Reviving Cap and Trade – The Sunstein Also Rises

Glenn Beck has many times asserted, not unpersuasively, that Cass Sunstein is the most dangerous man in America. Sunstein is Obama’s “Regulatory Czar” and the co-author of Nudge: Improving Decisions About Health, Wealth, and Happiness, basically a blueprint for incrementally moving a population towards more enlightened behavioral decisions (as determined by the likes of Dr. Sunstein) through the “stick-and-carrot” inducements of regulation.

“We think that it’s time for institutions, including government, to become much more user-friendly by enlisting the science of choice to make life easier for people and by gently nudging them in directions that will make their lives better,” they wrote.

“…The human brain is amazing, but it evolved for specific purposes, such as avoiding predators and finding food,” said Thaler and Sunstein. “Those purposes do not include choosing good credit card plans, reducing harmful pollution, avoiding fatty foods, and planning for a decade or so from now. Fortunately, a few nudges can help a lot. …”

In the highly unlikely event he didn’t have an actual hand in it, Sunstein would doubtless applaud the EPA’s latest nudge in pursuit of de facto Cap and Trade entitled PSD and Title V Permitting Guidance for Greenhouse Gases.

Rich Trzupek, in his frontpagemag.com article “Cap and Trade Returns” describes it thus:

[It will] serve as the blueprint for a sweeping new power grab by [the EPA], one that neatly avoids the tiresome and time-consuming requirements that a piece of legislation duly passed by Congress would impose on the EPA.

Trzupek, who’s obviously well-qualified to discuss such things, explains why something as supposedly innocuous as a “guidance document” conceals much greater import.

The fact that it is a guidance document, as opposed to a formal regulatory proposal, is very significant. Regulations have to be proposed in certain forms, economic costs have to be considered, and there is a long, detailed public process involved. Guidance, on the other hand, isn’t subject to any of these sorts of annoying requirements. Guidance is the EPA offering its “opinion” on a subject and, when the criticism begins, Jackson will surely hide behind this accurate, but ultimately deceptive, detail. Few states outside of Texas will ignore EPA guidance, for such a document is traditionally treated as Holy Writ by state and local agencies. After all, their permitting decisions are ultimately subject to the EPA’s approval. How can a state regulator expect to have a decision approved by the overseeing federal authority if he or she ignores federal guidance?

Another way of thinking of this – and again I’m grateful to Dr. Sunstein for providing just the right euphemism – is “altering the choice structure”.

So, what exactly are the state and local agencies being nudged towards?

Up until now, the authority of the EPA and the state and local agencies that do the bulk of environmental work in the field has been limited to “what comes out of the stack.” The EPA could limit emissions, in order to meet applicable standards, but it couldn’t get involved in economic decisions or process details. Those days are over. In the name of reducing greenhouse gas emissions, the EPA will be directing the state and local agencies that report to the feds to use “energy efficiency” as a permitting guideline. Jackson’s agency wants bureaucrats across the nation to begin dictating choices in equipment and the way that equipment is operated and maintained, and to turn the EPA’s judgment on the best way to operate a facility into permit conditions.

I know what you’re thinking, what could possibly be wrong with saddling an industry already knee-deep in regulations and regulators with yet another layer of bureaucratic micromanagement by the same kinds of people who’ve done such spectacular things with the housing industry and the car companies?

Any hopes that Trzupek will disabuse us of our skepticism are pretty much dashed a few paragraphs on.

There are a few notable exceptions, but for the most part, the men and women who write permits fall into one of two categories: a) kids a few years out of college who know very little about any industrial process, or b) older folks who couldn’t hack it in the private sector because they don’t have sufficient talent, enough intelligence or both. In either case, it is a constant struggle for industry to make permit writers understand the relatively simple issues that involve what’s coming out of a smokestack. Asking these same people to grasp what happens in an entire manufacturing or power producing process is a recipe for chaos.

Arguably chaos is the object of the exercise, or at least sufficient hobbling of our energy industry to level the global playing field. Lately the mandarins of climate change have been a good deal more candid about this. Consider this admission by a senior IPCC official that Climate Policy Is Redistributing the World’s Wealth:

Basically it’s a big mistake to discuss climate policy separately from the major themes of globalization. The climate summit in Cancun at the end of the month is not a climate conference, but one of the largest economic conferences since the Second World War. Why? Because we have 11,000 gigatons of carbon in the coal reserves in the soil under our feet – and we must emit only 400 gigatons … there is no getting around the fact that most of the fossil reserves must remain in the soil.


[The] developed countries have basically expropriated the atmosphere of the world community. But one must say clearly that we redistribute de facto the world’s wealth by climate policy. Obviously, the owners of coal and oil will not be enthusiastic about this.

Anyone who thinks the administration regards the recent mid-term elections as anything but a speed-bump in pursuit of its greater agenda needs to look very closely at Trzupek’s article and anything else dealing with the alphabet soup of regulatory agencies that will be used to end run the legislature. This is how they intend to roll – surrogates like John Podesta at the Center for American Progress have already said as much.

The U.S. Constitution and the laws of our nation grant the president significant authority to make and implement policy. These authorities can be used to ensure positive progress on many of the key issues facing the country through:

* Executive orders

* Rulemaking

* Agency management

* Convening and creating public-private partnerships

* Commanding the armed forces

* Diplomacy

The ability of President Obama to accomplish important change through these powers should not be underestimated.


The upshot: Congressional gridlock does not mean the federal government stands still. This administration has a similar opportunity to use available executive authorities while also working with Congress where possible.

Actually, with all due respect to Podesta, the upshot is this: with legislative avenues cut off the Left will attempt to consolidate its gains – some of which are germinating in those enormous vague new laws we were told not to worry about — through regulation. The president’s executive power notwithstanding the success of this will rely on a docile congress (you remember John, the guys who provide the funding and have subpoena power) and a somnambulant public.

Call me madcap but I don’t think either of these are assured, and in fact represent the real powers that “should not be underestimated.” There are seventy or so people currently packing up their offices who would probably back me up on this.

(Cross-posted at NewsReal Blog.)