Condoleezza Rice on Cap and Trade: It's Easily Abused

CondiRicesmallimage1The fact that former Secretary of State Condoleezza Rice, now a Senior Fellow at the Hoover Institution, isn’t a big fan of the current energy bill that passed the House on Friday is hardly a shocker. A cap-and-trade system can be “easily abused,” particularly on an international level, she said Monday at the Silicon Valley Energy Summit at Stanford University, where Rice is also a professor of political science, and that her own preference would be for a carbon tax, because it’s straightforward and can be easily understood.

Rice isn’t the only one that thinks a carbon tax would be better than a cap-and-trade system. Climate scientist James Hansen, as well as Al Gore (who supports the energy bill), and business leaders like Exxon Mobil CEO Rex Tillerson and Ralph Nader have also advocated a carbon tax, citing similar reasons.

Rice, who was on the board of directors for Chevron before she became Secretary of State and played a major role in the U.S.’s Kyoto negotiations, said that the cap-and-trade provisions in the Kyoto Protocol, which created a cap-and-trade system for many developed nations, were “ridiculous” and created circumstances where companies could trade credits for factories that they were shutting down anyway. A cap-and-trade system can be easily abused on a domestic level, she said, but on an international level that abuse can be 100 times worse.

In response to a question about whether she thinks the energy bill is bringing more credibility to the U.S. in the eyes of the international community as it approaches negotiations for a new climate treaty, she said that she thinks the U.S. is already “credible” when it comes to investing in research and development to fight climate change. When it comes to criticism from countries that say the House energy bill’s goals are too modest, she said that since some developed countries seem unable to meet the Kyoto agreements, some of the criticism is a case of “people living in glass houses throwing stones.” At the same time, Rice admitted that the Bush administration could have handled debate around Kyoto better (she was widely quoted at the time as proclaiming Kyoto to be dead).

Looking ahead to upcoming climate negotiations (the follow-up to Kyoto will be hammered out in Copenhagen this December), Rice said to she sees two issues that U.S. negotiators should watch out for: The first is the potential for the debate to over how to curb emissions from developing countries (China and India) without stifling economic growth to grow louder. That was one of the main reasons the U.S. walked away from the Kyoto Protocol. She also said it was important to make sure that any international framework doesn’t stifle innovation and creativity instead of contributing to it. For example, she said Europe’s agreement to ban genetically modified food (based on “false science,” she said) made it difficult for companies to produce these products and for that market to grow.


Comments have been disabled for this post