Yada Yada...Washington Talks While Missouri Acts on Climate Change

April 10, 2009
You could be forgiven for thinking that national action to reduce greenhouse gas emissions is going nowhere. This article in yesterday’s Washington Post describes the persistent hand-wringing inside the Beltway about the putative cost of cap-and-trade regulation. The argument continues although, as I and many others have argued, the U.S. is perfectly capable of implementing a system that would feature a 100% auction of carbon emissions permits from the outset, low initial costs, and compensating rebates to keep energy bills level for working families. Meanwhile, well outside the Beltway, my home state of Missouri is commonly identified as a “brown state” whose coal dependency ensures opposition to action on carbon emissions. Missourians voted Republican by a slim margin last November. At the same time, they were asked to vote on Proposition C:
Shall Missouri law be amended to require investor-owned electric utilities to generate or purchase electricity from renewable energy sources such as solar, wind, biomass and hydropower with the renewable energy sources equaling at least 2% of retail sales by 2011 increasing incrementally to at least 15% by 2021, including at least 2% from solar energy; and restricting to no more than 1% any rate increase to consumers for this renewable energy?
“Brown state” Missourians voted Yes on Proposition C by a 2/3 majority. Now, a cost-conscious economist (I’m one of them) might be tickled by the seemingly-contradictory instruction: “You will reach 15% renewable energy by 2021; you will not increase rates by more than 1%.” But that might well be short-sighted, because Proposition C gives the green light to a renewable energy expansion that will exploit scale and learning effects to make renewables less costly. So who can say with any certainty that Missouri voters can’t have it both ways? In any case, they’ve joined green-staters like Californians in supporting low-carbon development via mandated renewable energy expansion. So Washington talks while Missouri chooses to act. Not according to the preferences of this bemused native son, perhaps, but act it does.


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