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Dingell defends his poison pill plan in a confusing, misleading op-ed

By Joe Romm on August 2, 2007 at 11:31 am

"Dingell defends his poison pill plan in a confusing, misleading op-ed"

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John Dingell (D-MI) has written a very bizarre defense of his poison pill plan in, “The Power in the Carbon Tax.”

Let’s start with how the chair of the House Energy and Commerce Committee brazenly rewrites history to make his dubious case:

History shows that we respond to market forces. Between 1980 and 1981, the fuel economy of the vehicles Americans purchased increased 16 percent. That wasn’t because of a technological breakthrough or a regulatory requirement. It was because the price of gas had risen to the point where consumers made fuel economy a priority. Market forces and mechanisms proved far more powerful than mandates.

Uhh, not really. Rising prices may have sped up the rise in corporate average fuel-economy (CAFE) by a year or so, but that rise in CAFE had already been mandated by Congress with the CAFE standard. The figure shows what happened:

cafe-history.png

Dingell has cleverly cherry-picked the data from a one-year time period (1980-1981). Why did CAFE keep going up when gasoline prices collapsed? The law required it. By Dingell’s logic that only price matters, CAFE legislation saved the country from a collapse in fuel economy.

But in fact recent evidence makes clear price is not the driving force behind U.S. fuel economy. From 2002 to 2006, gasoline prices shot up more than a dollar a gallon, just as they did right before 1980 — but fuel economy has hardly budged. The lesson from history is clear: If you want a significant and permanent rise in fuel economy, you need tougher mandates. Nothing in the historical record suggests that a 50 cent a gallon gasoline tax would have a major impact on fuel economy — but it sure as heck would be politically unpopular.

The rest of Dingell’s op-ed is equally confused and misleading:

I apparently created a mini-storm last month when I observed publicly for at least the sixth time since February that some form of carbon emissions fee or tax (including a gasoline tax) would be the most effective way to curb carbon emissions and make alternatives economically viable. I said, as I have on many occasions, that we would have to go to some kind of cap-and-trade system for carbon emissions….

This Congress may be able to enact a cap-and-trade system, and other policies to address climate change, only without a carbon fee. Ultimately, though, we’re going to have to be more ambitious.

Uhh, what? He seems to be saying we need both a cap-and-trade and a carbon tax, that a cap-and-trade without a carbon fee is not ambitious enough. That is very confusing. A cap-and-trade will create a price for carbon. Why would you need both — unless of course you really want a gasoline tax to kill the whole deal politically?

And, in fact, more than his call for higher taxes, what created the mini-storm was Dingell revealing that the taxes were a poison pill. As one article noted at the time:

Rep. John Dingell (D-Mich.) intends to propose major taxes on gasoline and industrial carbon dioxide emissions in an attempt to show Americans would reject paying high costs to curb greenhouse gas emissions.

Dingell said, “I sincerely doubt that the American people are willing to pay what this is really going to cost them.” And he intends to slam the public with high taxes to prove his case.

One final small point. Dingell writes:

Each source of energy faces obstacles. For example, wind and nuclear power present “not in my back yard” challenges, as we’re seeing with efforts to install a wind farm off Cape Cod, Mass….

Uhh, again, not really. Yes, in a few places windpower meets local objection, but in general wind power has been soaring in recent years. The American Wind Energy Association (AWEA) estimates that, after installing over 2,400 megawatts (MW) in 2006 [and also in 2005], the industry will install over 3,000 MW in 2007.” So wind is doing a tad better than nuclear power, which has not had a single new plant commissioned in three decades.

As for the best climate policy. What we most need is, first, a cap-and-trade with teeth and, second, new CAFE regulations with teeth (the Senate bill being a good start). We don’t need poison pills like gasoline taxes.

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2 Responses to Dingell defends his poison pill plan in a confusing, misleading op-ed

  1. Earl Killian says:

    It is also not clear that the regulatory systems need to cost Americans anything, on average. “Cap-and-trade” is a confusing term. There are at least three more precise terms that should obsolete it according to the GRIST article cited below: cap-and-grandfather, cap-and-auction, and cap-and-allocate. If the US implements cap-and-auction, and then returns the auction proceeds to the people (e.g. simply divide the proceeds equally by all residents) then the system is revenue-neutral to the government, and the average payment by individuals is zero. Of course, those who use more than the average have a net outlay, and those who use less have net income. In that way it is direct efficiency incentive. Of course, people would have extra expenses or savings independent of the auction fees, because at first prices would rise beyond the cost of the auction fees (as in any quota system), but efficiency improvements would then offset this. E.g. Californians pay 50% more per kWh than many other states, but they use 44% less kWh, so their bills are about the same (and the planet benefits).

    http://gristmill.grist.org/story/2007/5/18/142149/148

  2. Delores says:

    There is obviously a lot to know about this. I think you made some good points in Features also.