The Straw That Stirs the Drink (Still Off-Topic)

Washington Post reporter Alec MacGillis wrote "A Guide to the Health Care Fight" for the Sunday Post's Outlook section on August 16, 2009. In it he said:

Dominating the whole [health care] debate is the question of whether to include a government-run insurance plan on the exchange. Proponents say such a measure — included in the House bill and the Senate health committee bill — would provide the uninsured with a guaranteed high-quality plan, in case insurers still try to game the rules to deny coverage or payments. They say it would also restrain the overall growth in costs. A low-priced competitor, the logic goes, would drive insurers to pressure doctors to deliver the most cost-effective care.

In today's newspaper, "Debate's Path Caught Obama by Surprise: Public Option Wasn't Intended as Major Focus" appears on the front page. It quotes "a senior White House adviser, who spoke on the condition of anonymity," who said:

"We've gotten to this point where health care on the left is determined by the breadth of the public option. I don't understand how that has become the measure of whether what we achieve is health-care reform."

Let me, then, summarize the whole pro-public plan position: I'd say there are two main reasons why the public option is indeed "the measure of ... health-care reform." One, it will keep private insurers from gaming the system. Two, it will "restrain the overall growth in costs."

I consider the second reason even more important than the first. To "drive insurers to pressure doctors to deliver the most cost-effective care" is to compel the restructuring of how health care is delivered in this country. Not how it is insured, necessarily, but how it is delivered. Today, doctors and other sources of health care charge for services rendered. Another MRI, another charge. What needs to happen is for providers to work together, avoid unnecessary, duplicative procedures, and get paid for results, not for services.

President Obama has said he won't insist on a public option, i.e., a nonprofit, government-run health insurer. He isn't "drawing a line in the sand" about a public option. He favors it but he has also said, "If there is a way of getting this done where we're driving down costs and people are getting health insurance at an affordable rate and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I'd be happy to do it that way."

Fine, but without a public option or a close substitute, driving down costs is problematic. So what might be a close substitute? MacGillis, in the Post:

To get Republican votes, the Senate Finance Committee's bill is likely to include member-owned cooperatives instead of a public option, though critics say those would lack competitive clout.

And, according to today's front-page story:

Republicans signaled Tuesday that dropping the public option would not garner additional GOP backing. Jon Kyl (Ariz.), the second-ranking Senate Republican leader, criticized an alternative idea of creating a private insurance cooperative, calling it a "Trojan horse" that was effectively the same as the public option.

"It doesn't matter what you call it, they want it to accomplish something Republicans are opposed to," he said.

Kyl's comments came as other conservative Republicans joined in to bash the co-ops idea. Rep. Tom Price (Ga.) said, "A co-op that is simply another name for a public option, or government-run plan, will be rejected by the American people."

Yesterday morning's Post juxtaposed these two articles: "Some Key Democrats Say Public Option is Essential to Health-Care Reform" and "Health Cooperatives Gain Backing as Alternative to Public Option." According to the latter, health co-ops might not even make it off the ground, assuming the eventual reform legislation authorizes them.

That's important, but what's truly key is that co-ops, if passed, might lack enough marketplace clout to drive health care into a more efficient delivery mode. The public option would do just that. My continuing attitude is that the public option amounts to the Reggie Jackson of health insurance reform: it's the straw that stirs the drink.

Off-Topic Yet Again: Mr. President, Please Don't Kill the Public Option!

Today I sent the following message to President Obama at the White House:

Re: Keep the public plan in health insurance reform, please

Dear Mr. President,

It's Sunday, Aug. 16, 2009, and as I was sipping my morning coffee I was pondering whether to donate money to Organizing for America in support of your health care reform program. I thought I'd first send a message to you saying I feared that as soon as I did so, you would back away from the public option which I feel is a sine qua non of reform.

Before I composed that message, I signed on to Yahoo! and learned that your Health and Human Services Secretary, Kathleen Sebelius, has on this very day, on CNN's "State of the Union," floated backing away from public insurance.

I'm oh-so-strongly opposed to that. As John Holahan and Linda J. Blumberg of the Urban Institute's Health Policy Center wrote in "Is the Public Plan Option a Necessary Part of Health Reform?":

"Due to the controversial nature of the public plan option, policymakers are considering alternatives that could be considered as possible compromises between liberals and conservatives. These alternatives include reducing the market power or ratesetting power of the public plan or creating nongovernmental, nonprofit entities that could produce their own insurance plans with negotiated provider payment rates. While these options are likely to have political appeal, it is important to recognize that the cost-containment potential of a public plan rests fully in its ability to leverage the power of the federal government as health care purchaser to encourage provider participation and reduce prevailing payment rates. Without taking advantage of that strength, the cost-containment potential of the public plan option or an alternative would be tremendously weakened."

Citing Mr. Holahan and Ms. Blumberg, a recent Washington Post article (Friday, August 7, 2009), "Democrats Weigh the Cost of Public Insurance," makes the point that:

" ... a public plan is essential to fiscal responsibility in a country where health-care spending has soared to $2.4 trillion per year. A public option such as that proposed by House Democrats, with prices initially set at 5 percent above Medicare rates but well below private insurer rates, would inject competition into markets that are now oligopolies: An American Medical Association study found that a single insurer controls more than half the market in 16 states and a third of it in 38 states.

"This competition, the thinking goes, would drive insurers to demand that medical providers find more cost-effective ways to deliver care, leading to innovations and the spread of well-integrated networks of salaried physicians in place of the costly fee-for-service approach that predominates today.

"As it stands, insurers can pass along rising medical costs in the form of higher premiums. But with a public option in the mix, providers would work with insurers to lower costs to keep the private insurers from going out of business. Providers would probably have little choice but to accept the public option but would not want it to gain too much of the market. Medicare does not offer this competitive dynamic because it covers only the elderly. ...

"The economists in this camp say a public option would not underprice insurers so aggressively as to drive them out of business — political pressures from medical providers would restrain Congress just as it is restrained today from limiting Medicare rates too much. Private insurers could still compete on service and would benefit from their deep ties in local markets.

"But the public plan would produce savings, [economists like Mr. Holahan and Ms. Blumberg] say. The Congressional Budget Office estimates that the House's public option would save $150 billion over the first 10 years. Without it, these economists say, the government would have to save money by cutting subsidies to the point that people would be unable to afford the coverage that they're required to buy."

Secretary Sebelius said on CNN that public insurance is "not the essential element." Mr. Holahan and Ms. Blumberg suggest that it is. I think Mr. Holahan and Ms. Blumberg are right, and Secretary Sebelius is wrong. For your administration to cave in on the public option is, I believe, pandering to the political right in hopes of getting a half-a-loaf reform bill passed ... and it will keep me from making that donation to Organizing for America. It will also end my erstwhile tendency to give you my strong, unwavering support in the various fights, such as that on climate change, that lie ahead on today's political agenda.

You can get my unwavering support back, Mr. President, but only if you back away from today's backing away, so to speak.

If you, like me, support health insurance reform that includes a government-run public option, I urge you, too, to write to President Obama at the White House and tell him so.

Still Off-Topic: Model Health Reform Public Plan on FEHB?

In Admittedly a Bit Off-Topic: A Public Plan, or Not? I strayed off the main topic of this blog: the environment and climate change legislation. Now, more of the same. My rationale is that the health-reform debate is so intense right now that no one is thinking about climate legislation.

The debate over health care reform/health insurance reform has indeed turned ugly. The "continental divide" between supporters and opponents of reform has at its very apex the question of a public option for health insurance. This option would, depending on who you ask, either open up Medicare, as presently constituted, to younger people or create a new, separate, government-run insurer that is something like (but not exactly like) Medicare.

The latter possibility is the one I discussed in the post I just mentioned. My assumptions were that premium rates would be set halfway between Medicare and private plans, and only people in certain categories would be allowed to join. Restricted access and rates above Medicare's would keep the plan from swamping the private insurance market, while allowing some competition between the public plan and private insurers. That competition would wind up putting pressure on health care providers, via private insurers, to restructure away from the omnipresent fee-for-service model that now drives health care costs skyward.


However, I shouldn't have so casually ignored another model that has been proposed for the public option: opening up the current Federal Employees Health Benefits Program to one and all.

FEHB, as the program name is abbreviated, provides yours truly, a retired federal employee, with health coverage. I am quite happy with the health insurance I get via FEHB, which comes from CareFirst BlueCross BlueShield of Maryland, a so-called Preferred Provider Organization or PPO. (A PPO is apparently a sort of fee-for-service plan that saves money by directing me to particular health care providers that have signed up to charge less.) My locally provided insurance coverage is, in turn, part of a national umbrella plan called FEP Blue (for "Federal Employee Program - BlueCross BlueShield").

If I stopped liking that coverage, each fall at "open season" I would be able to change. I could, if I liked, choose among straight fee-for-service plans, PPOs like the one I have, or health maintenance organizations (HMOs). There are, as well, "High Deductible Health Plans," "Consumer-Driven Health Plans,"Health Reimbursement Arrangements," and "Health Savings Accounts." Some of the options open to me are nationwide, and others are specific to my home state, Maryland.

Apparently, some of the political leaders who have spoken in favor of a public option have suggested opening up the Federal Employee Health Benefits program as one way to do it. According to this blog post, Senator Max Baucus (D-Montana), who heads the crucial Finance Committee, favors "keeping the public option 'on the table'," and FEHB expansion is one way he has spoken of for doing it.

It looks as if a great many of those who want a Medicare-style public option hate the idea of using an FEHB expansion in its stead. The blog post I just mentioned is a case in point, as are this post and this. The complaints are that FEHB is too expensive, since "100,000 federal workers don’t participate because they can’t pay the price"; FEHB just repackages private insurance, with its high overhead expenses and profit margins; and, as such, an FEHB expansion could not bend the cost curve down as well as a Medicare-style public option would do.


My thought is this: why not include a Medicare-style public option within an expanded FEHB umbrella program?

Call the Medicare-style public option "Medicare Plus," or MC+. MC+ would, I imagine, be just as supporters of a strong public option would hope. Of course, policymakers would have to decide how close to Medicare to make it — for example, would premium rates be right at the Medicare level, or halfway between Medicare and private insurance? But those are questions that would have to be faced if any sort of public option is implemented.

Meanwhile, MC+ would, like all other expanded-FEHB choices, be bought through whatever federal agency runs the program. FEHB is now run by the Office of Personnel Management (OPM), but opening it to non-federal employees would surely require putting it elsewhere. If it were me, I'd create an independent entity something like the Federal reserve to run it. I'll call whatever independent government entity administrates the program the Federal Health Board, or FHB.

The FHB, in administrating the program, would operate something like OPM does now. Mainly, it would negotiate with all of its insurance offerors (including whoever runs MC+) to get lower prices, which would typically originate with discounts from health care services providers — doctors, clinics, hospitals, etc.

Putting MC+ under the FHB would allow the latter to structure the whole umbrella program so that MC+ did not get "too big for its britches" and drive private insurers out of the marketplace. The FHB would, because it is independent of both the President and the Congress, not be subject to political pressures to liberalize MC+, which might ultimately sound the death knell for private health insurance.


A good question is, how would Joe and Jane Citizen pay for MC+ coverage? If they were currently in the FEHB program, either as current government employees or as retirees, they would have their paychecks or pension checks reduced by the amount of their regular contribution toward premiums — and the remaining cost of their coverage would come as a subsidy out of government operating expenditures.

But if Joe and Jane don't work for Uncle Sam, their expanded FHB coverage would have to be paid for in other ways. Likewise, any subsidy provided by the federal government toward the cost of Joe and Jane's health coverage would have to be handled differently.

Specifically, if Joe and Jane opted for MC+ coverage, the financial mechanics might have to be different than if they had the kind of coverage I have now.

My guess is that some or all of the MC+ premiums, for non-government employees, would be handled either as direct billings or in conjunction with filing income taxes. Subsidies could come as income tax credits or be paid directly into bank accounts.

These are details that would have to be worked out. But the main thing to keep in mind is that policymakers could bundle a Medicare-style public health care plan within an expansion of FEHB and get the benefits of both!

Admittedly a Bit Off-Topic: A Public Plan, or Not?

OK, admittedly it's a little bit off the beat of this blog that mainly takes up issues of climate change, clean energy, and the environment: the question that has been diverting my attention these days is (drumroll, please) health-care reform.

That comes as no surprise, since the entire body politic has been gnashing its teeth over the issue for weeks. I think the hinge issue in the whole health care debate is that of a public option: a government-run public health insurance plan something like Medicare and Medicaid, but mostly for small firms, self-employed, and individuals that currently lack health insurance and (because of a new "individual mandate") have to enroll.

President Obama says he wants a public option, as do many Democrats in Congress ... but by no means all of them. The more liberal the Democrat, the more likely he or she is to support a public plan — except for those few who are so far left that only a so-called single-payer system will suit them.

Meanwhile, virtually no Republicans want a public option. Senator Lindsey Graham, a South Carolina Republican, is one of the few GOP members who voted in favor of Sonia Sotomayor's confirmation to the U.S. Supreme Court, and even he is dead set against a public option. In Time to Make a Deal: A Conversation With Lindsey Graham, Dealmaker, which appeared recently in The Washington Post, the senator said:

Democrats need to understand that there won't be a public option anytime soon, if ever. Every big issue gets boiled down to one phrase. The public option in many ways has become to health care what "amnesty" was to immigration or "privatization" was to Social Security ...

My belief is that no private-sector entity can survive over a long period of time competing against the government. The public option will be written by politicians. It will be generous. Nobody in my business worries about the bottom line. Eventually the public option will dominate the marketplace because the political forces are different than the economic forces in the private sector. Eventually, the private sector will give way. We already have Medicaid and Medicare. The private sector covers the middle. If a public option becomes part of that mix, you'll have the whole deal covered by the government. That's why I'm against it.

I don't tend to agree. I don't think a public plan would necessarily out-compete private insurers and drive them quickly out of the marketplace.


Here's the best argument I've yet found in favor of a public plan. It comes from another recent Washington Post article, Democrats Weigh the Cost of Public Insurance. The gist of the argument emerges from this part of the article:

Many experts, such as Linda Blumberg and John Holahan at the Urban Institute, say a public plan is essential to fiscal responsibility in a country where health-care spending has soared to $2.4 trillion per year. A public option such as that proposed by House Democrats, with prices initially set at 5 percent above Medicare rates but well below private insurer rates, would inject competition into markets that are now oligopolies: An American Medical Association study found that a single insurer controls more than half the market in 16 states and a third of it in 38 states.

This competition, the thinking goes, would drive insurers to demand that medical providers find more cost-effective ways to deliver care, leading to innovations and the spread of well-integrated networks of salaried physicians in place of the costly fee-for-service approach that predominates today.

As it stands, insurers can pass along rising medical costs in the form of higher premiums. But with a public option in the mix, providers would work with insurers to lower costs to keep the private insurers from going out of business. Providers would probably have little choice but to accept the public option but would not want it to gain too much of the market. Medicare does not offer this competitive dynamic because it covers only the elderly.

"We know [insurers and providers] have the ability to lower costs, but if there's no incentive, what motivates them?" Blumberg said.

The economists in this camp say a public option would not underprice insurers so aggressively as to drive them out of business — political pressures from medical providers would restrain Congress just as it is restrained today from limiting Medicare rates too much. Private insurers could still compete on service and would benefit from their deep ties in local markets.

But the public plan would produce savings, they say. The Congressional Budget Office estimates that the House's public option would save $150 billion over the first 10 years. Without it, these economists say, the government would have to save money by cutting subsidies to the point that people would be unable to afford the coverage that they're required to buy.

"If you say we're not going to fight over this, then where is the cost containment?" Holahan asked.

In short: the public plan would facilitate, rather than endanger, health-care cost containment. By fostering competition with respect to insurance pricing, it would help, not hinder, the bending of the cost curve down for health-care services.

If Blumberg and Holahan of the Urban Institute are right — and this is the biggest if in the whole debate, I think — the public plan would not do what Senator Graham fears it would: so undercut private health insurers on price that the latter would soon have to fold.

With competition from a public plan, however, private insurers would insist that doctors, hospitals, and other health care providers change how they do business. There would, I repeat from above, be "well-integrated networks of salaried physicians in place of the costly fee-for-service approach that predominates today."


Now, what worries me most about this rationale for a public plan is that those "well-integrated networks" would also save money for the government-run option, no? If fee-for-service approaches tend to drop out of the picture with respect to private insurance, would they not disappear for public insurance as well? The costs of the latter would go down, just as would those of the former, and the price advantage of the public plan (which has lower advertising and underwriting costs) would stay the same.

If that weren't so, then how would "the House's public option ... save $150 billion over the first 10 years"? If private insurers, working with health care providers, tamped down the entire cost structure for health care in America so as to allow themselves to compete effectively with the public plan, would that in itself generate the vaunted $150 billion in savings?

To try to answer that, I downloaded and read Is the Public Plan Option a Necessary Part of Health Reform?, by Holahan and Blumberg.

This report concedes that:

... the concern is that it [the public plan] would eventually eliminate the private insurance market. The Lewin Group provided an analysis that showed that if all Americans were eligible to join the public plan and if the public plan paid current Medicare rates, 131 million people would join the public plan ... . Of these 131 million enrollees, 119 million would have moved from having prior private insurance. This result has received enormous attention.

But then it adds:

But the Lewin study also showed that if rates were set halfway between Medicare and private plans and only small firms, self-employed, and individuals were allowed to join the plan, only 31.5 million would be in the public plan with 21.5 million of those having prior private coverage.

So, why would private insurers not just collapse? One reason would be that those people whose relatively large-sized employers (with payrolls over 50) now provide them with health insurance could not, apparently, join the public plan. Another is that private plans would continue to offer enrollees more generous benefit packages (albeit at premium rates somewhat higher than the public plan).

Here's how I read all that: Clearly, a public plan would have to be exquisitely calibrated and fine-tuned. If it didn't, for example, limit access to "small firms, self-employed, and individuals" and if it didn't set rates halfway between Medicare and private plans — if it set them significantly lower, that is — the first Lewin Group scenario would become the more likely one. Well over 100 million might move from private insurance to the public plan, and private insurance would be a goner.

On the other hand, if the public plan restricted access too much and set its premium rates too close to those of private plans, the anticipated cost savings would vanish, because there would wind up being little or no price competition between the public plan and existing private plans. There would be nothing to force the latter to get care providers to restructure away from gilt-edged fee-for service ways of doing business.

Like the bowls of porridge in the Goldilocks story, the public plan would have to be "just right," in terms of its design, or the Holahan-Blumberg argument would fall apart.


Then there's the question of whether a public plan would stay "just right."

Senator Graham and other opponents of the public option clearly feel it would not. Specifically, they think there would be irresistible pressure on politicians, on down the road, to liberalize it. The argument would be, if setting public-plan premiums above Medicare but below private plans saves X dollars, why not save even more by lowering public-plan premiums? If access to the public plan, currently restricted to certain groups, were widened, wouldn't even more people get health care at lower cost?

Taken to an extreme, such a dynamic might wind up killing private health insurance after all.

But I ask this: would that be such a bad thing?

Remember, the argument I presented in favor of the public option is that it would, by indirect means having to do with price competition in the insurance sector, compel restructuring of how health care is provided to everyone, whether publicly or privately insured. Once that work was done, presumably pricey fee-for-service arrangements would have bitten the dust once and for all. In their place would be "well-integrated networks of salaried physicians" working cooperatively as teams whose recompense would be based wholly on results. At that point, what would be the objection to the virtual death of private health insurance?

Sen. Graham and less moderate critics of the public option have charged that the public option is a stalking horse for having everyone covered by a government-run insurance plan — a single-payer system by any other name.

Well, yes. There seems to be good reason for supposing that. But is that such a bad thing?


Once we are over the hump of restructuring how health care is provided — how doctors, hospitals, clinics, etc. do their thing — we would presumably see vast dollar savings.

For one source of savings, there would be a lot fewer expensive MRIs. Here, from Focus on Health Savings Obscures Other Issues in a recent Washington Post, is an example of why:

It took Virginia Mason Medical Center in Seattle "eight years of very difficult, challenging work" to wring tens of millions of dollars in waste out of its system, Chairman Gary Kaplan said.

In one case, Virginia Mason teamed with Starbucks to re-engineer treatment of lower-back pain, the No. 1 medical expense for the coffee company. By offering physical therapy on the front end, doctors reduced the number of costly MRIs from 35 percent of patients to less than 5 percent. And the vast majority of baristas who once endured 66 days of exams, tests and waiting now return to work within 48 hours.

"The insurance company does better, the employer does better, the patient does better," Kaplan said. "The only entity that doesn't reap the benefit is Virginia Mason, because the only thing that was really profitable was the MRI."

The pressure that a public plan would put on private insurers to pressure health care providers to bite the bullet and find profit centers other than MRIs would radically change the way medicine is practiced ... and patients would (despite the fears they have now) wind up loving it. Who, after all, would prefer 66 days of exams to getting back to work in 48 hours, with no uncomfortable MRIs along the way?

But once the restructuring happened, once the dollar savings materialized, why would private insurance options (other than fur-lined luxury plans for the rich) still need to exist?

My guess is that they wouldn't, that in the long run, a public option today would indeed become a single-payer system tomorrow ... and that that's a good thing!

Climate Riddles and Perplexities

Herein, a potpourri of recent news stories, op-ed pieces, and editorials from The Washington Post re: climate change.

For Senate, a Climate of Competing Interests appeared as a news story on Tuesday, August 4, 2009. By Steven Mufson and David A. Fahrenthold, Post reporters who cover the environment and related economic issues, the piece touched on the views of upcoming climate legislation being taken by various key U.S. senators and the lobby groups trying to influence them. "The House climate bill ... ballooned to 1,427 pages, stuffed with compromises that benefited industries from corn to coal," the article says. Now, the same lobbies that puffed so much air into that huge House balloon want it inflated even more in the Senate. Is that any way to run a bicameral legislature? Apparently, yes.

August 2 saw the editorial Warming Relations, subtitled "Despite lingering disagreements, the U.S. and China are making noteworthy progress on climate change," in which The Post's editorialist wrote about the upcoming-in-December multinational talks on climate change in Copenhagen, Denmark. If key countries — read, the U.S. and China — can finally agree to terms, a Copenhagen-engendered new accord could replace the 10-year-old, soon-to-expire Kyoto Protocol (which those two countries never signed).

Which leads this blogger to wonder: what is the rationale for our passing a climate bill in advance of Copenhagen? If Copenhagen puts tighter strictures on greenhouse-gas emissions than the U.S. bill does, the bill would have to be reworked. If it doesn't, then both the bill and the Copenhagen accord would, I would think, need to be reworked.

I've already covered (in Kathleen Parker: "Clean Energy Bill Won't Move Us Away From Foreign Fuel Sources") that columnist's August 2 revelation that "the reductions in oil consumption already required by [recently enacted] CAFE and biofuels bills may exceed for many years the requirements of" the House bill that would ostensibly, but not actually, reduce greenhouse emissions from America's tailpipes.

My take on that: the House bill does a lot (but not enough) to cut down on emissions from U.S. smokestacks. Moreover, through so-called "carbon offsets," it provides (in the words of the Mufson-Fahrenthold article) "programs that allow farmers to be paid for no-till agriculture that keeps carbon in the soil" — though senators like Iowa Democrat Tom Harkin want yet more leniency along those lines. But in my opinion and that of Parker tailpipe emissions from powering cars with gasoline and trucks with diesel fuel aren't reined in enough.

That's why I question What Palin Got Wrong About Energy, the July 24 op-ed piece by leading U.S. senators Barbara Boxer (D-Calif.) and John Kerry (D-Mass.), when they say that "clean energy legislation ... works to find alternative solutions to our costly dependence on foreign oil ... ." If Parker is right, the House bill doesn't really do that. (We'll see if the eventual Senate bill does.)

Boxer and Kerry were taking umbrage with an earlier (July 14) opinion piece by resigned Alaska Gov. Sarah Palin, a Republican who may be angling for a presidential bid, who wrote in A 'Cap and Tax' Dead End that "President Obama's cap-and-trade energy plan ... is an enormous threat to our economy." Her reasoning: cap and trade would supposedly put a huge crimp in the "abundant, affordable energy" that Americans have always relied on for prosperity, opportunity, and security. Palin writes, "Job losses are so certain under this new cap-and-tax plan that it includes a provision accommodating newly unemployed workers from the resulting dried-up energy sector, to the tune of $4.2 billion over eight years. So much for creating jobs."

The best argument against her position — and I am against it — comes from John Doerr and Jeff Immelt, writing in the August 3 Post opinion pages. Doerr, a financier, is a partner in the venture capital firm Kleiner Perkins Caufield & Byers, and Immelt, a corporate executive, is chairman and chief executive of General Electric. In Green Tech Needs a Green Light they give their scenario for jump-starting a new, clean-energy economy:

1. Send a long-term market signal that low-carbon energy is valuable, by putting a steadily increasing price on carbon emissions.
2. Give electric utilities economic incentives to switch to renewable electricity; mandate that a certain percentage of their power generation come from renewable sources such as wind and solar; build a unified smart grid to distribute clean electric power nationwide.
3. Set energy-efficiency standards that grow steadily stronger.
4. Have the federal government spend much, much more than it now does on funding clean-energy research and development.
5. Institute "a robust trade policy" that will make us "the world's leading exporter of renewable energy."

This blogger has yet to run into any detailed explanation of why Item #1, a steady, reliably increasing price on carbon emissions, which a cap-and-trade system would bring about, wouldn't be enough, all by itself, to push us into a clean-energy future. Okay, I see that Item #5, "a robust trade policy," would also help, and that the "smart grid" of Item #2 might need federal kick-starting. But why federal incentives, mandates, standards, and R&D funding are necessary to get clean energy "to scale" beats me. One would think a tight cap on carbon and the price mechanism that the "trade" aspect of "cap and trade" would bring about would send greenhouse-gas emitters scurrrying to the providers of clean energy, without any further help from Uncle Sam.

Such details aside, clearly a well-crafted climate policy would make new jobs for Americans, bigtime. But, admittedly, it's a riddle and a perplexity whether the 1,427-page House bill would, on net, constitute such a policy.

Also a riddle and a perplexity is whether the "Cash for Clunkers" program helps or hurts the environment. Gwen Ottinger says the program, which pays consumers to buy new, fuel-efficient cars to replace aging gas guzzlers, hurts. In her August 4 op-ed article When the Clunker Is Greener, Ottinger, a program researcher in environmental history and policy at the Chemical Heritage Foundation's Center for Contemporary History and Policy in Philadelphia, points out that it would have been greener for the government to allow clunkers to be traded in for, say, a used 2001 Toyota Prius hybrid. It "gets upward of 40 mpg, and even a 15-year-old Honda Civic gets 28," she writes, so why did the program insist on new replacements only? She adds:

By assuming that only new products can be environmentally friendly, these policies lead us to discount the environmental gains that could be made through well-established and low-tech means, such as smaller refrigerators. They also reinforce the idea that all products, even "durable goods," quickly become obsolete — a notion that leads to overwhelming amounts of environment-despoiling waste.

Or, better still, why not encourage car owners to just drive their clunkers into the ground? She notes:

... even when new cars and appliances are more efficient than the ones they replace, the act of replacing them entails environmental costs not accounted for in the stimulus programs. Building a new car, washing machine or refrigerator takes energy and resources: The manufacture of steel, aluminum and plastics are energy-intensive processes, and some of the materials used in durable goods, especially plastics, use non-renewable fossil fuels as feedstocks as well as energy sources. Disposing of old products, a step required by most incentive and rebate programs, also has environmental costs: It takes additional energy to shred and recycle metals; plastic components often cannot be recycled and end up as landfill cover; and the engine fluids, refrigerants and other chemicals essential to operating products end up as hazardous wastes.

The Mountain at the End of the Trail

The late biologist Robert Zahner (click on his picture at right for more about him) wrote, in his elegant, elegiac book The Mountain at the End of the Trail: A History of Whiteside Mountain, of a Southern Appalachian mountain that loomed large in his life.

Like so many things in Nature, Whiteside Mountain has been despoiled and reclaimed. But when it was made into a National Forest in the mid-1970s (as part of the Nantahala National Forest) bureaucrats insisted on installing handrails, to preclude lawsuits. Zahner wrote (pp. 99-100):

I have never been able to accept all those handrails. True, some are necessary at dangerous cliff edges, with the visitor load at over 1,000 per day and many of them children. Even I now feel comfortable at the tip of Fool's Rock, surrounded by handrails. Of course, the railings do no protect the foolhardy. In 1976, one year after they were installed, a young man climbed over the rails at a precipitous spot, lost his balance, and fell to his death.

I admit that I too have climbed over the railings. In several of my favorite places these steel and wood rails are constructed in such a manner as to obstruct completely the magnificent view where one sits down to rest and perhaps enjoy a picnic lunch. In my opinion, which is probably contrary to that of the average visitor, these are not all dangerous places. So I simply climb over the fence and enjoy the view from the other side, much to the consternation of passersby, to judge from their whispered remarks.

One particular nook, located on the south side of the rock at the summit, adjacent to the chiseled elevation ["alt. 4930 ft."], is a very special place for a quiet meditation. During the years before the railings, especially on clear winter days, a person could snuggle into this south-facing nook, soak up the warm sunshine at high noon, gaze at the distant blue hills, and receive strength and comfort from this highest point on the mountain. How many had enjoyed the solace of this spot? How many dreams had been visualized here? How much distress had been healed here? The presence of many who came before could be felt in this spot. The railing has now rendered this special place unsuitable, indeed has destroyed completely its magic.

Therefore, in 1979 we requested that the Forest Service remove the railing surrounding the summit rock. We felt that there was no serious safety hazard here, as anyone slipping would slide only a few feet down onto the shrub covered rocks below. The request was denied, of course, because, as the agency replied, "We have had experiences in costly settlements as a result of safety precautions we failed to make. It is clear in law that where we invite the public to come and recreate we assume an obligation for their safety." Next time you visit the summit of Whiteside Mountain, find the little nook, sit in it, and judge for yourself whether the safety issue outweighs the values of the view (now obstructed) and of the special energy of the very summit of the mountain.

That, writ small — if Whiteside Mountain can be called small — encapsulates what ails us today. We spare no effort to defang the sublime, and then wonder why citizens treat Nature as something to be "done" in the same way a theme park is to be done.

(What, by the bye, is Fool's Rock, you may ask? To find out, you'll have to find a used copy of this out-of-print gem. Or, try for an inter-library loan if your library, as is probable, doesn't have the book.)

Kathleen Parker: "Clean Energy Bill Won't Move Us Away From Foreign Fuel Sources"

Columnist Kathleen Parker writes in "Clean Energy Bill Won't Move Us Away From Foreign Fuel Sources" that the Waxman-Markey climate bill recently passed by the House and now awaiting Senate passage of a similar bill won't actually help reduce our dependence on foreign oil. So it won't help our security situation vis-à-vis the Middle East.

"The more we cap our carbon," writes Parker,

... the happier the Saudis are. That's because most Middle Eastern crude is more easily accessible and requires less processing than what we and our friendlier neighbors [such as Canada] can produce. ...

Basically, the energy bill focuses primarily on stationary sources of carbon dioxide emissions (power and manufacturing plants) and would do little to address mobile sources of emissions, i.e. transportation. ...

Although the bill would put refined gasoline consumption under the cap along with coal, natural gas, etc., the baseline for counting reductions is 2003. The reductions in oil consumption already required by [recently enacted] CAFE and biofuels bills may exceed for many years the requirements of Waxman-Markey.

CAFE is "Corporate Average Fuel Economy" for automobiles. Under current law, car fuel ecomony has to be increased by the automakers by about 30 percent.

A recently passed biofuels bill, meanwhile, "requires the blending [into gasoline] of 36 billion gallons of biofuels ... or about 20 percent of total liquid fuel consumption."


That the House bill won't bring down our usage of gasoline and other fuels that derive from petroleum comes as a shock.

Again, the problem seems to be that the House bill doesn't tighten existing CAFE and biofuels legislation. By setting the baseline for capping carbon emissions from transportation as late as 2003, Waxman-Markey fails to put the squeeze on those emissions until years down the road, when the emissions cap finally becomes a shoe that actually pinches some petro-toes.

This blogger feels that setting up the House bill that way may have been one of those ploys necessary to getting the bill passed. Legislative sausage-making is never pretty.

On the other hand, in earlier posts in support of the House bill, such as Thomas L. Friedman: Just Do It, I certainly failed to indicate (because I didn't know) that the bill won't in and of itself reduce carbon emissions from transportation fuels for a good long time.

Now that I know that, I realize what one of the reasons why the House bill won't cut U.S. greenhouse emissions by any more than 17 percent below 2005 levels is: it won't bring down the use of fossil-derived gasoline and diesel fuel any further than existing CAFE and biofuels laws already would have, all by themselves.