Dinde Clinton et dindon Obama à la sauce Krugman

Contra Krugman, there’s a good campaign parallel between health care and climate change.

Paul Krugman tries to minimise the embarrassment of Clinton’s support for McCain’s gas tax holiday – but his appeal to the health care parallel digs the hole deeper:

I don’t regard this as a major issue. It’s a one-time thing, not a matter of principle, especially because everyone knows the gas-tax holiday isn’t actually going to happen. Health care reform, on the other hand, could happen, and is very much a long-term issue — so poisoning the well by in effect running against universality, as Obama has, is a much more serious breach.

Representing on this blog the 95% of the world’s population who are not American citizens, I must say that I’m very sorry for the 40 million of them who don’t enjoy the right to comprehensive health care which every other wealthy country affords. But American inaction on the climate affects our future directly, so it’s a more important issue to us, like a sane American anti-terrorist policy.

Are the cases really so different?

I agree with Krugman that Obama’s stance against coercive health insurance mandates is mistaken policy; but Mark is right to say that the fine-print differences are not a huge deal. At worst, Obama’s Plan A will fail to cover a quite large cohort, and he will have eventually to use his wiggle room and bring in compulsion. Then again, at worst, Clinton’s big-bang approach could come unstuck in Congress, like the couple’s previous try. Krugman’s strongest objection to Obama’s use of the issue in the campaign is what it signals: to him, a lack of determination and a readiness to concede key talking points to the ruthless opponents of social insurance, which could scuttle his plan.

The gas tax holiday is so silly that it hardly counts as a policy, but by Krugman’s own argument it’s the signals that count. On the face of it, all three candidates support the same basic climate change policy – a cap-and-trade scheme for carbon emissions. But cap-and-trade is only a framework: the substance will be how it is implemented. Specifically, how tight the the initial allowances are calculated and how steep the reduction path. The EU’s pioneering emissions trading scheme, created by people who are serious on climate change, has underperformed in green eyes. Industry lobbies secured generous initial allowances, and later emitting firms learnt how to exploit the Kyoto loophole – put in at the insistence of US negotiators! – that caps could be raised by buying reductions in developing countries.

As you would expect, the mechanism has its share of boondoggles – you could get very cheap carbon credits for a while by paying a Chinese refrigerator factory to install a simple scrubber for fluorocarbons. There are benefits overall, but the declining price of tradeable carbon credits indicates weak pressures on European emitters (chart here page 12). It’s not a bad result to have British polluters finance wind farms in India (footnote), but that wasn’t the intention.

There are plenty of ways of letting a cap-and-trade scheme fail, and getting one right requires courage as well as skill. The gas tax flap has now given us clear signals about how serious the three candidates are about cutting carbon emissions during their possible presidencies, and how much pain they would risk inflicting on the American public for this goal. For McCain and Clinton, the answers are: not at all and none. For Obama, they are at least a little.


The Kyoto/EU offsetting scheme solemnly requires investors to prove that the investments would not have taken place without the offset subsidy. So Indian wind farm entrepreneurs have to certify to Brussels that their projects are inefficient: sited in sheltered valleys, miles from consumers, using unreliable technology, etc. I bet they lose a lot of sleep over this Dilbertian requirement.

Author: James Wimberley

James Wimberley (b. 1946, an Englishman raised in the Channel Islands. three adult children) is a former career international bureaucrat with the Council of Europe in Strasbourg. His main achievements there were the Lisbon Convention on recognition of qualifications and the Kosovo law on school education. He retired in 2006 to a little white house in Andalucia, His first wife Patricia Morris died in 2009 after a long illness. He remarried in 2011. to the former Brazilian TV actress Lu Mendonça. The cat overlords are now three. I suppose I've been invited to join real scholars on the list because my skills, acquired in a decade of technical assistance work in eastern Europe, include being able to ask faux-naïf questions like the exotic Persians and Chinese of eighteenth-century philosophical fiction. So I'm quite comfortable in the role of country-cousin blogger with a European perspective. The other specialised skill I learnt was making toasts with a moral in the course of drunken Caucasian banquets. I'm open to expenses-paid offers to retell Noah the great Armenian and Columbus, the orange, and university reform in Georgia. James Wimberley's occasional publications on the web