If John McCain comes up short in November, particularly in coal states like Ohio and Pennsylvania, he may well wish he hadn't jumped aboard the cap-and-trade bandwagon. See, here's the thing: Inside-the-beltway critics keep harping that McCain doesn't have an overarching narrative that ties his economic policies together. (Obama's, beyond the idea of "change," seems to be all about economic security and income equality.) Rich Lowry over at National Review may have found one, as outlined in a post titled "Cost-of-Living Conservatives." Here goes:
Speaking of energy prices, this would be an excellent time for Republicans to emphasize reducing the cost of living and of raising a family across the board: on energy, drilling and opposition to more energy taxes; on health care, a reduction of insurance regulation to make it easier to buy low-cost plans; on taxes, the Ponnuru tax reform with its massive child credit for families; on prices, free trade to keep the prices at Wal-Mart and elsewhere as low as possible, an end to ethanol subsidies, and opposition to inflationary Fed rate cuts.
1) Of course, the problem with all this, at least as it would apply to McCain, it that the putative GOP presidential nominee is for capping carbon emissions and, thus, dramatically raising energy costs. Essentially, he is for higher energy taxes, just like his opponent, Barack Obama. Now those costs wouldn't be felt right away, but the whole concept cuts against a cost-of-living approach.
2) At one point, reducing carbon emissions probably seemed to McCain and many other politicians like a great way to attract independent and moderate voters. But when people are worried about the economy, fears of a warming Earth pale compared with everyday kitchen-table concerns. What, $125-a-barrel oil isn't enough of a price signal to change behavior and increase investment in alternative energy technologies?
3) Polls show that when times are tough, people want less government, not more. This is something the Tories in the U.K. have found out. Just like here, housing is weak and gas ever more expensive. Prime Minister Gordon Brown's approval ratings are in the tank, just like President Bush's and those of Congress. And British voters are becoming increasingly skeptical of "green taxes," viewing them as mere cash grabs by politicians. No wonder Conservative leader David Cameron is playing down his green policies and focusing more on taxes and the size of government.
4) And few policies will affect taxes and size of government like climate-change policies. A few numbers about the Warner-Lieberman cap-and-trade bill, courtesy of the Heritage Foundation:
The impact on the overall economy is reflected in cumulative gross domestic product (GDP) losses estimated at $1.7 trillion (with generous assumptions) to $4.8 trillion (with more realistic assumptions) by 2030. The single-year GDP losses would range from $111 billion to $436 billion, or $949 to $3,726 per household for each of the nation's 117 million households.... After-tax incomes decline by $47 billion to $120 billion in 2015, or $402 to $1,026 per household. Declines in consumption average $54 billion to $113 billion over the forecast period, or $462 to $966 per household annually.... The price per gallon of gasoline is expected to increase by at least 29 percent by 2030: about $1.10 more per gallon based on current prices. By 2030, average household electricity costs are also expected to increase by $647 annually, and natural gas is expected to increase by $303.
Now these numbers are harsher than the some of the estimates about the impact of cap-and-trade policies from the Environmental Protection Agency, as well as from the McCain campaign. "If you look at the modeling studies...they suggest...a reduction of GDP growth by eight tenths of a percent by 2030," said McCain's chief economic adviser, Douglas Holtz-Eakin, in a recent conference call. I asked analyst David Kreutzer of Heritage about that. His response by E-mail:
EPA's lower estimates include significant increases in nuclear power that may be feasible from an engineering perspective, but are very ambitious from a political perspective (it has been decades since the U.S. put a new nuclear plant in service). In addition, some of their lower-cost estimates assume over 50% of the target emission reductions are achieved by buying international offsets. That is, in the U.S., we would reduce our own CO2 emissions by less than half what is called for in the L-W bill.
Indeed, today's New York Times has a story about the difficulties in making carbon capture technology—key to the EPA's and McCain's estimates of economic damage—work in the real world.
5) If many of Ron Paul's libertarian-minded voters abandon the GOP for the Libertarian Party or just stay home, McCain's big government cap-and-trade plan might be a prime reason why.