THAT the Chicago Board of Trade is about to introduce a secondary-market system to trade in air-pollution permits does not sound like good news for the environment. But it may be just that. More important, tradable permits are an example of enlightened leadership taking public discourse outside the usual false choices of American politics.
Tradable permits, regulations for which were proposed last month by the Environmental Protection Agency, are part of the Clean Air Act. The idea is to harness market forces to cut emissions of sulfur dioxide, the main source of acid rain. Utilities would be granted permits, each one good for one ton of sulfur dioxide a year. No utility would be allowed to discharge more than it had permits for, and overall emissions are to be cut.
To expand, a utility would have to buy more permits; increased demand would drive the price of permits up. More efficient utilities could reduce their emissions - by new scrubbing technologies or whatever - and then make money by selling permits for more than they spent on scrubbers. Speculators, meanwhile, will be able to buy and sell permits.
Tradable permits are the first major success of a bipartisan congressional study issued in December 1988 called ``Project 88: Harnessing Market Forces to Protect Our Environment - Initiatives for the New President.'' That tradable permits have been called a ``brainchild of the Bush administration'' illustrates the adage about success having many fathers.
But Project 88 was chaired by Sens. Tim Wirth (D) of Colorado and the late John Heinz (R) of Pennsylvania. Project director Robert Stavins of Harvard's Kennedy School of Government coordinated a team of about 50 from academe, government, business, and the environmental community.
The idea was to reframe the environmental debate, to distinguish means from ends, to unite rather than divide. Explicitly permitting certain levels of pollution was troubling to some, but the usual ``command and control'' model of regulation does the same thing.
Now the group has released ``Project 88/Round II: Incentives for Action - Designing Market-Based Environmental Strategies.'' As Stavins put it at a recent press briefing, the concept is ``technically solid and politically relevant approaches to bring market forces to bear on environmental problems.''
``Once you decide what your goal is, then you can use Project 88 kinds of tools to reach it,'' Senator Wirth added. He distinguishes between public-policy goals and the market mechanisms used to reach them. Too often, he laments, we get fixated on an ``arbitrary number,'' such as for fuel economy standards or whatever. ``The real issue is foreign oil.'' As negotiation gurus would put it, people get stuck bargaining for their position when they should be bargaining for their interests.
Round II identifies nine specific environmental problems and 12 market-oriented proposed solutions, ranging from ``pay as you throw'' municipal rubbish systems (more trash, higher fees) to an international market for greenhouse gas emission permits.
Because both major American parties have strong environmental traditions to draw on, the environment is the public-policy area perhaps best suited to this approach of reframing the debate to identify common ground rather than points of contention.
Project 88 should be good news to anyone reading the new book by E. J. Dionne Jr., ``Why Americans Hate Politics.'' His central argument is that ``liberalism and conservatism are framing political issues as a series of false choices. Wracked by contradiction and responsive mainly to the needs of their various constituencies, liberalism and conservatism prevent the nation from settling the questions that most trouble it.''
How different would our national political life be if, for instance, the energies aroused by the death penalty polemics could be redirected to the common interest both sides of that debate have in a swifter, surer system of justice?
Meanwhile, Wirth is lamenting the way his fellow Democrats have lost control of the agenda. ``There's the environment, education, health care....How can they say there are no issues? There's a great opportunity to empower and educate...''