, there's significant environmental opposition to this legislation. In order to drastically reduce the growth in global greenhouse gas emissions, we need to incentivize every level of the economy to promote greater energy-efficiency -- a move that would stimulate billions of dollars in investment in new energy R&D.

However, cap-and-trade is too volatile, complex, and susceptible to manipulation to sustain the needed investment milieu. Because of these inherent problems, even "green" groups like Friends of the Earth and Greenpeace came out against the bill.

It's simply at odds with our self-interest.

By imposing arbitrary caps on carbon emissions from traditional energy sources, a cap-and-trade system would drive up fuel and electricity prices. The bill's national building code would drastically increase the price of new construction, making homeownership a pipe dream for millions of working-class Americans.

Just to meet the emissions cap set for 2020, we would have to achieve the equivalent of doubling the fuel efficiency of every car on the road or building more than 100 new nuclear power plants.

The common sense and good judgment of the American people tell them that this policy is both counterintuitive and unrealistic.

The backlash we're witnessing from the House vote calls to mind a 1787 letter in which Thomas Jefferson reminded James Madison that "a little rebellion now and then is a good thing and as necessary in the political world as storms in the physical world."

Today, congressmen who voted for the bill are experiencing that necessary rebellion in their districts. Case in point: When asked at a town hall meeting if he believed the majority of citizens would vote for the cap-and-trade bill if it were put to a public vote, Rep. Harry Teague (D-N.M.) mistakenly answered, "I believe they would." The crowd responded with a resounding "NO!"

And lawmakers can expect the public to continue saying "no" until Washington gets this right.

Americans are concerned about the fate of our planet and, naturally, support taking steps to limit the growth of greenhouse gases. Still, they expect those actions to make sense economically and technologically.

So over the course of the summer recess, senators should listen to the growing roar coming from citizens on both sides of the political aisle and then take a fresh look at the climate policy options open to them. If they do, they will have to conclude that cap-and-trade is a very poor choice.

The experience of the European Union is further evidence that a carbon market misses the market on "green" goals and still manages to hit households with a hefty price.

There are better options on the table.

As a result of legislative actions taken over the past four years, the Energy Information Administration has steadily reduced its projection of carbon levels in 2030. And Washington should continue to build on those existing actions.

The overwhelming body of economic analysis has demonstrated that a simple carbon tax is superior, perhaps as much as five times as superior, to any cap-and-trade system. Plus, its cost to the public can be offset by recycling the revenue to lower another tax, such as the payroll tax.

Given the chance to learn a lesson from the House's mistake, the Senate will have a chance in September to implement a course correction on U.S. climate policy and perhaps defend its distinction as the world's greatest deliberative body.

William O'Keefe, chief executive officer of the George C. Marshall Institute in Washington, is president of Solutions Consulting Inc. The institute's Web site is www.marshall.org.