Environment

By Dan Blumenthal

Overall, Obama's Asia policy has been largely driven by events and domestic priorities rather than by an overarching strategic vision. The Obama team had to closely coordinate with China on financial matters in response to the financial crisis. Passing a cap and trade bill at home means that we need China to sign up to a global climate change pact; Americans will chafe at a costly bill if the world's largest carbon emitters do not agree to carbon reductions.

The Obama team attempted a new policy on Burma. The idea is to find a way to engage the military junta which would strengthen relations with the Association of Southeast Asian Nations, of which Burma is a member. But the policy change has been overtaken by events.

Aung San Suu Kyi was unfairly punished when an American swam across a lake to her residence. And the junta began a new round of repression, as its leaders jail and harass political opponents in the run up to their 2010 "elections." Obama could not radically shift Burma policy. Rather, adjustments to our relations with ASEAN and Burma have been only marginal. There has been some more contact with the junta. And as part of the broader attempt to build stronger relations with Southeast Asia, the administration signed the Treaty of Amity and Cooperation (TAC). These and visits to Southeast Asia by Secretary Clinton and her deputy, Jim Steinberg, demonstrate a desire to deepen American engagement with that region. It is unlikely that engaging Burma or signing the TAC will increase America's regional influence.

Surprise?

There are several Obama Asia policies that have been surprising. On a positive note, the Obama team has given much greater attention to the Japan alliance than I had expected. Secretary Clinton's first stop in Asia was in Tokyo, which eased Japanese concerns that they were in for another round of "Japan passing." Since the Democratic Party of Japan took over last September, Obama officials have visited Japan frequently to get a sense of how to deal with a party that has never before governed. The Obama team should be commended for trying to find its way with this inexperienced and eclectic ruling coalition.

Constructive Criticism?

Other policies should give us pause. For example, Obama is sticking to his campaign promises on trade, which means we have no trade policy. The Korea-U.S. Free Trade Agreement has been collecting dust in the Congress. The rest of the region, however, is not standing still. China seems to sign a trade agreement a minute and South Korea is moving forward on an FTA with the EU. If this continues, not only will our economy be disadvantaged, but our regional leadership will also suffer. While the Obama administration has done a fine job showing up to Asian multilateral meetings, without new trade proposals it has shown up empty handed.

A second troubling policy is the absence of any agenda on Taiwan. The Obama team was effusive in its praise of President Ma when he was elected in March 2008 and they applaud his attempts to ease tensions with the Mainland. The Taiwan president is doing what he thinks Washington wants - easing cross Strait tensions. But there was an implicit bargain with Taiwan that we are not upholding. We were supposed to strengthen Ma's hand by strengthening our ties to Taiwan. The Obama team is not helping Ma.  We have not sold any arms to Taiwan even as China has continued its arms buildup across the Strait. And Obama has no plans of yet to deepen economic ties as Taiwan goes forward with a China FTA.

Third, the bluntness with which the team has downplayed China's miserable human rights record is an unfortunate break with past administrations' practices. Secretary Clinton announced that she would deemphasize human rights concerns on her first trip to China. This was followed by the president's refusal to meet with the Dalai Lama when the Tibetan spiritual leader was in Washington last month. The administration has also been silent on Uighur repression and will not meet with Uighur leader Rebiya Kadeer. It does not help either country for us to pretend that we are indifferent about Chinese respect for human rights, when in reality we have a huge stake in China's political liberalization.

Overall, despite a regular barrage of criticism by Candidate Obama directed at President Bush for his supposed neglect of Asia (never a fair criticism), the Obama team has not wowed the region with new ideas or lavished it with attention. During Bush's first year, his administration had offered the largest arms package ever to Taiwan, was well on its way to substantially upgrading ties with Japan, and was negotiating a diplomatic breakthrough with India of historical significance. Then-U.S. Trade Representative Bob Zoellick was negotiating free trade agreements with Singapore, Australia, and Korea.

The criticism of the Bush administration was that it was "distracted" by the war on terror. The Obama team is learning that fighting a war saps a nation's energy and attention. Now in office, the Obama team can see that the threat from Islamic extremism is very real. The Obama team may have really believed that they could "fix" Afghanistan, disengage from Iraq, and then move on to "re-engaging" the rest of the world.

As Obama is learning, it is not so easy to "move on" when you are at war. No president can disconnect a major foreign policy issue such as war from other foreign policy issues. Asians have a stake in America's Afghanistan policy. A loss in Afghanistan would have stark consequences, as friend and foe alike would question our resolve, and Islamic extremism would rear its head again in Southeast Asia.

Prediction?

Obama's Asia team must be finding that during wartime, presidential attention is the scarcest of commodities. Obama has no choice but to focus on "the wars we are in," often at the expense of the Obama team's hopes for a grand "re-engagement" with Asia.

Win McNamee/Getty Images

By Christian Brose

Admittedly, I'm no climate science expert, but I found this piece from Jim Manzi pretty darn persuasive as to why Waxman-Markey -- the American Clean Energy and Security Act -- is a bad bill. It's well worth your time in light of Congress' vote on the bill tomorrow.

By Phil Levy

There's an internet fight going on about how to limit emissions of greenhouse gases. In Corner #1, we have the Cap-and-Trade Kids, advocating limits on the amount of gases emitted. In Corner #2, we have the Pigou Clubbers, arguing for a carbon tax. Backing cap-and-trade are President Obama, Senator McCain (during the campaign), the European Union, and much of the rest of the world. Backing the carbon tax are ... Andrew Sullivan and a bunch of economists, nominally led by Harvard's Greg Mankiw. This seems a little lopsided.

What's interesting is that there are those arguing that the fight should be called off before a punch is even thrown. The winner will have to take on The Status Quo, and cap-and-traders want to go into that fight unblemished. Since they're the only ones with a chance, the argument goes, the Pigou Clubbers should toss in the towel now.

This raises some interesting questions. Is there any difference between cap-and-trade and a carbon tax? Is cap-and-trade the only politically viable approach? And would either have a chance against The Status Quo, who is drawing new fans in the midst of the economic downturn?

First, there is a difference. Cap-and-trade can do a very good impersonation of a carbon tax when we know the demand for emissions with certainty, when we do a great job of regulating, and when we auction off all the emissions permits. If we're uncertain about the demand for producing emissions, if it is hard to keep tabs on what various emitters are doing, or if politics intrudes into the process of handing out emissions permits, then the two approaches veer apart.

For ease of use and immunity from political meddling, the carbon tax is the clear winner. Taxes can be applied early in the fuel distribution process, which makes the logistical task much easier. That sort of upstream application would make attempts at political interference much more transparent, as well. So what about uncertainty? The big critique of a carbon tax is that it cannot guarantee a country will come in under a pre-set emissions cap. If the desire to pollute is really, really high one year, we could find that a given tax won't serve as a sufficient deterrent, and we'll blow past our limits.

Europe, though, has had the opposite problem with their cap-and-trade system. In the first phase of the program, they printed more permits to pollute than anyone wanted. That drove the price of permits near zero, deeply annoying anyone who had paid up for the right to pollute. It also meant that the system was ineffective in restraining pollution. That would be hard to do with a carbon tax. 

The Cap-and-Trade Kids argue that, whatever the economic merits, their approach is the only one with a political chance. But why? Carbon taxes have certainly been seen as a political third rail, at least since President Bill Clinton dropped a proposed BTU tax in 1993. People don't want to have to pay more for energy. But how does cap-and-trade overcome this critique? If it's going to rein in eagerness to pollute, it will have to raise the cost of pollution. It may be possible to win support by pretending this won't happen, but it's worth thinking hard about whether such deception is a sound basis for creating a major long-term policy.

And what of the big ruckus with The Status Quo? Australian cap-and-traders just postponed their fight. Prime Minister Kevin Rudd gave a number of reasons, including the need for business certainty (a plus for a carbon tax, by the way) and the impact of the global financial crisis. Does it make any sense to raise taxes, implicitly or explicitly, in the midst of a recession?

Actually, it might. It would depend what we did with the revenue. Imagine we used it to finance a cut in payroll taxes. That would make it more expensive to pollute, but cheaper to hire people. That could be a nice combo. I wouldn't bet much on the political chances of the carbon tax, but it's got enough promise to at least go down swinging.