A decade ago, “Cap and Trade” was all the rage among environmental activists. This law would have given government the ability to regulate carbon dioxide emissions. Cap and Trade would have placed an artificial limit (or “cap”) on companies’ emissions and allowed them to buy (or “trade”) excess allowances from other companies that hadn’t met their caps. The price of these carbon indulgences would be determined by what other companies were willing to pay for them.
High-carbon industries like coal power would have been forced to either buy credits or switch to lower-carbon generation methods. As President Obama said, “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”
Environmental activists advertised Cap and Trade as a government-mandated, market-based approach, which seems like the ultimate oxymoron. The only reason a market would exist would have been to avoid paying massive, government-enforced penalties for emitting a gas that previously was perfectly legal and free to release.
Carbon regulation rests on the underlying presumption that imposing legal quotas for carbon is the government’s job. Since the government clearly did not have this power, President Obama and Nancy Pelosi tried to pass a law to make it so.
In 2009, Missouri Farm Bureau (MOFB) and many other groups banded together to oppose Cap and Trade. We believed, and still believe, the best way to limit emissions is through the free market: if limiting carbon emissions is important enough to the American people, it will be in companies’ best interest to do so. This view prevailed as Cap and Trade stalled in the U.S. Senate.
Environmental activists felt that we did not have enough time to wait for public opinion to support them – the government had to act now by whatever means necessary, and the people would just have to deal with it. So after President Obama failed to secure enough votes to pass a law, he tasked the Environmental Protection Agency (EPA) with inventing a creative interpretation of the Clean Air Act to cap carbon emissions. President Obama called this proposed regulation the “Clean Power Plan,” or CPP. Opponents called it “Back-Door Cap and Trade.”
Fortunately, legal challenges stopped the CPP from going into effect long enough to allow President Trump to take office and review the rules. Last year he announced his intention to repeal the CPP and end President Obama’s “War on Coal.” The EPA is now gathering public comments on this proposed repeal.
This week, MOFB testified to support repealing the CPP. While we have major disagreements with the underlying policy, the unprecedented way it was created may have been even more troubling. In a representative republic, the legislature gets to decide what new laws to pass, and the executive branch is just supposed to ensure those laws are put into practice.
After this ten-year battle, we are happy to see that the will of the people still matters. If our elected representatives refuse to enact a law, government bureaucrats should not look for ways to do what they want anyway. And when government bureaucrats underestimate the knowledge and will of the citizens they represent, they should not be surprised when the citizens rise up and remind them who’s really in charge.