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Green Bubble Burst?

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In a post yesterday I drew attention to an emerging battle over macroeconomics. To put it crudely: does the financial crisis mean the next president will need to trim his ambitions and focus on reducing the deficit? Or does it call for substantial public spending to get the economy moving again (deficit be damned, at least 'til better times)?

The Very Serious D.C. establishment thinks it's the former. Greens hoping for substantial climate or energy legislation better hope it's the latter. A great deal hinges on which becomes conventional wisdom.

If you want to see how the battle is playing out, check this AP article about the prospects for climate legislation next year. (Similar sentiments in this San Fran Chronicle piece.)

Republicans are taking a predictable tack: They'll argue that the economic downturn militates against climate policy. "As one Republican senator put it, the green bubble has burst." Their spokesman weighs in:

"The current economic crisis only reinforces the public's wariness about any climate bill that attempts to increase the costs of energy and jeopardizes jobs," [Sen. James] Inhofe said.

But Republicans are going to have a smaller minority next year, so what's more important is how the debate plays out among those purportedly in favor of climate legislation. There, the signs are even more worrying. Witness:

In an interview with The Associated Press, Rep. Rick Boucher, D-Va., said that in light of the economic downturn, a bill that would give polluters permits free of charge would be preferable.

"The first way we can control program costs is by not charging industrial emitters," said Boucher, who released a first draft of a bill this past week with the chairman of the House Energy and Commerce Committee, Rep. John Dingell, D-Mich. Giving away right-to-pollute permits was one of the options.

Boucher will use any pretext to defend big coal utilities, but this one is particularly wrong-headed and pernicious. According to the Congressional Budget Office, giving the permits away to polluters would cost more than auctioning them off, all in. (See a much longer defense of permit auctions here.) The reason, in part, is that auctions raise substantial revenue, which can be spent productively -- more productively than padding utility shareholder pockets. The auction revenue is what pays for the green infrastructure spending.

This debate falls out of the way climate legislation has been framed. To quote myself, "as long as going green is viewed as an expensive and vaguely altruistic undertaking, it will never be a top priority." Anything -- economic downturn, high energy prices, competing priorities, elections, what have you -- will displace it.

Greens and economists need to be making the point that these green investments are not something we need to do in spite of economic woes, or in conjunction with measures to turn the economy around. They are the measures to turn the economy around. Kudos to Cathy Zoi of We for making the case, but she could use some backup.

There won't be much time to do something serious on climate. The news from scientists looks worse and worse every day. And politically speaking, progressive presidents make big, dramatic changes quickly or they don't make them at all. Read Rick Perlstein:

Progressive political change in American history is rarely incremental. With important exceptions, most of the reforms that have advanced our nation's status as a modern, liberalizing social democracy were pushed through during narrow windows of progressive opportunity -- which subsequently slammed shut with the work not yet complete. The post-Civil War reconstruction of the apartheid South, the Progressive Era remaking of the institutions of democratic deliberation, the New Deal, the Great Society: They were all blunt shocks. Then, before reformers knew what had happened, the seemingly sturdy reform mandate faded and Washington returned to its habits of stasis and reaction.

The Oval Office's most effective inhabitants have always understood this. Franklin D. Roosevelt hurled down executive orders and legislative proposals like thunderbolts during his First Hundred Days, hardly slowing down for another four years before his window slammed shut; Lyndon Johnson, aided by John F. Kennedy's martyrdom and the landslide of 1964, legislated at such a breakneck pace his aides were in awe. Both presidents understood that there are too many choke points -- our minority-enabling constitutional system, our national tendency toward individualism, and our concentration of vested interests -- to make change possible any other way.

The next president needs to enter the climate policy battle with a full head of steam and grand ambitions. The Villagers have already started nipping, trimming, eating away at those ambitions. It'd be nice if those in favor of dramatic action pushed back more effectively.