Advancing in Another Direction

Well, last night President Obama gave his first Oval Office address to the nation. The topic: the oil spill and America's long-term energy (and climate) policy. To say the least, the coverage for his speech has not been great. The Huffington Post called it a "junk shot," and Kate Sheppard lamented that Obama "only uttered the word 'climate' once" while scolding the President for not detailing his Gulf "battle plan" or demanding specific reparations from BP. Ezra Klein wrote that the president "shied away from clearly describing the problem, did not endorse specific legislation, did not set benchmarks, and chose poll-tested language that might persuade skeptics."

So, following a speech which many (myself included) had hoped would mark the political turning point in America's addiction to oil, we have three main criticisms:

1. Not enough climate rhetoric.
2. Not enough specifics in the "make BP pay" rhetoric.
3. Overly broad, glossy language that failed to amount to any kind of strategy.

On the second point: AP is reporting that BP, in a meeting with President Obama, has agreed to finance a $20 billion fund to pay claims of people whose lives and livelihoods have been damaged by the Gulf spill. This far exceeds the $75 million liability cap established by the 1990 law, so it's a start. Raising the cap, or eliminating one altogether, could be an important next step, but this is good news.

On the first point: a failure to mention cap-and-trade or a price on carbon anywhere in his speech has led many to the conclusion that cap-and-trade is dead (where have we heard that before?). Many will say that Obama is retreating on a climate policy he once endorsed, if unenthusiastically. But as the saying goes, I believe he's advancing in another direction. Perhaps the President, having observed the Gulf Spill has his top priority for two months, has come to acknowledge what Senator Kerry said just this past week: there aren't sixty votes for his APA bill, or any energy bill currently on the table. It seems to me that the President has picked cap-and-trade as a loser, and will not pursue it any further. That does not mean, however, that he's given up on an effective energy policy. Notably, the carbon price established in APA would do little to advance clean energy solutions that we desperately need. As Teryn Norris and Jesse Jenkins described in their analysis of APA, "this program is unlikely to result in significant deployment levels, particularly in the near-term, due to the cost containment mechanisms that will keep carbon prices relatively modest, as well as the persistence of many non-price-related barriers to clean energy adoption" (pdf).

Basically, the politically possible version of cap-and-trade was never that effective anyway, so retreating from it as a policy mechanism may not only be good politics, but good leadership. The question remains, however, of what will take its place. I have advocated for effective and comprehensive technology and competitiveness policy, which could garner bipartisan support in Congress and the approval of the American public. Unfortunately, this is where President Obama did disappoint me last night. As the third criticism I outlined above observes, his speech did not provide any specific strategy for fixing America's energy policy.

Many are upset at the President's tacit retreat on cap-and-trade. I'm upset because he doesn't seem to know which direction to advance in now.