Commentary

Free market believers and fans of small government might ask, is Congress the right place to address this issue?  Newt Gingrich and John Kerry debated climate change yesterday in DC.  Mr. Gingrich described Congressional efforts on climate change as anti-free market and implicitly anti-business.  Let the private sector solve the problem was Mr. Gingrich’s argument.

I disagree.  The private sector is now in Washington asking for a new regulatory framework that will create a fair playing field, that will reward or cost each business fairly depending on what they do with their CO2 emissions.  The private sector is great at solving problems when there is a profit to do so.  New federal regulations would create the clearer, more immediate profit motive that Mr. Gingrich was touting yesterday.

Any economist will tell you that if a resource has no cost associated with it, it will be overused.  It used to be that we could dump business waste into rivers because there was no direct cost to doing so.  (The indirect cost was losing the use of the river, declining property values, health care costs, cleanup costs, etc.) When we decided to create rules that defined a clear cost for dumping waste into rivers, our businesses adapted. 

Congress needs to do the same thing for dumping CO2 in the air and several key CO2-intensive businesses Duke Energy, GE, Conoco and Alcoa are in favor of US regulations.