The Planet Is Burning and Neoliberalism Is Not the Answer

Why market-based solutions like cap-and-trade aren’t progressive.

Scott Edwards January 24, 2018

An oil refinery is silhouetted by the setting sun on August 9, 2006 in Milford Haven, Wales. (Photo by Scott Barbour/Getty Images)

With the Repub­li­can Par­ty in full con­trol of the fed­er­al gov­ern­ment, much of the ener­gy of the anti-Trump resis­tance has shift­ed to the state lev­el, espe­cial­ly in places where Democ­rats hold con­sid­er­able pow­er. But when it comes to cli­mate and ener­gy poli­cies, we must resist the temp­ta­tion to embrace half-mea­sures and failed mar­ket schemes. Unfor­tu­nate­ly, these false cli­mate solu­tions are being pro­mot­ed from lib­er­al strong­holds from Ore­gon to Wash­ing­ton to Vir­ginia to New Jer­sey, where new Demo­c­ra­t­ic gov­er­nors are being pushed to sign on to cap-and-trade cli­mate incrementalism.

Unleashing the force of the marketplace will do nothing to lessen the force of the storms now pounding our coastlines, nor will it extinguish the wildfires destroying large swaths of California.

This mis­guid­ed approach stems from a long­stand­ing polit­i­cal ide­ol­o­gy. Neolib­er­al­ism is the destruc­tive dog­ma embraced by both polit­i­cal par­ties for about 40 years that pri­va­ti­za­tion, dereg­u­la­tion and com­pe­ti­tion can fix the world’s many prob­lems. The poli­cies that emerged from this creed have inflict­ed a heavy toll on soci­ety, from the 2007 mort­gage melt­down and reces­sion to grow­ing income inequal­i­ty and—accord­ing to some—the elec­tion of Trump. So, it is trou­bling to find, in the after­math of storms Hen­ry, Irma, Jose and Maria, that cli­mate pro­gres­sives” are adher­ing to the neolib­er­al agen­da by propos­ing vary­ing forms of mar­ket-based pric­ing schemes, like car­bon cap-and-trade and tax­es, as the way to address the biggest threat to life on earth.

Neolib­er­al­ism places the bur­den of rem­e­dy­ing our trou­bles square­ly on con­sumers, premised on the prin­ci­ple that mar­ket com­pe­ti­tion will cre­ate shifts in demand and — con­se­quent­ly — pro­duc­tion and con­sump­tion. In the cli­mate con­text, pric­ing pro­po­nents believe that we can reduce fos­sil fuel use with a sim­ple mar­ket adjust­ment: a price on car­bon to ade­quate­ly rep­re­sent the eco­log­i­cal costs of its use. Such a price, the the­o­ry goes, would make using fos­sil fuels pro­hib­i­tive­ly expen­sive, thus allow­ing renew­able ener­gy sources to bet­ter com­pete with oil, gas and coal. Con­se­quent­ly, our plan­et would be saved through the mag­ic of the marketplace.

These pric­ing schemes start­ed out as any­thing but pro­gres­sive. Cap-and-trade is an anti-reg­u­la­to­ry approach to pol­lu­tion con­trol that was boost­ed by Boy­den Gray, an indus­try lawyer who served as coun­sel to George H.W. Bush. Gray worked with the Envi­ron­men­tal Defense Fund to amend the Clean Air Act of 1990 to allow for the trad­ing of pol­lu­tion cred­its under the Acid Rain pro­gram as an alter­na­tive to strict emis­sion con­trol lim­its. Sim­i­lar­ly, Exxon­Mo­bil was one of the ear­li­est lead­ers behind car­bon tax­es back in 2009. Rex Tiller­son, then CEO, knew he could eas­i­ly manip­u­late these kinds of mar­ket schemes to avoid hav­ing to cut pro­duc­tion. His com­pa­ny would con­tin­ue to prof­it rich­ly from the extrac­tion and sale of fos­sil fuels for decades to come, while con­sumers were forced to pay increased oil and gas prices.

If indus­try endorse­ment isn’t enough of a red flag for cli­mate pro­gres­sives, then the dis­mal track record of pric­ing approach­es should be. While mar­ket pro­po­nents her­ald the Acid Rain Pro­gram as a suc­cess, it only achieved rough­ly half of the reduc­tions of non-mar­ket reg­u­la­to­ry pro­grams that were in place at the same time in the Europe Union and Japan, accord­ing to a com­par­a­tive study released in 2004. And it’s high­ly ques­tion­able how many of these reduc­tions had any­thing to do with the cap-and-trade sys­tem itself, as not­ed in an analy­sis pro­duced by Food and Water Watch — the orga­ni­za­tion I work for.

Sub­se­quent cli­mate cap-and-trade pro­grams — the Euro­pean Union and Cal­i­for­nia pro­grams — have been absolute fail­ures fraught with fraud, mar­ket manip­u­la­tion and envi­ron­men­tal injus­tice. A study released in 2016 on the Cal­i­for­nia plan found that many of the cov­ered indus­try sec­tors are using the pur­chase of cred­its to increase emis­sions of pol­lu­tion in front­line com­mu­ni­ties of col­or. Yet that sys­temic racism didn’t stop main­stream envi­ron­men­tal groups in Cal­i­for­nia from advo­cat­ing to renew the pro­gram in 2017

Car­bon tax pro­grams have, like­wise, failed as a cli­mate strat­e­gy. The British Colum­bia tax plan imple­ment­ed in 2008, held out by many tax pro­mot­ers as a mod­el for the Unit­ed States, actu­al­ly result­ed in increased car­bon emis­sions, while con­sumers with few ener­gy options had to pay the increased costs to dri­ve their cars to work and heat their homes. Tax­ing con­sumers for their forced depen­dence on fos­sil fuels is not only inef­fec­tive, but high­ly regres­sive and inequitable, as strug­gling fam­i­lies expe­ri­ence dis­pro­por­tion­ate finan­cial strains to meet increased ener­gy costs. With Trump sign­ing into effect a new fed­er­al tax scam designed to shift even more of the finan­cial respon­si­bil­i­ty off of the rich and onto work­ing- and mid­dle-class Amer­i­cans, an inef­fec­tive but puni­tive car­bon tax becomes even more troubling.

It’s not like we don’t know how to deal with pol­lu­tion. Back in the 1970s, when faced with oth­er envi­ron­men­tal crises, Con­gress passed a series of laws that placed firm air and water emis­sions lim­its on indus­tries for many pol­lu­tants, rec­og­niz­ing that eco­nom­ic effi­cien­cy shouldn’t take pri­or­i­ty over human and envi­ron­men­tal health and safe­ty. That swift action result­ed in clean­er water and air across the coun­ty. Yet now, neolib­er­al­ism has tak­en such an entrenched hold, even pro­gres­sives” are clam­or­ing to imple­ment inef­fec­tive and harm­ful pric­ing approach­es that bur­den con­sumers instead of sim­ply man­dat­ing car­bon emis­sions reduc­tions for all emit­ters and imple­ment­ing a just tran­si­tion to a clean ener­gy economy.

Many pro­gres­sives right­ly cel­e­brat­ed the rejec­tion of the dis­crim­i­na­to­ry and inequitable Trump poli­cies with the 2017 elec­tions, where the Repub­li­can agen­da was sound­ly defeat­ed across the coun­try. But just days after a Demo­c­ra­t­ic land­slide in Vir­ginia, the state announced its plan to unveil a car­bon cap-and-trade pro­gram that, like the Cal­i­for­nia sys­tem, will allow pol­luters to sim­ply buy their way out of decreas­ing emis­sions. If des­per­ate­ly dust­ing off right-wing, indus­try-pro­mot­ed solu­tions to pol­lu­tion con­trol is the best we can do after the kind of pro­gres­sive polit­i­cal shift we wit­nessed in Vir­ginia, then this plan­et is tru­ly doomed to suf­fer the worst impacts of our cli­mate travesty.

Unleash­ing the force of the mar­ket­place will do noth­ing to lessen the force of the storms now pound­ing our coast­lines, nor will it extin­guish the wild­fires destroy­ing large swaths of Cal­i­for­nia. Pol­lu­tion pric­ing isn’t pro­gres­sive; it’s a regres­sive, con­ser­v­a­tive approach that will deliv­er the same out­comes that oth­er neolib­er­al approach­es have: deep­er inequity and sus­tained cor­po­rate con­trol. It is time to stand up and reject these pric­ing schemes and demand cli­mate change poli­cies that are actu­al­ly going to pro­mote jus­tice and save the plan­et, not leave us scram­bling to sur­vive the com­ing decades.

Scott Edwards is an envi­ron­men­tal attor­ney and co-direc­tor of the cli­mate and ener­gy pro­gram at Food & Water Watch and its legal advo­ca­cy arm, Food & Water Justice.
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