President Bush's recent veto of a costly EPA plan to regulate carbon dioxide emissions shows that he is serious about boosting the country's slowing economy. New emission controls would have harmed consumers and delivered a stinging blow to economic growth. In the face of intense pressure from eco-activists and global warming alarmists within his own administration, the president decided to place a high priority on the nation's energy development and avoided a potentially devastating energy policy miscue early in his term.
The state of Michigan played an interesting role in the beginning of this story last September. Then-Gov. Bush delivered a campaign speech in Saginaw, where he listed CO2 as an emission potentially subject to government regulation along with three other gases. This statement would lead to considerable confusion later on. After Bush entered the White House, some career bureaucrats at the EPA attempted to use this statement as ammunition to expand their regulatory turf. They claimed that candidate Bush was on their side.
In reality, candidate Bush was on record as opposing the Kyoto global warming treaty, an international agreement negotiated by former Vice President Al Gore that would restrict carbon-based energy. At the time of the Saginaw speech, nobody in the news media interpreted it as signaling Bush's support for Kyoto-style controls. Nevertheless, the EPA tried to create this impression later on; hence, recent news reports indicate that President Bush "reversed a campaign promise."
Energy Secretary Spencer Abraham, the former U.S. Senator from Michigan, helped settle the controversy aroused by the EPA. He helped convinced other Cabinet membersand the president himselfthat the administration's broader policy of abundant and affordable energy could not co-exist with the EPA's CO2 plan. In fact, CO2 regulation was not a Republican priority at all. It started out as a proposal in Al Gore's environmental manifesto, "Earth in the Balance," to abolish the internal combustion engine.
Another factor in Bush's decision was an analysis of CO2 regulation by the Energy Information Administration (EIA), a research office in Mr. Abraham's Department of Energy. Under the Clinton-Gore administration, EPA bureaucrats kept the results of this study from becoming public. The newly released EIA report reveals that carbon dioxide controls would likely cost the economy $115 billion dollars per year to implement and would throw 1 million Americans out of work. That would shave 1.2 percent off an economy that is already perilously close to sinking into a recession.
We don't need economists to tell us that CO2 controls would mean lots of pain for consumers and businesses in Michigan, particularly those that rely on plentiful supplies of energy. Regulations would restrict the expansion of needed fuel supplies that are based on carbon: coal, oil, and even natural gas.
Because of America's abundant natural resources, we produce approximately 80 percent of our energy from fossil fuels. About half of the electricity powering the grid comes from coal-fired plants, which emit CO2 as their primary byproduct. Large industries in the transportation and manufacturing sectors know that stringent emission controls would raise their cost of doing business.
Likewise, consumers have already felt the pinch from high gasoline prices. The direct cause of this situation was a policy by a foreign government cartel, OPEC, to restrict supplies of oil. Federal CO2 restrictions would accomplish much the same thing in terms of raising the price we pay at the pump, over and above our steeply regressive gas taxes that disproportionately burden lower income people.
The great CO2 debate occurred against the backdrop of the California power crisis. That state has spent the last 10 years curbing energy options, restricting the construction of new power plants, and micro-managing the utility industry with crippling new regulations and controls. The beginning of carbon suppression measures at the federal level would have set the clock ticking on a time bomb that would someday replicate California's crisis for the entire nation.
Global warming alarmists agitate for energy controls because they fear that economic progress will lead to ruin. Yet the measures they advocate will cause a catastrophe much worse than the one they are predicting. Thankfully, cooler heads have prevailed at the White House. Secretary Abraham and other Bush advisers are to be commended for recognizing that putting the economy under the thumb of an increasingly powerful federal agency is not in the long-run interest of American workers and consumers, even if done in the name of safeguarding the environment.
James Sheehan is a member of the Mackinac Center for Public Policy's Board of Scholars and a research associate at the Competitive Enterprise Institute in Washington, D.C.