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Place Matters in Cap-and-Trade Compliance Costs, Does it Drive Politics?

By Matthew Yglesias  

"Place Matters in Cap-and-Trade Compliance Costs, Does it Drive Politics?"

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There’s a lot of variation from place-to-place in terms of carbon emissions. Some places are sprawling, others are dense. Some places are cold, requiring a lot of heating. Some places have coal-fired electricity, others rely much more on cleaner sources. That’s the upshot of this useful rundown of place-by-place variation in costs to households of clean energy legislation done by Jonathan Rothwell and Mark Munro at Brookings:

What do we make of these results? The first thing to say is: The household costs of cap-and-trade compliance vary quite a lot, and depend quite a bit on what metro you live in. Ranging above and below the average $160 cost to a household nationally in 2020, the average metro figures range from a high of $277 per household in Lexington, KY to a low of just $96 in Los Angeles. Low costs are registered all across the West’s metros and in Northeastern metros like New York, Boston, and Rochester. Much higher costs will be borne by households in metros all across the upper South and Ohio Valley—places like Cincinnati, and Indianapolis, and Nashville. So once again, as we keep saying: Place matters.

This is followed, however, by some back-of-the-envelop political analysis that I don’t think is correct:

Given these realities, you can see why the chief sponsors of climate legislation hail from California (Rep. Henry Waxman, Sen. Barbara Boxer) and Massachusetts (Rep. Edward Markey, Sen. John Kerry) while the leading opponents, like Rep. John Boehner, represent Ohio or the South. But you might also think that regions that want to do well for their citizens might want to manage growth a little better, provide transportation options, and think about cleaning up their energy sourcing. Look at the map, after all: Place matters!

I think it’s hard to leap to this conclusion. The Northeast and California are aligned on a wide array of political topics—gay rights, abortion, labor law—that have absolutely nothing to do with carbon emissions. In particular, I began to have serious doubts about this analysis when I went to this table and discovered that DC is one of the highest-cost metro areas and Boise is one of the lowest-cost ones. I made a table showing eight above average and eight below average metros, with selections made with an eye to problematizing this conjecture about the politics of the climate bill:

carboncosts

DC strikes me as a particularly good test case for this hypothesis. The DC area is generally quite left-wing. But apparently would feature high compliance costs with a cap-and-trade bill. So are Donna Edwards, Chris Van Hollen, and Jim Moran among the House Democrats who made the most trouble for Waxman and Ed Markey? Well, no, they’re not. Nor is Boise a hotbed of support for climate change legislation nor Austin a hotbed of opposition.

My counter-hypothesis is that, the primary driver of the politics of climate change is general ideological factors, followed by the interests of energy producers rather than consumers. The DC area relies on a lot of coal power, but it doesn’t involve a lot of coal-related employment.

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