If You Liked ObamaCare, You’ll Love ClimateCare*

Wrecking both health care and energy as a presidential legacy

As Barack Obama’s signature health insurance program implodes, some observers are speculating that regulatory action on climate change could afford the beleaguered president a second chance at establishing an enduring policy legacy. Unfortunately, Obama’s climate policies, like his health care policies, highlight his fondness for centralized economic planning.

The president unveiled his “new national climate action plan” at Georgetown University last June. The plan aims to cut U.S. greenhouse gas emissions by 2020 to 17 percent below their 2005 levels. In his speech, the president noted that he had urged Congress to adopt a “bipartisan, market-based solution to climate change.” But he also said he wasn’t going wait for Congress to act, so outlined what amounts to a kind of Climate Five-Year Plan, setting limits on greenhouse gas emissions at home while pursuing efforts abroad to reach “a new global agreement to reduce carbon pollution through concrete action.”

To get some idea of the kind of climate change legacy President Obama might yearn for, let’s take a look back at what his proposals were before the friction of actual governance stymied his plans. Back in 2008, then-candidate Obama offered up a “plan to combat climate change and create a green economy,” the goal of which was to cut U.S. greenhouse gas emissions by 80 percent by 2050. At the center of his plan was a cap-and-trade system that would have required that 100 percent of permits covering all greenhouse emissions be auctioned off. What might the price for each ton of greenhouse gas have been, and how would it affect the way Americans live?

To get handle on this question, consider the calculations the administration did last May to compute the social cost of carbon—that is, the harms of climate change caused by the emissions of greenhouse gases, chiefly carbon dioxide produced by burning fossil fuels. The Interagency Working Group on the Social Cost of Carbon reported various values for the social cost of carbon in 2015, ranging from $12 to $109 per ton. To get a rough idea of the total cost to the U.S. economy, let’s use the $58 per ton cost as a possible auction price.

According to the Environmental Protection Agency, the U.S. emitted the equivalent of 6.7 billion tons of carbon dioxide in 2011. Auctioning off permits for that amount of emissions would yield about $388 billion in revenues per year. For comparison, federal individual income tax revenues in 2012 amounted to $1.1 trillion. The original Obama Climate Plan did not swap the carbon taxes out for other taxes, such as individual or corporate income taxes, but would instead used them to fund clean-energy and energy-efficiency projects and to help lower income Americans to pay for the resulting higher energy costs. While such a tax would reduce carbon dioxide emissions, simply piling it onto existing taxes would further distort markets and reduce overall economic efficiency and competitiveness.

Using figures derived from a May 2013 Congressional Budget Office report on the economic effects of a carbon tax, an auction price of nearly $60 per ton would boost the price of a gallon of gasoline by 60 cents per gallon and the average price of electricity by about 48 percent. The average household consumes just over 1,000 gallons of gasoline annually. Increasing the price of a gallon of gas from the current average of $3.20 to $3.80 would raise household gasoline expenditures by $600 per year. Similarly, average annual household electric bills more rise by more than $600.

Auctioning off emissions permits was not enough. The original Obama Climate Plan would have required that the United States obtain 25 percent of its electricity from renewable energy sources—wind, solar, geothermal, and so on—by 2025. Nuclear and natural gas were not mentioned. As it happens, in 2012, solar, geothermal, and wind energy generated 0.11, 0.41, and 3.46 percent respectively of electric power in the United States. A recent Information Technology and Innovation Foundation study estimated that replacing all U.S. fossil fuel power by 2030 would cost each American household nearly $5,700 per year. Extrapolating from that, the earlier Obama electric power renewable fuel mandate would result in an increase in household electricity costs on the neighborhood of $570 per year.

In his Georgetown speech, the president scaled back his renewable energy mandate to doubling production by 2020, which would mean that solar, geothermal, and wind would produce 0.2, 0.8, and 7 percent respectively of America’s electric power by then.

An analysis by the market-oriented Manhattan Institute compared the price trends of electricity between coal-dependent states that have adopted renewable fuel mandates of the sort that the president favors and those that did not. The study found that between 2001 and 2010, residential electricity rates had increased by an average of 54.2 percent in the states with mandates, more than twice the increase seen in comparable states without a renewable fuel requirement.

The Georgetown speech also included a reference to the EPA’s new automobile fuel economy standards (CAFE): “We doubled the mileage our cars will get on a gallon of gas by the middle of the next decade.” Estimates by the National Automobile Dealers Association found that the new CAFE standards will boost the average price of a car by $3,000. Proponents correctly counter that that additional cost will be offset in extra fuel savings. On the other hand, a 2012 analysis by scholars at Massachusetts Institute of Technology found that setting automobile fuel economy standards is at least six to 14 times as costly to the economy as a gasoline tax that achieves the same cumulative carbon dioxide reduction. Technology mandates are a very expensive way to cut carbon dioxide emissions.

I say all this not to suggest that we should do nothing to address the possibility of a climate catastrophe. I say it because the Obamacare fiasco should be a warning to the president and other policymakers that a comparable ClimateCare program of top-down centralized planning will miscarry just as spectacularly. Wrecking both the health care and the energy sectors is hardly the kind of legacy a president should want to leave.

*I have been made aware that there is a company called ClimateCare. The headline is in no way refers to the climate and development experts at ClimateCare. Sorry for any confusion.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • R C Dean||

    Has a lame duck President ever pushed a "legacy" achievement through Congress against opposition?

  • itsnotmeitsyou||

    Silly RC, he's not going to push anything through "congress". It will be by decree.

  • fish_remote||

    It's the "10 Commandments" method of legacy establishment....

    So let it be written...so let it be done.....

  • sarcasmic||

  • Francisco d Anconia||

    Cong... wha?

    Don't worry, I told the insurance companies they don't need to comply with the parts I don't like.

    /Dictator in Chief (DinC?)

  • R C Dean||

    What one President institutes by decree, the next President can eliminate by decree.

    This is how you know Republican Presidents and candidates are Total State supporters.

    Regulations are promulgated by administrative agencies located in the executive branch. A President could dismantle huge swathes of the regulatory state with the stroke of a pen. And they never do.

  • Sevo||

    ..."speculating that regulatory action on climate change could afford the beleaguered president a second chance at establishing an enduring policy legacy."

    He's already GOT a legacy entirely appropriate to his abilities. Not a good idea to make it even worse.

  • sarcasmic||

    She's smoking! Mount Etna puffs out dozens of rings measuring hundreds of feet across as she spews molten lava


    http://www.dailymail.co.uk/sci.....-lava.html
    Obviously caused by climate change.

  • OneOut||

    Would it not be the finest F'ing thing in the world to fly an F16 through the center of one of those ?

  • The Last American Hero||

    One of the oddest moments of the 2012 presidential debates was when Obama claimed he wasn't a "top down" guy like Romney. When Willard rolled over and let that go unchallenged, I knew that Obama was indeed the Lightworker.

  • OldMexican||

    The president unveiled his “new national climate action plan” at Georgetown University last June. The plan aims to cut U.S. greenhouse gas emissions by 2020 to 17 percent below their 2005 levels.


    I can't wait to see how the website for that thing will work out!

  • JWatts||

    Just imagine the Obamacare website, but run off of intermittent wind/solar power.

    "The web site will be down until the cloud cover clears or the wind picks up to 12 mph. We're sorry for any inconvenience.

    You can call our ClimateCare Navigator hotline and give them your personal information. They will be more than happy to patiently watch the web site for you, refreshing their browsers every 30 seconds, until power is restored.

    For additional help call: 1-800- FU1CKYO."

  • OneOut||

    That's it. You win. That is probably the reason that O'care.gov works in fits and starts. It powered by green energy.

    Why is he keeping that a secret ? If he made that known that would be great political cover for all except the die hard racists.

  • OldMexican||

    Estimates by the National Automobile Dealers Association found that the new CAFE standards will boost the average price of a car by $3,000.


    Affirmative Action for fuel injection system manufacturers.

  • Francisco d Anconia||

    Can you imagine what the auto industry, and the state of transportation in general, would look like if auto manufacturers were able to sink their R&D into things customers wanted instead of being forced to spend it on improving mileage standards?

    I suspect cars, as we know them, would no longer exist.

  • Pro Libertate||

    Ah, now I know where my flying car is.

  • Francisco d Anconia||

    A self flying car. You get in, tell it where you want to go and then start commenting on H&R. About the time you're finished putting Tony in his place, you're at your destination.

  • Pro Libertate||

    Personally, I think no large-scale use of flying cars until they're essentially autonomous.

  • Francisco d Anconia||

    I doubt you could ever teach the majority of society to fly, nor would most want to learn.

  • Pro Libertate||

    Yep, agree completely. Robot flying cars or nothing.

  • Rasilio||

    This.

    We've actually had flying cars for a while now. The problem has been licensing since about the early 1990's.

    Basically they have all required the owner to get a pilots license and you still have to take off/land at an actual airport which makes them unsuitable for mass markets.

    Once they can make them safely autonomous that need will disappear and they will become viable

  • Edwin||

    What the hell are you people talking about? This isn't the first time I've heard libertarians that if we took up libertarianism we'd have flying cars already. Usually it's more obnoxious, crazy libertarians, but let's try not to mimic the extremists in in our cause, OK?

    PHYSICS prevents flying cars. Even if you could manufacture a kind-of affordable airplane with wheels (the cheapest proposals for light personl aircrafts I've heard are around $80,000 using plastics and stuff for the frame/body, which is still pretty expensive), part of the usefulness of a car is in its MILEAGE, yeah, a transmission system is too heavy for a plane, not to mention the issues of safety, maneuverability and actualy the requirement for some weight for regular high-speed cruising and maneuverability at those speeds on the ground.

  • Sevo||

    Edwin,
    You can make it shorter:
    A flying car is a miserable car and a miserable airplane. Too many conflicting requirements.

  • RightNut||

    About the time you're finished putting Tony in his place, you're at your destination.

    Is he flying across the street?

  • OneOut||

    That is only for short trips.

  • fish_remote||

    Does anyone still make a carbureted car in this country any longer?

  • JWatts||

    Not since the early 1990's.

  • KDN||

    Ford, Chevy, and Toyota each make a couple of models, but they're incredibly expensive.

  • Sevo||

    Not sure about that; NASCAR is injected now.

  • OneOut||

    Cash for Clunkers raised the price for nice used cars by $1000. So why not?

    That's not an exaggeration. I know the business.

  • OneOut||

    Cash for Clunkers raised the price for nice used cars by $1000. So why not?

    That's not an exaggeration. I know the business.

  • Jimbo BTR||

    Umm...perhaps you should call yourself TwoOut.

    #durn sqrrls

  • Pro Libertate||

    Obamaclimate.

  • JWW||

    $5,000 for healthcare here, $1000 in increased energy prices there, $1000 extra for other regulations, pretty soon your talking no one has any money left...

  • Rasilio||

    It's worse than that.

    Since most of these programs come with subsidies for the lower end of the economic spectrum they serve to push the upper middle classes and lower classes into a single lower middle class lifestyle.

    Then once Doctors, Enginers, and everyone else in the 3rd and 4th economic quintiles look around and start asking why they are bothering to work when they could just quit and suffer absolutely no loss in lifestyle the economy collapses.

  • blist14ant||

    we need to talk about healthcare philosophically. like this by ayn rand http://www.youtube.com/watch?v=xg5ZI1LDrbs

  • Francisco d Anconia||

    Can you imagine Leno having such a discussion with anyone?

  • Death Rock and Skull||

    At this point, Obama is just doing his greatest hits over and over again.

  • Anomalous||

    More like a medley of his hit.

  • Death Rock and Skull||

    You mean a medley of his shit?

  • blist14ant||

    I believe libertarians need to end the evil philosophy of Neo conservatism and Progressivism in this country.

  • Death Rock and Skull||

    There's only one way to do that.

  • montana mike||

    Lots of firing squads?

  • Faceless Commenter||

    Hey, I like that. We've got a new suffix, like -gate (Watergate, Monicagate, Travelgate, etc).

    -Care

    Use freely.

    ClimateCare, ImmigrationCare, MinorityCare, PreschoolCare, DietCare.

  • MSimon||

    How about an "I Don't" scandal.

  • MSimon||

    I'd like to see a plan for growing crops under ice. Just in case another ice age puts Chicago under a mile or more of ice.

  • OneOut||

    In 1840 the explorer James Ross was the first person to do a marine survey of what was later named for him, The Ross Ice Shelf. In 1912, Robert Falcon Scott, the second man to lead an expedition to the geographic south pole, also surveyed The Ross Ice Shelf. Both men were chosen to lead their expeditions because of their navigation and marine survey skills. Falcons entire party perished after reaching the pole ( He refused to use dogs and proved that men couldn't drag enough food for such a long journey and back ). A later expedition brought back his logs and journals to England. A noted naturalist of the age was quoted as " lamenting that the Great Ross Ice Shelf has retreated by over 50 miles between surveys 62 years apart. He wished he had seen it it all it's glory. Ross discovered the ice shelf in a sailboat without a steam engine. Scott's ship was more technologically advanced, it had auxiliary steam power. Sail was used for distance and coal powered steam for power and maneuverability in the ice. So the largest Antarctic ice shelf was already receding 1 mile a year when first discovered during the Age Of Sail. I don't pretend to know what was causing this melting of the ice shelf. Unfortunately, man made global warmist claim to know. They blame it on something that did not exist when it was first noted that the ice shelf was retreating.

  • blcartwright||

    This "Little Ice Age" as described in Europe lasted until 1850, just after Ross visited Antarctica. If the cooling was truly global to some extent, by the time Scott arrived temps may have been returning to "normal" for 60 years or so. http://www2.sunysuffolk.edu/ma.....e_age.html

  • OneOut||

    Did SUVs cause the ice to melt ?

  • C. S. P. Schofield||

    Jimmy Carter is going to owe Obama BIGTIME when all is said and done.

  • Dr No||

    Freedom is a “bipartisan, market-based solution to climate change.” I encourage Congress to adopt it.

  • sheila124||

    my best friend's ex-wife makes $74 an hour on the laptop. She has been out of work for five months but last month her pay was $21054 just working on the laptop for a few hours. explanation..........................

    ⌘⌘⌘⌘⌘⌘⌘
    http://www.tec30.com
    ⌘⌘⌘⌘⌘⌘⌘

  • Michael Ejercito||

    Did not Carl Sagan and four other scientists prove thirty years ago that setting off all the world's nuclear weapons at once would have a global cooling effect?

  • NotAnotherSkippy||

    No, or at least the effect was grossly overstated. There are ~18000 weapons worldwide. If we say average yield is 100kt (it won't be much more than that), then that's ~1Gt of explosive potential. Now we go look at the scale of a big rock smacking into us. You can see that a 700m diameter rock carries 29Gt of energy or an order of magnitude more than all of the world's weapons combined. Even if you up the average yield to 250kt, you're still off by a factor of 10. 1Mt, a factor of 4.

  • Mark22||

    Obama need not worry, his legacy will certainly be enduring, even if he will be remembered as incompetent and his policies as harmful.

  • Edwin||

    You knowm sometimes I think the best thing the republicans/the right thinking of us could do is just let the democrats have their way until they bankrupt the country in like 10 years. You'd think with higher taxes they would be able to drag it out like Europe, but their green-economy proposals are so expensive ($trillion+ investments) that with all their other policies they'd flat out bankrupt the country and halt the economy in 10 years. Then all we'd have to do is walk around telling people "we told you, we told you, NOW do you see what they're talking about?"
    Why aren't we doing this with Ron Paul? He predicted the crash YEARS ago!

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Progressive Puritans: From e-cigs to sex classifieds, the once transgressive left wants to criminalize fun.
  • Port Authoritarians: Chris Christie’s Bridgegate scandal
  • The Menace of Secret Government: Obama’s proposed intelligence reforms don’t safeguard civil liberties

SUBSCRIBE

advertisement