There He Goes Again, Again ...

by hilzoy

A couple of weeks I noted that John McCain didn't seem to understand what a cap and trade system was, despite the fact that he not only advocates such a system, but has actually co-sponsored legislation to create one. There was some debate in comments about whether McCain might have meant something else. Now, however, Kate Sheppard at Gristmill reports that he's done it again. From a press conference today:

"QUESTION: The European Union has set mandatory targets on renewable energy. Is that something you would consider in a McCain administration? [...]

MCCAIN: Sure. I believe in the cap-and-trade system, as you know. I would not at this time make those -- impose a mandatory cap at this time. But I do believe that we have to establish targets for reductions of greenhouse gas emissions over time, and I think those can be met."

Sheppard comments:

"Which is, of course, completely out of line with his own proposal for a cap-and-trade scheme, both the plan he proposed with Joe Lieberman last year and his own presidential plan, released last month. They both would, by nature, be mandatory -- hence the "cap" in the name. This isn't the first time McCain has misunderstood his own policy on cap-and-trade. In the Republican debate in Florida in January, he also denied that his cap-and-trade program included a mandatory cap on carbon.

He also appeared confused about the definition of cap-and-trade in an interview with Greenwire ($ub req'd):

It's not quote mandatory caps. It's cap-and-trade, OK. It's not mandatory caps to start with. It's cap-and-trade. That's very different. OK, because that's a gradual reduction in greenhouse-gas emissions. So please portray it as cap-and-trade. That's the way I call it."

Except, of course, that mandatory caps are an essential part of a cap and trade system. Thus:

"Emissions trading (or emission trading) is an administrative approach used to control pollution by providing economic incentives for achieving reductions in the emissions of pollutants. It is sometimes called cap and trade.

A central authority (usually a government or international body) sets a limit or cap on the amount of a pollutant that can be emitted. Companies or other groups are issued emission permits and are required to hold an equivalent number of allowances (or credits) which represent the right to emit a specific amount. The total amount of allowances and credits cannot exceed the cap, limiting total emissions to that level. Companies that need to increase their emissions must buy credits from those who pollute less. The transfer of allowances is referred to as a trade. In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions by more than was needed. Thus, in theory, those that can easily reduce emissions most cheaply will do so, achieving the pollution reduction at the lowest possible cost to society"

And:

"What are the elements of a well-designed cap and trade program?

A successful market-based program requires just a few minimum elements. All of the following are absolutely essential to an efficient and effective program:

A mandatory emissions "cap." This is a limit on the total tons of emissions that can be emitted. It provides the standard by which environmental progress is measured, and it gives tons traded on the pollution market value; if the tons didn’t result in real reductions to the atmosphere, they don’t have any market value.

A fixed number of allowances for each polluting entity. Each allowance gives the owner the right to emit one ton of pollution at any time. Allocation of allowances can occur via a number of different formulas.

Banking and trading. A source that reduces its emissions below its allowance level may sell the extra allowances to another source. A source that finds it more expensive to reduce emissions below allowable levels may purchase allowances from another source. Buyers and sellers may “bank” any unused allowances for future use.(...)"

Lest there be any doubt, check out this exchange from the January debate Sheppard cites:

Russert: Senator McCain, you are in favor of mandatory caps.

McCain: No, I'm in favor of cap-and-trade. And Joe Lieberman and I, one of my favorite Democrats and I, have proposed that -- and we did the same thing with acid rain. They're doing it in Europe now, although not very well.

And all we are saying is, "Look, if you can reduce your greenhouse gas emissions, you earn a credit. If somebody else is going to increase theirs, you can sell it to them." And, meanwhile, we have a gradual reduction in greenhouse gas emissions.

Just ask yourself why anyone would bother buying and selling credits, as McCain suggests, if they didn't need them in order to make up the difference between their actual emissions and what they're allowed to emit. Moreover, note that the acid rain program McCain refers to has a mandatory cap, as does the EU program he refers to.

***

The best you can say for McCain, on this point, is that he is completely unfamiliar with what is supposed to be one of his signature issues. Not knowing what "mandatory cap" means, in this context, is like not knowing what a "strike" is in baseball. You might, if you wished, explain why you said you hoped your team got a lot of strikes by saying that you thought strikes were a good thing, like 'striking gold', or that you thought that 'striking out' indicated the beginning of a long journey around the bases, as in 'striking out for the territories.' That might even be what you meant. But if it were, that would show that you weren't all that familiar with baseball.

Comments

[Turbulence]

Is it possible that McCain does understand the distinction and is just being sloppy in his language due to a fixation on emphasizing that he's not proposing an absolute cap? In other words, he's being really obsessive about distinguishing between cap+trade and simple moratoriums (no company may generate more than X pounds of CO2 per year). I mean, in the US, we have many moratoriums such as emissions requirements on automobiles. I guess I'm not seeing any definitive evidence here that's he's genuinely confused about the concept as opposed to sloppy and determined to demonstrate his opposition to the most simple minded straw men imaginable.

[Pooh]

I don't think he's confused so much as wanting to be for all things for all people in that endearingly mavericky way of his.

[hilzoy]

Turbulence: that was kind of the point of my last paragraph. In the world of environmental policy, 'mandatory cap' has a clear and definite meaning, just as 'strike' has a clear and definite meaning in the world of baseball. It's possible that McCain doesn't know that meaning, but what that would mean is: he has as little background on this issue as someone who didn't know what a 'strike' was would have in baseball.

Or, to use another example, it would be like saying that you don't want to buy "software" on the grounds that you prefer your programs to come on CDs/DVDs, which are not soft at all. You could say that. And it might be true. But it would not be a good thing to say while touting your credentials as a computer person.

[hilzoy]

And I should add: the meaning of 'mandatory cap' is not part of a very esoteric part of environmental policy stuff. It's basic. You don't have to get into the weeds to know this.

[Oyster Tea]

Another alternative: He knows full well that his proposal involves mandatory caps, but also knows that it is against Republican values to impose them. Thus, he says he's opposed, while also gaining the political benefit of actually being willing to do something beneficial for our environment. It's not ignorance, it's coded political language.

[Turbulence]

hilzoy,

Thanks for explaining. It has been so long that I've forgotten that we should expect powerful politicians to read and be well versed on complex issues.

Maybe one day we can have a debate where the candidates show up expecting the usual debate theatrics but are instead presented with the final exam for a university level environmental or foreign policy class.

[southpaw]

I think pooh is on the right track here. McCain is attempting to triangulate. He's aware that Republicans generally oppose a "mandatory cap" and Democrats generally favor "cap and trade." So McCain has adopted both positions in the hopes that there is a middle ground without actually bothering to discover that there isn't.

[hilzoy]

McCain campaign responds

"UPDATE: The McCain campaign called to clarify his remarks."John McCain was correctly reflecting his position, he just inadvertently said the word 'cap' instead of 'target,'" said spokesman Tucker Bounds.

Today's comment was a response to a question about mandatory "targets" for renewable energy -- McCain believes that a cap-and-trade system provides enough market incentive for investment in renewables. If that's the case (and many environmentalists would disagree), then mandatory targets wouldn't be necessary.

McCain Economic Adviser Douglas Holtz-Eakin also chimed in to note that McCain's Greenwire response sounded confusing because he thought the interviewer was implying that there were mandatory caps on emissions for individuals and companies -- not on the system as a whole."

Personally, I'd find this more convincing if he hadn't made the same mistake a number of times.

[John in Nashville]

Dumb as a box of rocks.

[southpaw]

McCain Economic Adviser Douglas Holtz-Eakin also chimed in to note that McCain's Greenwire response sounded confusing because he thought the interviewer was implying that there were mandatory caps on emissions for individuals and companies -- not on the system as a whole.

So he does favor a mandatory cap on the system as a whole, then?

Or is the confusion contagious?

[Model 62]

Yeah, the update's only marginally less muddy.

Maybe McCain's campaign should develop a cap-and-trade system for clarifying remarks. Advisers who shed more light on what McCain Actually Meant can sell their additional clarity to McCain advisers who can't reach the the Campaign's Overall Targeted Lucidity Floor.

[Mr Punch]

McCain is playing with words, in a normal political way. He knows that cap-and-trade involves a mandatory overall cap, but he's stressing the fact that it does not impose mandatory caps on particular sources -- your car, your power plant. It's spin, not (necessarily) ignorance.

[emile]

As one of the commenters arguing last time for a more generous interpretation of McCain's language I would just like to say: I stand corrected.

Thanks.

[Pooh]

Today's comment was a response to a question about mandatory "targets" for renewable energy -- McCain believes that a cap-and-trade system provides enough market incentive for investment in renewables. If that's the case (and many environmentalists would disagree), then mandatory targets wouldn't be necessary.

Wat? How do you get the incentives for the renewables if the "targets" aren't mandatory?

[ed]

Can we get another ad out of this? Not presidential unless you consider Reagan a half-decent President. Which he wasn't.

[emile]

And now, after acknowledging the error of my ways, another devil's advocate post ;) After staring at the McCain quote and the campaign "clarification" for a few minutes, here's my shot at reading it so he isn't clueless or spinning to the point of lying.

The campaign clarification gives us a "corrected" quote:

MCCAIN: Sure. I believe in the cap-and-trade system, as you know. I would not at this time make those -- impose a mandatory [renewable energy production target] at this time. But I do believe that we have to establish [mandatory] targets for reductions of greenhouse gas emissions over time, and I think those can be met.

where the [] text is modified as per the "clarification." So, McCain is trying to say that he doesn't support mandatory target for renewable energy *production* (ie., 20% of our energy production must come from renewable sources), because he feels that a cap and trade system will achieve the same goal (reduced CO2 emissions) more effectively and directly.

If you legislate a mandatory target for the amount of renewable energy produced you might not actually reduce CO2 emissions. Say, if your total energy production went up enough.

However, if you implement a cap-and-trade system not only do you target what you actually care about (total CO2 released) you allow market forces to fund renewable power generation when it is cheaper than buying extra polluting credits.

Anyway, that's my bend-over-backwards for a McCain friendly reading. I'm having a hard time extending him the benefit of the doubt at this point.

[rea]

Is it possible that McCain does understand the distinction and is just being sloppy in his language due to a fixation on emphasizing that he's not proposing an absolute cap?

I've been trying to make sense out of seemingly senseless things Republican candidates have said since 1980, and I've come to the conclusion that there is no "there" there. Occam's razor meets Gump's law: "Stupid is as stupid does."

[hilzoy]

emile: generosity is a good thing. I like yours.

[cleek]

sure, he's completely ignorant of even the basic facts of the things he's promoting, and doesn't seem to care at all about this. but don't worry, he'll surround himself with smart people.

[publius]

Maybe McCain's campaign should develop a cap-and-trade system for clarifying remarks. Advisers who shed more light on what McCain Actually Meant can sell their additional clarity to McCain advisers who can't reach the the Campaign's Overall Targeted Lucidity Floor.

One of the best comments I've ever read -- that's why i love the Internets.

good post -- mccain honestly just doesn't understand this stuff. simplest explanation is best.

[hilzoy]

I just checked, and none of the stories I've read on McCain's press conference today mention this. (NYT, WaPo, LAT, USA Today, AP...)

Not one.

[hilzoy]

And yes, Model 62: that was an excellent comment.

[Ben Alpers]

But wouldn't you rather have a beer with John McCain than with that bitter elitist Barack Obama?

[j/k, of course!]

[Hartmut]

The Son of Cain also misquoted (on June 11th)
Obama's "bitter" quote by replacing "guns" with "the Constitution" and then blasted O. for loathing people for clinging to said sacred text. The media seem no to have called him up on this. (source: Robert Parry, Consortium News, 14th of June 2008).

[redterror]

"I've been trying to make sense out of seemingly senseless things Republican candidates have said since 1980, and I've come to the conclusion that there is no "there" there. Occam's razor meets Gump's law: 'Stupid is as stupid does.'"

Rea, you are my new hero! What a perfect explanation of our downwrd course since the election of the Great Communicator. I'm going to use this freely, with due credit given to the source. And this is why I read the internets.

[Mr Punch]

I'm no McCain fan, but I continue to think this is reasonably clear -- he's contrasting a market-based system (cap and trade) with the command-and-control approach with which most people are familiar. I have an emission control system on my car (mandate) and I have to pass a state emissions test (mandate); if I could instead buy emissions rights from my neighbor who drives a Prius, there'd still be a mandate in the background, but I'd have a choice.

[John of the Dead]

Mr Punch, how is your car example any different from a cap-and-trade system? In both systems, there's a total emissions limit (a cap) and if one producer goes over his allotment, he may buy emission rights from another producer who is under his limit (a trade). So how are they different?

The only thing I can see is that the "cap" isn't really a mandatory limit but rather a targetted guideline. But if that's the case, then what incentive does anyone have to not go over target?

[bc]

O.k., I consider myself as having at least average intelligence (although rea might argue with that due to my political affiliation). I'm generally in favor of market-based incentives versus government mandates. While not an "environmentalist" in the lexicon of the green movement, I am in favor of preserving the environment. And while I haven't read the actual text of the proposed legislation by either side of this debate, I think I should be able to grasp the basic talking points of either candidate.

Maybe it's just my Milton Friedman-colored glasses, but I agree with Mr. Punch. A "mandatory" cap would seem to me to be one which nobody can exceed. Ever. Or your company is infiltrated by an army of bureaucrats. In a cap and trade, by definition you can exceed it so long as you purchase credits. Sure, there is a measuring point above which you have to pay and below which you get a credit. And, sure, this measuring point will go down over time.

So do we call this a "mandatory" cap? Is it mandatory if I can exceed it? It's mandatory that I have to purchase credits if I do, but it's not an absolute mandate that I stay under the cap because credits are available. So, to me, the cap is not necessarily "mandatory." I understand why some say that it is, but it makes just as much sense to say that "no it's not mandatory. You can exceed it by purchasing credits." It is not clear to me that it has to be the way so many of the "smart" party say it has to be.

Telling me that "no, you can't interpret it that way because the environmental bible defines it a different way" doesn't change the fact that I easily grasp what McCain is saying. IMHO, you have to torture language to say it can't be the way McCain relates. Occam's Razor says he is triangulating at worst. And I'm no McCain fan. But, since I liked Reagan, maybe I'm just too dumb to hear the music of the code . . . .

[John of the Dead]

bc, you still have to have an overall, total cap. The entire system MUST have a mandatory cap, beyond which all producers together cannot go. If everyone can buy credits, without limit, it's an emissions tax, not a cap. That's where Sen McCain seems fuzzy and contradictory. He seems to simultaneously claim that there's a system-wide emissions cap, while denying there's a cap.

[Turbulence]

Mr Punch, how is your car example any different from a cap-and-trade system? In both systems, there's a total emissions limit (a cap) and if one producer goes over his allotment, he may buy emission rights from another producer who is under his limit (a trade). So how are they different?

Wha? This makes no sense to me. In the states in which I've lived, car owners have to get their vehicles periodically certified by the state as complying with emissions regulations. If your vehicle passes, then you get to drive it. If your vehicle passes in the most awesome way ever, then...you still get to drive it. If your vehicle fails, then you're not allowed to drive it (ignoring some details about grace periods for getting it fixed and retested). There is no way to transfer credits from someone whose vehicle produces extremely low emissions. In many places you don't even find out what emissions numbers your vehicle produces: they tell you whether it passes or fails and that's it. There is no market on which you can trade emission permits. Doesn't exist.

[hilzoy]

bc: the caps the question is about concern not caps for individual companies, but caps for the country (or the EU) as a whole. These are mandatory: they set the number of credits that are available for purchase, and cannot be exceeded. What McCain said is that these would be voluntary. That is just not what his actual policy, or the legislation he co-sponsored, say.

Plus, it's not about "the environmental bible". When a community of people who discuss something settle on a particular usage, then if you are familiar with that usage, you will either use it or indicate that you mean something different. I could, if I wanted to, deny that the thingos I write here on ObWi should be called "posts", on the grounds that they are not sent through the mail, or used to hitch horses to, or something. In that case, I should explain what I mean.

If I simply deny that these things are "posts", and get puzzled when people don't understand when I mean, it's not because other people are just saying that I have no right to deny "the blogger bible".

[John of the Dead]

Sorry, Turb, I was addressing Mr Punch's theoretical car emissions test. You're absolutely right, it doesn't work that way anywhere so far as I know. Mr Punch was trying to compare the McCain plan to a hypothetical car emissions cap-and-trade system. It didn't make much sense to me, either, which is why I tried to address it. Sorry for any confusion.

Perhaps Mr Punch could clarify what he meant, rather than my trying to guess and apparently failing? :-)

[Turbulence]

bc: Telling me that "no, you can't interpret it that way because the environmental bible defines it a different way" doesn't change the fact that I easily grasp what McCain is saying.

I think the point you may be missing is that there exists a large body of people that deal with environmental policy issues for a living. Many of these people are not environmentalists at all - for example, many people who work in electricity production or petroleum refinement deal with environmental policy for a living. All of these people use a common lexicon of terms because they have to communicate with each other. This is a field that spans several large industries and many local, state, and federal government entities; it encompasses billions of dollars of economic activity every year.

Within this field, phrases like "mandatory cap" or "cap and trade" have well defined meanings. You can't just decide that those meanings no longer exist or no longer matter simply because you yourself have never bothered to work in the field or study it or learn anything about it. How would you feel if I told you that as someone who is not an attorney, I know for a fact that killing people by accident cannot be manslaughter because no one meant any harm? Do I get to just redefine legal terms because I feel like it, even if I've spent no time whatsoever learning about what they mean? Does this practice sound conducive to understanding and discussion and good policy formation? Or do you think that doing that would muddy the waters, confuse things terribly, and make it much harder for our political process to achieve agreement?

[bc]

Hilzoy and Turbulence:

I get the overall cap and that it is mandatory. But there is a difference between a purely mandatory cap system that includes fixed limits ("allowances") on individual companies and "cap and trade." I think it is entirely appropriate to respond "no, I'm not in favor of a pure mandatory cap system whereby each business is assigned a portion of the overall limit and cannot under any circumstances exceed that. I am in favor of cap and trade." I don't see that any particular answer contradicts this meaning.

Take for example the debate. He answers the question "no" and then describes cap and trade (comparing it to the acid rain system), and then says: "And, meanwhile, we have a gradual reduction in greenhouse gas emissions." I take this last phrase to refer to a system like the acid rain system, i.e. an overall cap (what you call the "mandatory cap") with no individual mandatory cap, but instead a trading system.

Plus, as I understand McCain's system, there is no cap at all until 2012. Right?

So when he says:

But when he says this:

I would not at this time make those -- impose a mandatory cap at this time.

he is literally saying the truth. He is not in favor of an immediate mandatory cap.

Is it disingenuous to refer to his proposal that way? That's one way of looking at it. Another way is to look at it as an emphasis that his plan does not impose mandatory caps on individual companies, just like the acid rain system.

Query: in the lexicon, does "mandatory cap" also refer to individual caps? I know most proposals talk about "allowances" or "permitted amounts" and such. My point is that the average person could easily take "mandatory cap" to refer to individual limits. I did some searching, read the McCain-Lieberman bill, then woke up,:) read the USCAP flyer, etc. and did not find a definitive answer. In the bill, McCain calls the overall limit a "target" whatever the general lexicon may or may not be.

In short, I still do not see McCain's public statements the same way you do. To me, it's garden variety political talking points (penitentiary vs. corrections facility)

As an aside, I think it is remarkable that a Republican candidate made such a sweeping proposal to combat global warming with such potentially adverse impacts on the economy. Give the guy some leftist credit!