Does Sen. Murkowski Really Understand Clean Energy Policy?

June 21, 2010 12:55 pm ET — Alan Pyke

Sen. Lisa Murkowski (R-AK) cultivates a reputation for being that rarest of Congressional creatures: a Republican who believes in climate change and clean energy. It's a tough sell; Murkowski has taken a million dollars in funding from the oil, gas, mining and utilities industries in her political career.

Still, she is among the GOP's leaders on energy policy. Even when she introduces an "obscure" resolution to gut the Clean Air Act and reverse the EPA's finding that greenhouse gases are dangerous, one assumes that Murkowski has a grip on the basic principles of clean energy legislation.

But her tenuous grasp on energy policy evaporated completely on Sunday. Murkowski does not understand the difference between cap-and-trade legislation — which would harness the power of markets to steer our energy economy to greener pastures — and "command-and-control" regulations that restrict commercial behavior.

Murkowski's foul-up came on CNN's State of the Union:

SEN. MURKOWSKI: Well I think you've got too many people who are looking at this and saying, a cap and trade, a command-and-control type of a system, at a time like we are in right now, with, with, with recession, and a— just a very difficult economy, when we put mandates on and say, you will do thus, we're gonna drive jobs overseas, we're going to— we are going to harm the economy at a time when most of us do not think that that's the appropriate policy.

Murkowski is, of course, very wrong about the economic impacts; Democrat-sponsored cap-and-trade legislation would create millions of jobs at a minimal cost.

But there is a more fundamental foolishness in Murkowski's statement. Cap-and-trade is not a "command-and-control type of system." It is the opposite.

Command-and-control means telling businesses what they can and cannot do, with fines levied to enforce desirable behavior. It is the kind of regulatory action that Republicans hate because it makes our markets less free.

Cap-and-trade legislation is a system of economic incentives. Democrats want to set goals for emissions, and allow companies to buy and sell carbon permits in a marketplace. The idea is that government nudges the free market toward a desirable outcome — cleaner air, slowing the greenhouse effect, and shrinking the pile of money we send to our oil-rich adversaries — by using the power of markets themselves to find solutions.

If Sen. Murkowski does not understand that cap-and-trade is a market-based approach to the problem, then she needs to stop pretending to be serious about clean energy.