Chicken or Egg - - Health Care or Climate Change?

President Obama, who will personally participate in the Copenhagen climate talks this week, said last Sunday that he expects to get a health care bill on his desk before Christmas. The barriers to meeting that deadline may revolve around the answer to an age-old question: which comes first - - the health care chicken or the climate change egg?

Senators who were previously close to signing onto his health care package are hesitating for several reasons, but most of them revolve around cost. That’s not just  worry about the overall price tag, but also a question of how much Congress should set aside in the American family budget for putting a price on carbon at the same time. If businesses (and consumers that buy products from those companies) will all soon pay more for health care, can they also afford to pay more for gasoline and electricity?

Set aside the fact that we already pay for the 50 million people in the US with no health insurance, but do so through emergency rooms and acute problems that could have been solved sooner/cheaper if those patients had been covered by health insurance. Set aside that we pay for carbon pollution already, in terms of higher health care costs, defending oil around the globe, and the impacts of climate change to name a few of the costs, but we don’t make those payments at the gas pump or electric meter. Let’s stipulate that transitioning to a more transparent, logical system of paying for these things might actually save money, but will be a shock to consumers in the near term as the payer/payee balance shifts.

Because of that potential short-term shock, it appears that US climate negotiator Todd Stern has made belligerent noises about China, not because he doesn’t think a deal can be struck, but to send a message to Congress that we won’t sign a deal that imposes a high cost for carbon right away. But without knowing the future cost of carbon, Congress may be reluctant to pass a costly health care bill - - and vice versa.

During the Bush administration, it was a game between the US and China of “you go first” which has now been replaced by a domestic US game of “which comes first?” China has also balked at accepting international standards for verifying carbon reductions. How can Obama break this carbon Gordian Knot? It’s actually very easy.

Obama should say in Copenhagen that he agrees with China, that no country should tell another country how to manage its domestic matters and that he can’t object to their refusal to allow third-party carbon inspectors in Chinese factories and power plants. However, because the US market won’t accept products of uncertain provenance - - say, like dog food, that might contain melamine, or kids toys that might contain lead - - we won’t be buying carbon credits from any country that doesn’t have generally accepted verification protocols in place. Instead, the US will set up a cap-and-trade system that allows companies to buy carbon credits (to offset their emissions), but only from domestic sources. That will pump billions into making US factories and powerplants more efficient - - and the products they produce actually cheaper - - and put hundreds of thousands of Americans back to work making, marketing, and installing the new low-carbon technologies.

It will also create exports as our products become less costly than before and as we export the technology developed, to reduce carbon from our own buildings and industrial base, generating tax revenues that will help state and federal treasuries. More efficient; cheaper; slash unemployment; raise revenues - - sounds like a way to pay for health care and carbon simultaneously. It would also take China off the table as an excuse for Congress to avoid taking action to reduce our own carbon footprint.

Whether you celebrate Hanukah, Christmas, or other holidays at this time of year, they all seem to revolve around miracles. Solving the chicken-egg conundrum of health care and climate change would be a very nice miracle for this holiday season.

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