On energy and environment, the President offered no big policy changes for his final year, and in particular declined to endorse any major climate change legislation targeting greenhouse gas emissions from fossil fuels. Such cap and trade bills would do more economic harm than environmental good, and it is best that this administration run out the clock on them rather than try to win 11th hour plaudits from environmentalists. Those environmentalists will certainly be displeased and criticize Bush for not doing enough. But the President is continuing with a number of other measures on climate change, both good and bad.

Global warming is a problem, but far from a crisis. That is why the President was right to not endorse S. 2191, the Lieberman-Warner cap and trade bill, or anything like it. Such a measure is designed to cap carbon dioxide emissions via binding targets, effectively rationing the fossil fuels that America relies upon for 85 percent of its power. This energy tax in disguise could cost hundreds of billions annually — a solution greater than the problem. Further, given the failure of this cap and trade approach in Europe, where few countries are meeting their targets and several are seeing their emissions are rising at a faster rate than the U.S., it may prove to be all economic pain and no environmental gain.

While saying nothing about domestic climate bills, the President did confirm his commitment to international negotiations on a future climate treaty. But while talking about this future treaty, he said nothing in support of the current Kyoto Protocol and its cap and trade approach — a sign that this subsequent agreement will have to be very different. He also emphasized that the U.S. will go along with a new treaty only if every major economy does as well, which is very unlikely to happen.

The President also announced that he is continuing with the right approach to global warming — research into technology that may one day allow us to address this problem more cost effectively, as well as mechanisms for spreading that technology worldwide. Unfortunately, he is also continuing with some bad ideas — mandating and subsidizing problematic alternatives like ethanol, wind, and solar power. But the most important news is that the Republic will be safe from damaging climate legislation for another year.