Inevitable externalities

You can’t plan for everything. We know that BP avoided paying $500,000 for a piece of safety equipment that’s mandatory in other countries, a remote shutoff valve that might have been able to prevent the worst of what we’re seeing now. Clearly this is a pretty loud cry for better regulations. And while I certainly don’t think this is Obama’s fault, I’m also reluctant to blame the Bush administration:

BP and its employees have given more than $3.5 million to federal candidates over the past 20 years, with the largest chunk of their money going to Obama, according to the Center for Responsive Politics.

I’m not saying this to advance some sort of crazy conspiracy that Obama conspired to blow up the rig to improve the chances of banning offshore drilling and getting a comprehensive energy-climate bill through (because somehow in this country’s political discourse, 11 dead workers andmassive environmental and economic damage is a reason to drill more, not less, and it looks like this is going to make Kerry-Graham-Lieberman harder, not easier), or that the response was deliberately slow (it wasn’t [and if you only read one of the links from this piece, it should be that one]), just that a culture of deregulation has been normal for a long time. Notwithstanding smaller regulatory moves like this (which in my opinion are what differentiate this administration from the last), I don’t think that it’s fair to blame the laxity of American corporate (especially energy) regulations entirely on Bush.

What we have a chance to do now is to reclaim the externalities. It’s time to impose a windfall profits tax on all non-renewable energy companies, and mark all revenues collected for clean energy R&D and investment. That’s going to be hard with people like Mary Landrieu and John Boehner holding as much sway as they do because of bizarre and misused parliamentary procedures, but it needs to be done. A price on carbon would be nice too. We need strong leadership from Obama right now. His history with offshore drilling is complicated, but I really do believe he wants it ended. It’s a question of political feasibility. And this is his chance.

If we let the GOP (read: the ones calling for expanded offshore drilling) get away with painting themselves as the true bearers of a “comprehensive” (and their plan is anything but), it won’t just be a political defeat. Cap-and-trade (which I continue to defend as the best system out there) will be dead, and if the GOP gains a majority in the House this year (which is looking increasingly likely), we may not get a comprehensive energy-climate bill until it’s too late.