Carbon cap-and-trade legislation appears to be Dead Policy Walking in Washington. The devaluation of the Copenhagen climate summit – now the goal is a “politically binding” rather than a “legally binding” agreement — reflects the emerging political reality in the United States. Yes, a bill did pass the House of Representatives in June. Also, the Senate Environment and Public Works committee passed a version earlier this month. So President Barack Obama won’t go to the talks in Denmark with empty pockets next month.

Publicly, Senate Democratic leaders say they are only pushing off debate and consideration of a comprehensive climate change bill until spring. But it is hard to get a major bill passed in a Democrat-controlled Senate when the Democratic majority leader of the Senate wants the bill to go away. And have no doubt that Senator Harry Reid would like to see cap-and-trade go away — or at least disappear until after 2010.

This explains why six different Senate committees will consider the bill, the same recipe for legislative inaction that bogged downhealthcare reform. It’s pure politics. The 2010 midterm elections are shaping up to be tough contests for many Democrats thanks to the anti-incumbent mood of a recession-weary electorate. And most signs point to a sustained level of high unemployment.  As Federal Reserve Chairman Ben Bernanke said in a recent speech, “The best thing we can say about the labor market right now is that it may be getting worse more slowly.”

A new Gallup poll finds that 51 percent of Americans see the weak economy or high unemployment as their biggest concerns. Barely 3 percent mention the environment. And Democrats have been unable to sell cap-and-trade as a job creator. At worst, the public sees it as a jobs killer or a costly energy tax. That charge has particular weight in Reid’s home state, Nevada, a high energy-use state. (All those air conditioners!) So Reid doesn’t want to have to vote for it, which he would be compelled to do as majority leader. And neither do moderates like MaryLandrieu, Blanche Lincoln, Mark Pryor, Debbie Stabenow and Jim Webb. They noticed the heat that centrist House members who voted for cap-and-trade took from constituents during Congress’ summer break.

Webb of Virginia may point to one path forward with a new bill he is co-sponsoring with Lamar Alexander, a Tennessee Republican. It would spend $20 billion on five mini-Manhattan Projects to study various clean energy technologies, including nuclear.

It’s a plan that seems more likely to create jobs, grow the economy and help the environment — at least more so than one completely out of sync with the electorate. And it is one also more likely to make it into law. Despite being subjected to years of hectoring from the media, entertainment industry and government, the American public clearly has no appetite for any climate-change plan that involves more taxes, more regulation and a possible lower standard of living.

And if cap-and-trade is dead for 2009 and 2010, it probably has little hope of reviving in 2011 or beyond when Congress is unlikely to be as Democratic or as green.

Some of the best things I read today:

1) Tyler Cowen gives his version of healthcare reform. Ideas 3-10 are particularly strong.

2) Noam Scheiber agrees with Summers that budget deficits are not a big deal since less private borrowing mean no crowding out. I wouldn’t get too satisfied with this explantion.

3) IBD’s Jed Graham has  great post that speculates “come 2013, we might begin to see help wanted ads that emphasize the lack of employer-provided insurance as a perk.”

4) Matthew Yglesias looking how Republicans will try to roll back HC reform if it ever passes. The delayed-start will make this easier.

5) Joel Kotkin again show how California is doing everything wrong to boost growth. Just look at Northern California:

Indeed by some accounts, most embarrassingly in a recent Time magazine cover, the shift to green technologies has already created a “thriving” economy.

Time extols Google, Apple, Facebook, Twitter and the other Silicon Valley companies as exemplars leading to a glorious prosperity; somehow the article missed the empty factories, vacant offices and abandoned farms across the state.

For Apple’s Steve Jobs, Google’s Eric Schmidt and venture capitalists connected to Al Gore, these could well be the best of times. Fed policy prints money for investment bankers to speculate; stock prices rise as people have nowhere else to invest. And for the much celebrated venture community, there’s also an Energy Department that pours hundreds of millions into “green” start-ups that build things like expensive electric cars.

California’s high-tech greens may talk a liberal streak in terms of diversity and social justice, but their prescriptions offer little for those who would like to build a career and raise a family in 21st century California. Their policies in terms of land use regulation and greenhouse gas emissions will make it even harder for existing factories, warehouses, homebuilders and other traditional employers of the middle- or working class.

Yet the “greenest” parts of the country–places like the northern end of the Bay Area–are among the toughest places to build or manufacture anything, without huge public-sector subsidies. Indeed, California’s new green requirements, compared with places like Texas or China where manufacturing has other advantages, would further undermine an already struggling sector. Few businesspeople see much growth in the near future in office or residential construction.

OK, here is the USCOC’s basic position on climate change from recent congressional testimony:

The Chamber supports the goals of the Committee to lower concentrations of greenhouse gases in the atmosphere, become more energy efficient, and incentivize “green” energy technologies. The Chamber does not categorically support or oppose approaches such as cap and trade or carbon tax, but rather measures all climate legislation on a bill-by-bill basis against five core principles: any legislation or regulation introduced must (1) preserve American jobs and competitiveness of U.S. industry; (2) provide an international solution that includes developing nations; (3) promote accelerated development and deployment of greenhouse gas reduction technology; (4) reduce barriers to the development of climate-friendly energy sources; and (5) promote energy conservation and efficiency.

Me: One reason so many news organizations got suckered by yesterday’s phony press release is that it seemed pretty plausible that the Chamber would come out in favor of a carbon tax.  Plenty of pro-market folks have come out in favor of such a plan, especially if it was revenue neutral, perhaps offsetting payroll taxes.

As usual, Joel Kotkin nails it:

In a rapidly aging society like Germany’s and those of other E.U. countries you can make a case for slow growth, limited work hours, early retirement and a strict regulatory regime. But for America, with its growing workforce and population, slow economic growth simply is not socially sustainable.

More broadly, we are talking about two different mindsets. As one writer puts it, Europeans “emphasize quality of life over accumulation” and “play over unrelenting toil.” In contrast, most Americans seem ill-disposed to relax their work ethic, which has been central to the national character from its earliest days.

Of course, the European approach is celebrated by some Americans, particularly those who already have achieved a high level of affluence. It plays very well in “little Europes” of America, cities like San Francisco, Portland and Boston, places with relatively few children and generally slow-growing populations.

Me: I wonder if eventually US political parties break down to a pro-growth, pro-family, pro-population party and a “sustainable,” growth, Euro-lite party.  Certainly, there are elements of the Democratic party which would fit into either.

Mitt Romney attacks cap-and-trade via video over at his PAC website, Free and Strong America. He basically portrays it as an energy tax on Americans (which it is) that will hurt American competitiveness vs. India and China (which is it will.)

But, more interestingly, he makes is clear that does believe in climate change (which the conservative talk radio crowd generally does not).  And you can be sure his campaign for president will have a more expansive energy policy than just “drill, baby, drill.” During his last run, Romney told me he was certainly willing spend many billions on government investment in alternative energy and other new energy technologies. That’s right, government spending — though I am sure venture capital would play a huge role as well.

Working for the International Energy Agency must be hoot. Where else can you recommend a $10 trillion investment and kinda-sorta be taken seriously? From the WSJ:

The IEA, energy adviser to the world’s richest nations, urges more-aggressive reductions in carbon emissions than what many nations are currently planning. In the report, to be released Tuesday, the IEA calls for investment — in clean-energy initiatives such as solar power, new nuclear plants and other measures — of $500 billion a year over the next 20 years.

That is 37% more investment than what the IEA estimated was necessary just a year ago. Some analysts put the current level of investment in clean energy at around $100 billion a year.

And this is my favorite line in the story:

The IEA’s projections, though sometimes seen as overly ambitious, are generally regarded as relevant guideposts for the energy industry.

OK, so the White House has greenlit the EPA to go forward with new rules, as the NYTimes puts it,  “to regulate greenhouse gas emissions from hundreds of power plants and large industrial facilities.”  I think this lobbyist quotes in the article gets the politics right:

Scott Segal, a utility lobbyist with the law firm Bracewell & Giuliani in Washington, said the rule should not be used to rush Congress into passing a poorly drafted bill.

But he also said that the proposal “strengthens the president’s negotiating hand in Copenhagen.”

“Even if the Senate does not act,” Mr. Segal said, “he can legitimately say to other nations, ‘We are taking action on a unilateral basis. What are you doing?’ ”

The great Dan Clifton of Strategas Research hears the same thing I am hearing:

We continue to believe the Senate does not have 60 votes for a meaningful cap and trade bill and today’s events are largely designed to keep the process moving. With healthcare taking up so much of the calendar and financial regulation to follow, cap and trade is now squarely put into the election calendar. Should something pass next year, we expect the legislation to a be a stripped down energy bill (as opposed to cap and trade) and that will feature a Renewable Portfolio Standard and possibly easing of approval for transmission lines.

My new favorite blog, New Geography, does a fine piece of analysis that reveals why 80 percent cuts in climate change emissions are a fantasy without a radical technology breakthrough:

According to a recent poll by Rasmussen, slightly more than one-third of respondents (who provided an answer) are willing to spend $100 or more per year to reduce greenhouse gas emissions. About 2 percent would spend more than $1,000. … If we do a rough, weighted average of the Rasmussen numbers, it appears that Americans are willing to spend about $100 per household per year.  … At $100 per household, it appears that Americans are willing to spend on the order of $12 billion annually.

At $100 per household, Americans are prepared to pay just $2 per greenhouse gas ton removed. All of this is in a policy context in which the United Nations Intergovernmental Panel on Climate Change suggests that $20-$50 per greenhouse gas ton is the maximum that should be spent per ton. The often quoted McKinsey/Conference Board study says that huge reductions in greenhouse gas emissions can be achieved at $50 or less, with an average cost per ton of $17. International markets now value a ton of greenhouse gas emissions at around $20. At $2 per ton, American households are simply not on the same “planet” with the radical climate change lobby as to how much they wish to spend on reducing greenhouse gases.

The man who will almost certainly become Japan’s next prime minister, Yukio Hatoyama, is promising to cut the nation’s greenhouse gas emissions by 25 percent from 1990 levels by 2020.

That is a far more ambitious target that can be found in the legislation currently making its way through Congress. The cap-and-trade bill passed by the House of Representatives would trim U.S. emissions by 17 percent from 2005 levels. That translates to around a 6 percent cut from 1990 levels.

But even that lesser reduction seems unlikely to happen anytime soon. Climate change legislation faces a tough road in the Senate, and it may get pushed back to 2010 or beyond.

Cap and trade is, like healthcare reform, in trouble, and for many of the same reasons:

- There doesn’t seem to be an acute crisis. Polls show that the vast majority of Americans are satisfied with their healthcare. Reasons for complacency can also be found in recent developments in climate change. A new NASA study notes global temperature increases have stalled out this decade, likely because of decreasing solar irradiance.

Obviously some dire event, such as a terrible swine flu season or a brutal spike in temperatures, could refocus public attention and concern. But for now there doesn’t seem to be an emergency to motivate either voters or lawmakers.

- Most people won’t see an immediate benefit. Proposed changes in the U.S. healthcare system wouldn’t immediately change the current insurance coverage of most Americans, despite new government spending and higher taxes. Likewise, cutting carbon emissions will likely incur big costs today with any tangible benefits coming later this century. During a recession, neither provides the sort of cost-benefit analysis that strapped Americans are likely to find compelling.

- Both plans seem off point. If you asked Americans what was the biggest problem facing America, polls show, the most common answer would probably be unemployment rather than healthcare or the environment. And that is one problem, at least as gauged by the unemployment rate, seemingly getting worse rather than better.

To quote the man who jumped from a burning airplane with no parachute, “First things first!” Americans seem to agree.

Given a possible weak economic recovery and worker anxiety about jobs, neither a strong cap-and-trade climate change bill, nor a carbon tax bill, may happen anytime soon.

Instead, a better option might be more government-funded research into technological fixes. The Bjorn Lomborg-led Copenhagen Consensus recently released a list of proposals — such as marine cloud whitening and carbon storage — that could give more bang for the buck than new regulation and taxes.

If politics is the art of the possible, new green technology may be all that environmentalists can realistically expect from America.