by Ryan Avent
Brad Plumer reports today from a green jobs conference at which Michigan Senator Debbie Stabenow spoke. Plumer notes that Stabenow previously said she would not have supported the Lieberman-Warner climate bill, which included a cap-and-trade plan, “for fear that it would wipe out jobs in the Rust Belt.” Today, Plumer says, she was saying that the Rust Belt could be a hub of green technology manufacturing, but that America fell behind European economies on this count because, “our policy framework for promoting renewable power was so skimpy.”
The problem, of course, is that a carbon pricing plan in America — like cap-and-trade – would generate an enormous market for green technologies. Indeed, it’s difficult to imagine green industries succeeding on a large scale without such a plan. But Michigan, and the Rust Belt in general, is still home to lots of (for lack of a better work) brown industries, which contribute heavily to elected leaders and fight green legislation with everything they have. (In the case of the automakers, “everything they have” includes “taxpayer dollars.”) So you get this situation where policies that might create manufacturing jobs in Michigan are opposed by Michigan leaders working on behalf of dying Michigan industries. This is one of the risks of propping up those industries with billion dollar bail-outs; they stick around to lobby against policies we need.
As Plumer notes, Stabenow and other Midwestern leaders will likely attempt to square the circle by arguing that the main course of carbon pricing be served with a heaping helping of public funding for green industries. That’s not necessarily a bad thing. It’s very difficult to give too much money to things like research and education. Green infrastructure investments, in things like smart grids, communications systems, and high-speed freight and passenger rail would also be worthwhile and would help increase the productivity and the competitiveness of manufacturing states. But Stabenow and her colleagues are likely to want more — subsidies for specific technologies, tax breaks for specific companies, and trade protections for infant green industries.
There will be a limited economic case for policies like that, but if adopted en masse, they’re likely to wind up costing taxpayers a great deal of money and producing little bang for the buck. Some progressives argued, during the debate over the automaker bail-out, that we should give Detroit money to make transit vehicles. That sounds fantastic, but Detroit isn’t even that great at making cars, while European companies are very good at making transit vehicles. Most of America might well benefit from just using perfectly fine European transit technology, and focusing production on other products for which Europe and Asia don’t have as big an advantage. But that’s not how technology-specific government assistance tends to be distributed.
So we have legislators that will largely have a stranglehold on American climate policy, but who also have home state interests that might not serve most of America very well at all. The climate crisis is serious enough that we can’t let the perfect be the enemy of the good, but this dynamic will be a point of concern throughout the debate. The stimulus should be a lesson to us — Republicans will seize on any little silly sounding item and cry reckless spending if given the chance.