Energy Policy: Two Steps Forward, One Step Back

The lead article in today’s New York Times is titled, “Obama Opposes Trade Sanctions in Climate Bill.” It describes the recent legislation approved by the House, the chances of similar action by the Senate, and the opposition of President Obama regarding one provision of the proposed bill.

The item in question was crucial to the success of the legislation as it was added to secure approval from members of the House with a large manufacturing base in their district. It was designed to ensure that U.S. industries were not placed at a competitive disadvantage compared to other countries without similar energy efforts.

In my opinion, President Obama is correct in his opposition because economic tariffs represent an inefficiency and impediment to global trade. For anyone who has taken Economics 101 in college, it is easy to graph the negative impact of tariffs for all parties involved, compared to relying on free market forces. 

As to the Republican opposition, well, let me quote the article directly:

“… But he [President Obama] expressed scorn for the Republicans who fought the bill in the House. He noted that some of them had predicted political doom for those who voted for it, recalling the 1993 battle over an energy tax that failed and helped Republicans gain control of the House a year later.

“Those Republicans ‘are 16 years behind the times,’ he said, comparing their position to that of Republican leaders in the energy and  health care debates of the early Clinton years.

“‘They’re fighting not even the last war,’ he said. ‘They’re fighting three wars ago.’”