Did the White House just allow a massive climate change windfall?

I see that the Obama administration is indicating some flexibility on its climate change plans. Specifically, it might be willing to delay forcing businesses affected by a future cap and trade system to pay for carbon permits. Instead, an auction system would be phased in over time.

I used to think to accept anything less than a 100 percent auction of carbon permits was scandalous. As FP noted in September:

Cap-and-trade systems work by putting a ceiling on carbon emissions, and then allocating permits that give companies the right to pollute a given amount. From an environmental standpoint, it doesn’t much matter how you initially distribute the permits, as long as the cap is stringent enough. But most economists think that, unless you first auction these off in a transparent process, you’re basically enabling a massive corporate giveaway, raising the likelihood that well-connected corporations or industries will get sweetheart deals, and failing to capture revenue that can pay for other priorities.

I was disabused of this notion today by Stuart Eizenstat, a former diplomat who negotiated the Kyoto Protocol on behalf of the Climate administration. Eizenstat and I served on a panel this morning at the Carbon TradeEx America conference, a really interesting meeting devoted to exploring the future direction of climate change and its impact on policy, business, and, of course, the environment.

Eizenstat, who testifies frequently on Capitol Hill, was adamant that 100 percent auction was a nonstarter in Congress. There was no way, he said, that corporations would sign on to a climate change regime if they weren't given enough time to adjust to the costs they would incur.

That said, I wonder why the White House would want to signal flexibility this early in the game. Would it be tactically smarter to play your cards closer to your chest in the hopes of getting a better deal from industry in the end? Or is it wiser to try and get business on board from the beginning, so that the opposition doesn't have time to coalesce and build? Readers, what do you think?



Rush: Castro like "an old friend"

Opening up diplomatic dialogue with Cuba is one thing, this is another:

“It was almost like listening to an old friend,” said Rep. Bobby Rush (D-Il.) [after meeting with Fidel Castro], adding that he found Castro’s home to be modest and Castro’s wife to be particularly hospitable.

“In my household I told Castro he is known as the ultimate survivor,” Rush said.

For the most part, the Congressional Black Caucus's meeting with Castro seems to have been quite a lovefest. Fidel seems to have gotten a bit creative in his recollection of it, though:

In a statement following the meeting today, Castro said that the delegation had expressed to him that a segment of American society “continues to be racist,” and is at least partly to blame for the travel restrictions.

But the delegation this evening said those remarks were not expressed in the meeting.

“That did not happen,” Rep. Emanuel Cleaver (D-Mo.), told reporters.

Without in any way condoning the embargo or the diplomatic isolation of Cuba, the CBC's visit seems to have been about the worst way to engage the regime -- almost a parody of the way Barack Obama's campaign pledges of reaching out to hostile regimes was characterized as appeasement by his opponents.