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Cap-And-Trade Politics: Carbon (Like Place) Matters!

Yesterday, the Senate Environment and Public Works Committee voted to report out climate legislation, with ten Democrats voting yes, one Democrat (Montana’s Sen. Baucus) voting no, and all of the Republicans boycotting. If you look at the vote tally (using Project Vulcan data), you find that the states of senators voting "no" emitted 29.4 tonnes of carbon per capita, and the states of "yes" voters emitted 13.3 tonnes per capita, compared with a national average of 20.9 tonnes per capita.

What do you think? Does this mean that the likely impact of cap-and-trade legislation on the members’ states influenced their votes? We would say it does, as we implied in a post we put up the other day on the household costs by a bill by metro. However, Matthew Yglesias would likely disagree, going by his response to our previous examination of this issue.

Matt doesn’t think representatives from metros (or states) with higher carbon emissions are less likely to support cap-and-trade. Instead, he argues that “the primary driver of the politics of climate change is general ideological factors, followed by the interests of energy producers rather than consumers.” That is, he thinks that industry opposition to carbon legislation is a stronger motivator of "no" votes than consumer opposition—an interesting theory that we can almost buy. Did you see all those anti-climate bill industry ads during the World Series?

However, we think we’ll stand by our contention, bolstered by spatial data and recent research on the politics of the carbon economy. Most notably, the economists Michael Cragg and Matthew Kahn have written a paper that looks at these issues in some depth and concludes:

This paper uses several geographical data sets to document that conservative, poor areas have higher per-capita carbon emissions than liberal, richer areas. Representatives from such areas are shown to have much lower probabilities of voting in favor of anti-carbon legislation.

Along these lines, Cragg and Kahn find that emissions per capita are negatively correlated with the probability of pro-environmental votes on a resolution to support the reduction of greenhouse-gas (GHG) emissions, holding income per capita and political ideology constant. That is to say, even Democrats are more likely to oppose GHG regulation if their county is a heavy GHG polluter. Local costs influence local politics, as we’ve said all along.

But that’s still abstract. To bring this down to the ground, let’s get specific and look at the state-by-state breakdown of House members who voted yes on the Waxman-Markey climate bill this spring (a.k.a. the American Clean Energy and Security Act), compared with the metropolitan carbon emissions of their states, with data courtesy of the New York Times. If you check out the graph below, it really does appear that House members from states with low-carbon-emitting metros really are significantly more likely to have voted "yes" on Waxman-Markey.


And if you use state-level emissions the picture looks the same: "Yes" votes on cap-and-trade tend to emanate from lower-emissions states.

In the end, then, it really does seem that place—and carbon!—matters in congressional voting on climate. Of course, there are many other factors that influence these votes, and yes, ideology—and business opposition—play a role. But it is rare to find an issue for which ideology is completely divorced from reality, especially with respect to economic policy. And so we do agree with Cragg and Kahn that regional variations in the costs of cap-trade justify regional variation in allowances, on top of progressive redistribution based on household income. Fortunately, these two components are both in current House and Senate legislation. Yet, the allocation of allowances can easily go too far, becoming political bribery while weakening the bill’s environmental benefits. The allocations should be linked to measurable cost projections, based on the real difficulties of moving out of high GHG energy sources, not sheer political influence.