Climate Change, Part II: All Crap and No Trade

Yesterday’s post on the climate change cases before the D.C. Circuit promised a few additional thoughts on the institutional aspects of the controversy. Here they are, delivered in customary good cheer.

By any measure, the EPA’s GHG regime constitutes the most ambitious, expensive, and expansive regulatory regime in the agency’s history. No consumer, no industry, no state will remain unaffected. As the EPA and the climate change “community” have emphasized, the problem is global and long-term. We’re not talking about removing a discrete pollutant (lead) from a few products (gasoline, paint). We are talking about a program that must be all-encompassing and run, with increased stringency, from here to eternity.

No one decided that we should do this. Certainly, the Congress didn’t decide it. The Supreme Court didn’t, or says it didn’t (it just told the EPA to follow the law). The EPA didn’t, or at least can plausibly claim that it didn’t and doesn’t (it’s just following the law and the Supreme Court). We are simply sliding into a bureaucratic nightmare.

You can’t be happy about this course even if, and perhaps especially if, you are persuaded that climate change requires dramatic action. As Chris DeMuth has shown in a brilliant paper on the “Intended Non-Consequences” of government regulation, government is lousy at imposing regulations that require massive behavioral changes. It most certainly cannot do so without some credible social, political, and legislative commitment. Regulation by bureaucratic legerdemain may be preferable to no regulation at all. Then again, it may not: it may defuse demands for meaningful action, while compelling the regulators to tailor their imposition to political and social tolerance levels. For evidence, look no further than the EPA’s Auto Rule and Tailoring Rule (described yesterday).

We end up, therefore, with the worst of all worlds: regulation for regulation’s sake. That outcome signals an economic problem and an institutional problem, with a constitutional dimension.

  • We’ve known for decades that much regulation is an expensive waste and that some of the most cherished regimes—FDA drug approval, fuel efficiency standards—cost lives. The price may be worth paying for the social benefit of making ourselves feel better: things are under control, the experts are watching, the New York Times calms down, we can afford the slack. Climate politics partakes of that mindset: it is wedded to, and starkly embodies, a politics of affluence. The problem is that we can no longer afford it.
  • The institutional problem comes into view when you consider that the Constitution aims to forestall a slide into anything and, in fact, requires an extraordinary degree of consensus among rival institutions—the President, the House, the Senate, the Supreme Court—to make anything go forward. The Founders created this system against the background expectation that in the ordinary course of events, nothing bad would come from an institutional failure to agree and coordinate: a world of private orderings would chug along imperfectly, but unmolested. That is no longer so. We live in a world of administrative agencies, operating under capacious statutes. Regimentation, not private ordering, is the default, and it will expand unless political institutions coordinate on some other m.o. or make it stop. Under those conditions, the constitutional checks turn into liabilities.

Political institutions may all agree (and, with respect to climate change, all do agree) on the need for a rational system. But they can’t agree on what that would look like, and the costs of getting from here to there are prohibitive. So are the costs of yelling “stop.” Congress could block the EPA’s GHG regulations in a heartbeat, and so perhaps could an incoming Republican President—but at what cost, and to what effect? Arresting the EPA’s regulatory cascade at the source would require an affirmative decision to the effect that GHGs are not “pollutants” under the Clean Air Act. That is conceptually easy, but politically impossible. Dinging the EPA’s stationary source rules (as presidential contender Rick Santorum has vowed to do on day one) sounds sensible. But it would still leave the EPA under the Clean Air Act’s mandates. For lasting relief you’d have to amend the act itself. However, anyone who proposes to kick the Clean Air Act back into Congress is either a demagogue or else, in need of psychiatric care.  In any event, the interest groups on all sides know that anything can happen in Congress, and none of them like to run the risk. So it’s not going to happen.

We are doomed, then, to a creep of climate regulation—not remotely enough to save the planet or to make us change our behavior and not seriously calculated to do either; not enough to grind the economy to a halt but enough to drag it down, provided the impact disappears in the overall drag of feel-good rules and regulations.

Politics can’t change this predicament, because this is our politics. Next, a few thoughts on whether law might matter.