Actually, when I first presented this analysis out in Palo Alto, it was President Marco Rubio. And I still have a not-entirely-rational soft spot for my man from Miami. But right now the senator from Texas is looking slightly more likely.
Not that it matters. First, Marco Rubio is a Republican, and one of the many sad things about the current Republican party is that they are all identical on the subject of carbon emissions. As in, they don’t care. Bush, Cruz, Kasich, Rubio, Trump no difference.
Second, American regulatory law is set up to make it essentially impossible for an incoming president to repeal regulation short of changing the underlying legislation. Agencies issue regulations because Congress realized that laws could not be written to cover every contingency as if they were simple algorithms. The big legislation governing the process is the Administrative Procedures Act of 1946, which deliberately slows down the rulemaking process to allow for comment periods ... which is when lobbyists work their magic. Sadly, the magic does not involve hanging out in hotel lobbies with expensive cigars. Rather, it involves “expert” testimony designed to influence the final rule.
Presidents can order agencies to create rules or repeal them, but the latter is almost impossible given the administrative process. On the other hand, they have widespread authority to grant exemptions and slow walk implementation. So ...
President Rubio Cruz could:
- Slow walk approval of state plans, or allow plans based on dubious assumptions to be approved;
- Grant extensions to states with high concentrations of coal plants (KY and WV);
- Allow Congress to overturn the existing plan via the Congressional Review Act of 1996. If the GOP gets a 60-seat majority of the Senate in ‘16, this trumps all else.
In other words, absent a filibuster-proof majority (or a GOP abolition of the institution) the options are limited. But they will be even more limited if the Obama adminstration manages to complete before January 2017 the rule governing what will happen should a state reject the Clean Power Plan. Right now, the plan is to default those states to a cap-and-trade system, the kind of thing that President McCain would have initiated.
That would worsen the Rubio Cruz dilemma.
Consider the marginal firm under a cap-and-trade system where permits are allocated rather than auctioned. Before a cap-and-trade system, that firm was making $X per ton of CO2. Under cap-and-trade, the cost of carbon abatement = the price of a permit, call it $Y.
The firm will either spend $Y, reduce emissions and earn $Y from selling its permit … or it will just use its permit. It still makes $X.
That is for the marginal firm. Some firms will lose, because for those firms the cost per ton of abatement will be greater than $Y. They will need to pay the additional costs or buy more permits. But for a lot of firms, the cost of abatement will be less than $Y. And those firms will be better off under cap-and-trade than they were before: they will pay the cost of abatement and free up permits for sale. One the system is in place, they will mobilize to keep it in place. And that will wreck the politics of global warming denialism.
I suspect that a President Cruz might barrel ahead regardless. The good news is that Cruz will hurt his own re-election chances. Rubio or Trump is more likely to acquiesce to the political reality.
The rub is that much depends on the ability of the Obama administration to get the rules out before January (more realistically, November) and that is by no means certain.
- A GOP president will likely do nothing if a cap-and-trade system comes in, unless he or she does not care about being re-elected in 2020.
- If there is no cap-and-trade system, he or she will be able to do a lot of damage around the margins, but not destroy the reforms.
- Unless we get 60 GOP senators, in which case all bets are off.
Is this helpful? I will change my blogging voice to suit; clarity is important.