The Other Team's Playbook
A Bush U-Turn On Climate Change?

By Sebastian Mallaby
Monday, January 15, 2007

George W. Bush has managed to isolate himself on Iraq: from world opinion, from domestic opinion and now finally from his own party. But just as Democrats have gained the upper hand on foreign policy, so Republicans have gained the upper hand on health policy. The parties are changing clothes faster than my 3-year-old changes princess dresses.

The health-care inversion is not all about Washington. Last week Arnold Schwarzenegger became the third Republican governor (following Jim Douglas of Vermont and Mitt Romney of Massachusetts) to announce a plan for universal health care; only one Democratic governor (John Baldacci of Maine) has matched that. Meanwhile in Congress, the Pelosicrats have voted to make the federal government negotiate Medicare drug prices, asserting that this will save money. This claim has been analyzed by the Congressional Budget Office and judged wrong. So on this issue, unusually, the Democrats are advocating a faith-based delusion while Republicans represent the reality-based community.

What other role reversals can we look forward to? The Bush administration is already more Wilsonian than Wilson's party, but that's an old piece of cross-dressing dating back to Reagan. Bush's first Treasury secretary complained loudly that foreign aid was money down the drain, but the president has since championed foreign assistance. Stretching just a little bit, Bush may slough off fiscal vandalism and emerge as the lesser of two budgetary evils. Consider: The Democrats have already slammed the door on Social Security reform and are now sorely tempted to propose congressional initiatives that aren't paid for.

But all this may be eclipsed. The grand prize for Nixon-to-China inversions will go to the administration if it tackles climate change.

A fantasy, you say? On Saturday I put the case for a carbon tax or a cap-and-trade system to James Connaughton, the head of the Council on Environmental Quality at the White House. Far from denouncing these policies as eco-socialist nonsense, Connaughton sounded open to them. "In concept I can agree with you," he said. Something must be done to stem demand for climate-warming energy, and although there are several ways of getting there, a carbon tax or cap-and-trade system would be the most "elegant."

Whoa! This may be spin, but it's certainly new spin. Only a few months ago, Al Hubbard, director of Bush's National Economic Council, brushed aside the idea of a carbon tax: "The American people are not interested in paying more for gasoline," he told me, sounding like a frog in the path of a herd of elephants who says he's not interested in jumping.

Next week we'll see whether Connaughton's reasonable-sounding views are reflected in Bush's State of the Union speech. The key thing to watch is whether Bush talks only about energy security or whether he emphasizes climate. Energy security is mostly a dumb objective, but climate policy is crucial.

It's true that the United States imports 60 percent of its petroleum, about double the share of two decades ago. But cutting U.S. oil imports won't insulate the nation from instability in petro-states. There is a global price for oil, and Americans will feel the hit from a terrorist attack in Saudi Arabia or a rebellion in Nigeria whether they fill their trucks with gas that's foreign or domestic. Equally, cutting U.S. oil imports won't really punish the bad guys in Iran or Venezuela. The United States has shut out Iranian oil imports since 1979, but Iran gets the global price for its crude, no matter whom it sells to.

A mistaken focus on energy security can undermine good policy on climate. If you just want to cut imports, switching cars to corn-based ethanol sounds great: The United States will get its fuel from the Midwest rather than the Middle East, a politically irresistible promise. But corn-based ethanol is only marginally better than gasoline in terms of greenhouse emissions. Federal subsidies for this technology would be better spent elsewhere -- for example on next-generation cellulosic ethanol.

The same is still more clearly true for oil shale and coal-to-oil technology. Both sources of fuel are abundant in the United States; both promise "energy security"; and both are disastrous from a climate perspective. Oil derived from coal puts about 75 percent more greenhouse gases into the air than plain oil, according to Richard Newell of Resources for the Future.

So it will be interesting to watch the administration's energy policy. Does it want to address climate change or merely the chimera of energy security? Is it ready to support the tripartisan cap-and-trade bill introduced last week by Sens. John McCain, Joe Lieberman and Barack Obama? But while you are watching the administration, keep a wary eye out for Democratic inversions, too. In a mistake he needs to disown fast, Obama recently co-sponsored a bill to subsidize coal-to-oil conversion.

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