Matt Yglesias writes

Back in 2008 both Barack Obama and Hillary Clinton and John McCain and Mitt Romney all seemed to agree, in principle, that it ought to be a high priority to enact some kind of binding limit on American greenhouse gas emissions. Even given that, the path to a binding workable global agreement was clearly frought with peril since there’s a divergence of perspectives between newcomers to the high emissions party (China) and those who’ve been there a long time (United States). But in the intervening three years, the politics of this have been totally transformed in a way that’s not even slightly backed up by the scientific information that’s come in over this time. Instead of debating whether or not emissions will be limited or reduced, we’re debating the Keystone XL pipeline as a kind of proxy war over fossil fuels.

What’s changed is whether or not the debate matters. To back up a bit more, in 2006 it would have been easy to suggest that:  look its probably impossible to alter the general trend line on global emissions but there is some damage associated with carbon and so it makes sense to tax carbon rather than to tax things we like such as work and savings.

As a bonus, this might speed up the arrival of wind or solar as a major player and that indeed might have some real upside effect.

Since that time the workability of this type of mild, tax-carbon-instead-of-work scheme has seemed to fall apart. We got a complicated mess in Waxman-Markey and even that couldn’t pass the Senate, with what looked like a favorable ideological make-up.

Thus failing compromise, the politics has mutated into pro and anti fossil fuel camps. Even this, however, could have been considered a sideshow, until recently.

Its is now becoming rapidly apparent that economic future for fossil fuels is much brighter than we would have suspected a few years ago. In particular, North America looks to be in a position to earn enormous rents from fossil fuel production.

Moreover, this comes at precisely a time in which interest rates and aggregate demand are very low. Large scale structural projects with multi-decade high rent payoffs are exactly the type of thing you need in this situation. And they are coming to us on a platter.

Thus, the nature of the signal changed.

In 2006 supporting, in theory, a carbon tax was a signal that you believed the science on climate change. In 2011, pushing for the Keystone Pipeline is a signal that you value US industrial production over symbolic statements about the importance of climate change.

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