Save the Economy, Save the Planet

Even before the financial markets fell into cardiac arrest and Dr. Paulson prescribed his $700-billion adrenaline shot, the economic crisis had become the only issue that really mattered in the presidential election. Sure, the McCain camp was talking about some other crucial stuff—sex education for kindergartners, porcine cosmetology—but Iraq, health care, and especially climate change were and still are lost in the economic glare. That's understandable, but for Americans who began the year feeling hopeful that climate action was finally becoming inevitable, it has been a sobering summer. And now there's fear that a deep recession could drive global warming off the next president's agenda altogether.

The evidence of impending climate catastrophe keeps piling up, and both candidates support a declining cap on greenhouse-gas emissions. Yet they rarely find time to talk about it. (Each gave the subject a polite nod during the Clinton Global Initiative.) Obama and McCain know that at this moment of deep economic distress, warnings about future climate impacts aren't going to help them carry Ohio. That much has been clear since June, when $4-a-gallon gasoline helped snuff the Lieberman-Warner Climate Security Act and the nation's hopes and dreams began shifting from save the planet to "drill, baby, drill." Opponents of Lieberman-Warner claimed it would jack up energy costs, throw people out of work, and kill the U.S. economy; supporters responded that its impact wouldn't be that bad. Not that bad is not that good a strategy, and green leaders realized then that if they were ever going to break the political logjam, they had to drive home a more optimistic economic message.

Today, that message is coming into focus, and what looked like obstacles to climate action in June may soon be seen as opportunities. Hard times didn't stop Reps. John Dingell and Rick Boucher from releasing a long-awaited climate bill this week, and hard times could actually help propel the climate debate next year, because the steps needed to deal with global warming can also help deal with America's shaky economy and dependence on foreign oil—and even raise money for jobs and infrastructure. Obama's climate adviser, Jason Grumet, mused about the possibilities at an energy conference held recently at Harvard. "To the extent that climate change [legislation] is the next big American stimulus package," he said, "that brings forward a different kind of dialogue."

How does a climate bill become a stimulus package? It begins with our first national debate on energy supply in 30 years. The fossil-fuel brigade may have seized the upper hand with Newt Gingrich's "drill here, drill now, pay less" slogan, but the enviros have an argument of their own: reduce demand through energy efficiency; diversify supply through development of solar, wind, and geothermal energies; and build a clean economy that cuts fuel costs and creates hundreds of thousands of green jobs—steelworkers making wind turbines; carpenters retrofitting buildings; maybe even pipefitters laying the lines needed to capture and store CO₂ from coal-fired power plants. In other words, Americans can move toward energy security and shore up the crumbling economy by doing what it takes to solve the climate crisis.

That's the case Al Gore made in his July 17 speech in Washington, D.C., and repeated at the Democratic Convention in Denver the night Obama accepted the nomination. But when it came time for Obama's address, the candidate mentioned the climate crisis only in passing and went much harder on clean energy and green jobs: "I'll invest $150 billion over the next decade in affordable, renewable sources of energy—wind power and solar power and the next generation of biofuels; an investment that will lead to new industries and five million new jobs that pay well and can't ever be outsourced."

Say hello to Obama's Trojan horse—a climate policy hidden inside an energy-and-economic policy. Obama takes Gore's energy trifecta, lops off the climate message, and stores it in the belly of the beast while energy independence and economic renewal drive the contraption forward. The tactic was on display in Tuesday night's presidential debate, when both candidates agreed that clean energy investments could revive the economy. Obama responded to a question about climate change by emphasizing jobs: "The new energy economy," he said, "can be an engine that drives us into the future the same way the computer was the engine for economic growth over the last couple of decades. And we can do it, but we're going to have to make an investment." Climate activists were thrilled to hear Obama call clean energy his "top priority," even if he did so "because you're paying $3.80 here in Nashville for gasoline," not because the arctic ice cap is wasting away. This is not a dumb tactic; the man wants to get elected, and until the Wall Street meltdown gave him a boost, his support was shaky among working-class voters who have more immediate problems than the fate of the Earth—so it just makes sense for him to emphasize job creation rather than planetary salvation. And Obama is not the only one talking this way. Former Bill Clinton Chief of Staff John Podesta, a supremely well-connected wonk who runs the Center for American Progress, says he's hearing the Trojan horse idea "from my friends in the environmental community. They are frustrated. They've been preaching to empty pews for so long, they think maybe if they change churches someone will show up."

Let's be clear: No environmental leader worthy of the name is going to stop talking about the climate crisis and pretend this is just about jobs. Obama's Trojan horse is a campaign tactic, not a legislative one. And that's a good thing, because removing climate from the climate debate would be a terrible idea for three reasons. First, if you make energy self-sufficiency your only goal, there's no reason not to embrace the high-carbon "all of the above" solution advocated by people like Gingrich. "I call those people the dirty greens," says Van Jones of Green for All, the most impressive voice in the eco-justice movement. "They say drill, do tar sands and oil shale, turn coal into liquid fuel-whatever! Burn kittens, as long as they're American kittens. Toast the planet!" Second, if you make freedom from expensive fuel your main motivator, then your argument collapses when energy prices drop. And third, given the continued industry opposition to aggressive climate action, it will take the broadest possible coalition to get a climate bill passed, including evangelicals, national-security wonks, green-jobs activists, alt-fuel mavens, green capitalists, the hook-and-bullet crowd, and an army of enviros. Downplaying the climate crisis means squandering the moral message—our duty to future generations—that has galvanized so many. Besides, it wouldn't work. You can put lipstick on a climate bill, but it's still a climate bill.

So, the task is not to somehow disguise the climate crisis or the declining cap on emissions needed to deal with it, but to propel them forward with a message about the economic benefits of climate action. Since climate, energy, and the economy are intertwined, any climate bill will have a profound effect on the economy, and it just makes sense to embrace it. The next president will take office with a list of expensive promises and no money with which to pay for them. As they try to decide which problems to tackle first, both McCain and Obama recognize that a global-warming bill brings with it a built-in revenue stream. The cap-and-trade system that they support could raise $100 billion to $600 billion a year by auctioning some or all of the permits that allow industry to emit CO₂. Some of that money would be spent on energy R&D (that's Obama's 10-year, $150 billion pot of gold), but the next president will have to give most of it back to the people if he wants to pass a climate bill during a recession. It's the best way to resolve the basic cost objections to climate action, and it would help juice the economy while accelerating the transition to a clean energy.

Yes, putting a price on carbon, whether through a tax or cap-and-trade, will drive up household energy costs in the short and medium term before reducing them in the long term, as alternative energy comes on line. Still, receiving an annual check from the climate bill's allowance auctions might persuade some to support it. (Lieberman-Warner devoted $800 billion of its auction proceeds over the next four decades to this sort of energy cost relief. It wasn't nearly enough.) Climate strategist Peter Barnes argues that if the federal government wired them into every American's bank account on a monthly basis (to the tune of, say, $3,000 per household per year), the climate-change bill would becomes the mother of all stimulus packages, the national equivalent of those Alaska dividends that helped make Sarah Palin so popular.

No one should suggest that this money grows on trees. It will come from coal and oil companies, carbon-dependent utilities, and other corporations that buy pollution, and they will surely pass those costs on to customers in the form of higher prices. But according to a University of Massachusetts study, under a cap-and-cash-back plan, most families would come out ahead on the deal. And the more they conserve energy, the more cash they get to keep.

This may not seem like the best moment to argue for the creation of a new market for carbon-do we really want the same bankers who brought us the subprime fiasco to start trading, slicing, and dicing carbon credits? The answer is yes, because without such trading the market is broken. It fails to assign any cost to the global-warming pollution that's being dumped into the skies for free. "Cap-and-trade is a market mechanism, but it's not a free-market mechanism," says Environmental Defense Fund President Fred Krupp. "It's a government-imposed market that remedies a fundamental market flaw. And the idea that markets can be flawed and need a well-thought-out fix is something people may be more receptive to now." Next year, if the new president has the guts to introduce a new climate bill despite the chilly economic winds, it will be time to repair this colossal market failure-while paying people a dividend to make sure the fix doesn't cost too much.