Save the Planet, Save the Country

Since Franklin Roosevelt's triumphant assault on the Great Depression in 1933, the first 100 days of a presidential administration have held out the greatest opportunity for the officeholder to translate electoral success into historic accomplishments. Starting in January, therefore, President Barack Obama should act with the same swiftness and focus that Roosevelt used to ensure that America leads the world in the next Industrial Revolution: the green revolution.

The new administration will face three closely linked problems—a badly damaged economy, a dependence on imported oil and a rapidly deteriorating environment. That might seem too much to manage all at once, but the three are best dealt with together. The right policy to protect our planet is also the best policy to revitalize the U.S. economy—the real economy, not the paper one that went up in flames this past fall. The right policy to confront climate change is also the best policy to achieve energy independence and enduring national security. In other words, to meet all these challenges, Obama must attack them together, striving to do no less than transform the world's energy economy.

With seven words, he could strike a definitive blow for the forces of change: "America will cap its global-warming pollution." To make good on this promise, he must ensure that the U.S. Congress passes comprehensive, world-changing climate legislation that establishes a declining cap on carbon-dioxide emissions and creates a market for U.S. companies to profit from reducing that pollution.

A carbon cap would unleash America's greatest strengths—its spectacular capacity for innovation, its entrepreneurial spirit and the immense power of its markets and workforce. Hundreds of millions of dollars of venture capital have already flowed into the emerging technologies for capturing energy from the sun, wind, geothermal heat and biofuels, and for making more efficient use of energy. Hundreds of billions more are poised on the sidelines, waiting for Congress to provide certainty that this new commodity—carbon reductions—will have enduring value. A cap would allow American business to make the transition gradually; mobilize the market to find the quickest and cheapest way to reduce emissions; and unlock the immense amounts of capital needed for America's innovators and entrepreneurs to remake this $6 trillion industry, the biggest business in the world.

A comprehensive cap and-trade plan would begin to free America from the debilitating grip of imported oil: a recent MIT study concluded that a carbon cap would stem the outflow of nearly $500 billion in petrodollars by 2030, assuming oil averages roughly $50 a barrel.

A carbon cap would also create vast new demand for low-carbon energy solutions. The winners won't be only the obvious players—solar-cell companies and wind-turbine manufacturers. Those companies are just the tip of a giant iceberg. The supply chain behind each of these renewable technologies winds its way through the heart of U.S.—and, indeed, global—manufacturing. Each wind turbine, for instance, contains 8,000 parts—including bolts, copper wiring, ball bearings, concrete foundations and steel towers. Companies and workers make those 8,000 pieces, and a comprehensive cap-and-trade bill would deliver immediate benefits in new demand, customers and jobs.