WHETHER REPUBLICAN state leaders like it or not, the Environmental Protection Agency is going to require them to cut their states’ greenhouse-gas emissions. They can choose to do it the easy way or the hard way. One Virginia Republican is proposing they choose the easy way — and the smart way.
Starting next year, the EPA will demand that every state’s power sector meet specific emissions targets, with the goal of cutting the electricity industry’s national carbon footprint by 30 percent of 2005 levels by 2030. But states have flexibility about how they comply with the EPA’s mandate. They can choose traditional, command-and-control regulation that imposes changes on power plants, promotes renewables or cuts electricity waste. Or they can take a more efficient, market-based approach that would cost less money, require less hassle and raise revenue for the state. Del. Ronald A. Villanueva (R-Virginia Beach) has a bill that would do the latter.
The bill would have Virginia join the Regional Greenhouse Gas Initiative, a nine-state emissions-cutting pact that predated the EPA’s climate regulations. Participating states set an emissions cap that applies to all of them. Industries that want to emit greenhouse gases have to buy a permit to do so. Permits currently sell at around $5 for a ton of CO2 . The program encourages those who can cheaply cut back on their emissions to do so while allowing others to pay for the privilege of polluting and adjust their industries accordingly. Market forces drive change rather than the government making decisions for businesses and consumers. As with any market, the bigger the market for carbon permits is, the more efficiently it operates, making a regional scheme better than a similar state-based program.
In other words, putting an effective price on carbon dioxide across a large number of states is the conservative, market-based approach to climate change. Republicans in Virginia and every other state should be jumping to create or join carbon markets.
In some respects, the General Assembly might improve on Mr. Villanueva’s proposal; for example, it could decide how to spend the roughly $200 million a year Virginia’s government would get from carbon permit auctions. Mr. Villanueva would devote half to adapting Hampton Roads, a major population center and economic zone, to sea-level rise. The problem is acute there, partially because of melting ice sheets and partially because the land is sinking. Some of the area will probably have to be given up to the sea, while other parts will need flood-resistant retrofits. The rest of the money would go into energy efficiency improvements, economic development in coal country, and renewables.
We’d argue that the money should go into the state’s general fund, allowing Hampton Roads flood protection to compete with every other priority in the budget process. But that’s a quibble with what would be a major accomplishment, no matter how the money is spent: taking an EPA mandate and turning it into a market-based policy.