THE BLOG
07/26/2010 02:03 pm ET | Updated May 25, 2011

Hey, CEOs. Want Certainty? Cap Carbon

Conservative corporate executives -- many of whom are raking in profits while refusing to create jobs -- continue to complain that President Obama's agenda is to blame for the weak economy because it has created too much "uncertainty."

The charge is specious. As the New Yorker's James Surowiecki reminds us, "uncertainty is a fact of business life." Furthermore, "...Wall Street and health care are among the few industries currently adding jobs, which suggests that new regulatory burdens aren't the cause of sluggishness."

In fact, probably the opposite. Wall Street and health insurers just got some additional regulatory certainty because comprehensive reforms for their industries became law.

If you want to argue that there is renewed uncertainty over environmental regulation, don't pin it on the president for proposing legislation to cap greenhouse gas emissions. Blame conservatives for blocking it.

Citing a Bloomberg report of renewable energy investment capital "sitting on the sidelines" waiting for Congress to pass a carbon cap, Mother Jones' Kevin Drum notes:

Conservatives keep complaining that the recession isn't really the fault of weak demand, it's the fault of businesses holding back on investment because of uncertainty over new regulations. This is about 90% bogus, but to the extent it's true, one solution is simply to pass regulations that make the investment picture clearer. A cap-and-trade bill would have done that. But now that it's been killed, no one knows what will happen next. Regulations from the EPA based on the Clean Air Act? A carbon tax sometime in the future? Or what?...

... the planet will continue to heat up. And we run the risk of the EPA being forced to make things worse by applying a badly-constructed law to the problem. Nice work, conservatives.

I don't agree with Drum's concern of the EPA making "things worse." But it's true that many businesses will see it that way. And, as I wrote on Friday, it's that very concern of EPA as chief climate regulator that will lead more and more businesses to rally behind comprehensive legislation.

Already, most utility companies are supportive of a carbon cap precisely because they'd rather have Congress pass new climate-specific legislation than have the EPA apply the current Clean Air Act as it is legally obligated to do.

For climate legislation to pass, we not only need a stronger grassroots push -- as Lee Wasserman observes was sorely lacking -- but also a stronger business push to put right-leaning Senators at ease.

That push will come.

With the White House making it clear that any attempt to strip EPA of its current obligations to regulate carbon pollution will be vetoed, expect the EPA to slowly ramp up its activity, so businesses that have yet to get the memo will begin to feel the heat.

They will recognize sooner or later that piece-by-piece EPA rule-making will not bring about certainty as quickly as comprehensive climate legislation.

For the planet's sake, it had better be sooner.

Originally posted at OurFuture.org