This is a rush transcript from "The Journal Editorial Report," December 12, 2009. This copy may not be in its final form and may be updated.

PAUL GIGOT, HOST: This week on the "Journal Editorial Report," as world leaders gather in Copenhagen, one environmentalist is rooting for failure at the climate change conference. He'll tell you why.

And Harry Reid's health care bargain. Did he get rid of the public option only to replace it with something worse?

Plus, Congress takes on one of the pressing issues of our time, how college football decides which teams will play in the national championship. Could we soon be saying goodbye to the Rose Bowl?

Welcome to the "Journal Editorial Report." I'm Paul Gigot.

Fresh from accepting his Nobel Peace Prize, President Obama heads to Copenhagen next week, the site of the largest United Nations climate change conference in history. Considered by many environmentalists to be the last best chance for a comprehensive agreement to limit greenhouse gases. But expectations have been lowered in recent months as it became clear that world leaders would reach no such accord. And my guest this week says that may be a blessing.

Bjorn Lomborg is director of the Copenhagen Consensus Center, a think tank, and author of the book "Cool it, the Skeptical Environmentalist's Guide to Global Warming." He joins me from the site of the U.S. summit in Copenhagen.

Great to have you back, Bjorn Lomborg.

BJORN LOMBORG, DIRECTOR, COPENHAGEN CONSENSUS CENTER & AUTHOR: Good to be here, Paul.

GIGOT: All right, so President Obama heads there next week with you and your fellow revelers. Will he get that grand cap-and-trade binding emissions agreement that they all say they want?

LOMBORG: That's certainly what everybody here hopes. And I think it's reasonable to say there's 110 leaders coming here at this conference. They're not going to go home empty handed. They do want to have some sort of deal. It's not going to be politically binding — I'm sorry, legally binding deal, but probably will be a beautifully crafted political document, full with wonderful quotes and wonderful promises of what we're going to do in 2050. And of course, then, everybody's going to throw confetti, drink champagne, go home, feel like we've conquered. And ten years later we'll have done nothing because, Paul, that's the real problem with this discussion. We've tried this. We've actually tried this approach twice before and it's failed twice before. We tried already in Rio, in 1992. We've promised to cut carbon emissions, but we did no such thing. Then in Kyoto in 1997, we promised to cut carbon emissions more and we didn't do it.

Coming here in Copenhagen and promising even grander carbon cuts, seems a little hollow and seems like we're setting ourselves up for wasting another ten years and doing nothing, but speaking beautifully.

GIGOT: What you're saying is this is going to be a grand failure, they're going to promise things that some future politicians will be able to deliver that won't really do anything at all to bind the nation's who are promising to do this. Now, a lot here — people in America say that China and India are the culprits because they won't go along with what the Europeans and the Americans want. You see that that way? Are these people to blame?

LOMBORG: Well, it's very clear that everybody wants to have everybody else cut. The Europeans have actually gone pretty far ahead and said we want to cut a lot. Let's see if they actually deliver on that. But very clearly, everybody else is waiting for somebody else to come with the first commitment. China went out and promised they were going to cut their carbon intensity, how much carbon they emit per dollar introduced. They were going to cut that intensity by 40 to 45 percent. Everybody loved that until you looked at the energy statistics from the International Energy Agency, and their estimate is, if China does nothing at all in 2020, their energy and their carbon intensity will have been reduced by 40 percent. So, essentially, the Chinese went out and said, we solemnly pledge to do nothing at all. And the Indians were even less. Sorry, go ahead.

GIGOT: The Chinese can promise to do this because they're modernizing their economy. They're investing in more efficient energy sources and doing a lot with nuclear power. So this in essence is just saying we're going to promise it do what we're going to do anyway?

LOMBORG: Yes, exactly. And the Indians said the same thing. They actually went out and promised 20 to 25 percent reduction in their carbon intensity, but the estimates show that they will probably end up, if they do nothing, to reduce their carbon intensity by almost 50 percent. So, they're even hedging their bets against what they're probably going to do anyway. So it's very, very clear there's very few actual promises on the table. And that's what I'm really worried about. You said that it's going to be a grand failure. Yes, it's going to be a grand failure over the next ten years.

But what I worry about is, if we do this, if we paper over our differences and wait another ten years, we'll essentially have lost another ten years to do this. And that way might be a benefit for the climate and for us tackling this issue if we had a real failure, something that everybody realized, we woke up and realized, the leaders didn't get any treaties. They didn't do the beautiful words. They had a complete failure. And that's why I'm saying it might be a blessing in disguise for climate if we had a real failure here, because that would get people to realize, we need to go to another and smarter way to tackle climate change.

GIGOT: Let's talk about this. Because I think you and I disagree a little about the threat from climate change. You think it's real and something should be done.

LOMBORG: Yes.

GIGOT: If this is not going to do anything about it, what do you do? Where do you invest your dollars, which are scarce? We don't have an unlimited supply of money to devote to this. What do you do to make a difference?

LOMBORG: We asked some of the world's top climate economists to look at all the different things you can do for climate and said, where do you get the biggest bang, if you will, or climate bang for your buck. The answer was, don't do what many people here are suggesting, namely just cut carbon emissions. If you go for the two degrees centigrade limit, which is what many nations around the world are signing up for, the costs will be a phenomenal $40 trillion a year by the end of the century. And it will do fairly little good on climate. So essentially for every dollar you spend you only avoid about two cents of climate damage, a very poor deal.

At the other end, the top end of the priority list, the climate economists told us, if you invest dramatically more in research and development into green energy technology for every dollar you spend, you can avoid $11 of climate damage or do 500 times more good. Isn't that a much smarter deal? The other upside, it'd be much better if you get China and India on board for doing this. It would be much cheaper and it would actually have a chance of dealing with global warming.

GIGOT: We don't have a lot of time left. This is where I think I disagree with you, especially in the United States, you talked about investment in green energy, a lot it going for pork that really is inefficient and is politically mediated because it's going to favored companies that aren't going to do a lot of good. How do you avoid that?

LOMBORG: Yes. I think fundamentally, if you look at what most of the money today goes into, it's to bind the inefficient technology. Leaders and politicians love to put up lots of solar cells, a lot for wind mills to show they care, but of course that's all buying inefficient technology. What you want is to pay the researchers to make better technologies for the future. And then you could incentivize and correct it with having a lot of different X prices. That would be the way to go for the future.

GIGOT: All right, Bjorn Lomborg, thank you for being here.

When we come back, Harry Reid's health care compromise. Was the government-run option removed or just replaced by the mother of all public options?

(COMMERCIAL BREAK)

GIGOT: Senate Majority Leader Harry Reid announced this week that he brokered a compromise between liberal and moderate Democrats that may clear the way for the passage of a health care bill by Christmas. The deal, which emerged after days of secret negotiations, would reportedly eliminate the government-run public option once considered by liberals to be the linchpin of reform. But before you breathe a sigh of relief, the compromise includes something that may be worse, a huge expansion of Medicare, to include millions of Americans ages 55 through 64. And that prospect is music to the ears of some supporters of a single-payer system. "Expanding Medicare is an unvarnished complete victory for people like me," says Democratic Congressman Anthony Weiner. "It's the mother of all public options. We've taken something people know and expanded it."

So, joining the panel this week, Wall Street Journal columnist and deputy editor, Dan Henninger; senior economics writer, Steve Moore; and Washington columnist, Kim Strassel.

OK, Kim, President Obama hailed this agreement, even though we don't know the details of it, as a break through. Is this the thing that's going to put it over the finish line?

KIM STRASSEL, WASHINGTON COLUMNIST: Oh, we don't know yet if it's going to go over the finish line. This bill is going to hang on. There's so much discussion about the public option and abortion, and other issues. The question here is whether or not these Senators are going to agree to something like $400 billion of tax increases and $500 billion of Medicare cuts. And this is what is really resonating in the poll now. After being — it becomes flat for a while, you've seen the new numbers coming out, showing Americans are increasingly unhappy with what they're seeing. You've got two out of every three Independents worried about the cost and most Republicans worried about it, very unpopular. And this is the decision these Senators are going to have to make in the end. And that's why the Medicare buy-in question matters because it could also add dramatically to the cost.

GIGOT: Steve, the American Medical Association, which is backing the bill, doesn't like this, the hospitals backing the bill, heretofore, don't like this. Why would the Democrats go in this direction? Is this simply a...

STEVE MOORE, SENIOR ECONOMICS WRITER: They bought into the concept that the president keeps telling them, we have to pass something by Christmas or we face the next election without passing the health care bill, we're in big trouble.

(CROSSTALK)

MOORE: Think about what they're doing right now though on a point that Kim made. What they're really talking about is a massive expansion of Medicare, letting people buy in at the age of 55 years.

GIGOT: Ten more years. Because right now, you get it at 65.

MOORE: Think about that. And everyone knows that the long-term solution is to raise the retirement age so that people aren't living 40 years on Medicare. And now they're talking about lowering the age. Then the other thing they want to do is expand Medicaid. I've talked to a lot of governors this week who said, are they crazy? Medicaid is already bankrupting half of the states.

GIGOT: Just so people understand, Medicaid is the program that was passed originally in the '60s to go for the poor.

MOORE: That's right.

GIGOT: Really, really, a safety net for those people who wouldn't be without health care. Out of this bill.

MOORE: The bottom line here is two-thirds of the people are going to be covered by government. We will have a government-run system.

GIGOT: So squeeze down on Medicare from the bottom to the top, up from the bottom on Medicaid.

MOORE: Exactly.

GIGOT: Indiana, for example, pointed out the governor there had a study and pointed out one out of four people in Indiana, one out of four would be covered by Medicaid if this bill passed.

DAN HENNINGER, COLUMNIST & DEPUTY EDITOR: Well, Paul, there's a lot about this bill, the politics anyway, that is approaching the brink of irrationality. You say, how do explain what they're doing. Why would you expand Medicare when, for one thing, most people are worried about is the cost of Social Security and Medicare. By now, most people know you're passing the costs on to your children. They're probably going to cost themselves the seats of moderate Senators and moderate house members who are running in districts from which this is very impossible. Why are they doing this?

GIGOT: You've got to lose a few seats to make an omelet. This is the...

(LAUGHTER)

HENNINGER: I think you explained it in your opening remarks, which is they want, as Anthony Weiner said, an expansion of control of the health care system. As we said on this program many times before, they'll pass it and worry about cleaning up the mess later. The politics will recede and they'll have control of the health care system.

GIGOT: Kim, I want to read a couple of quotes here, just beautiful this week, to sort of get at the idea, the mentality here. Here is a quote from Bob Casey, the Pennsylvania Senator, "Any big agreement is progress even if we do not know any of the details."

(LAUGHTER)

From Max Baucus, the finance chairman, "If there's 60 Senators who can reach agreement, I'm for it."

(LAUGHTER)

That's it, isn't it, 60 Senators drag this thing over, like Roger Bannister running the four-minute mile. If you collapse at the end of the finish line, that's OK?

STRASSEL: Yes, you know, they're all going to moan and suggest they're not on this board with this, but in the end, Harry Reid is going to wrap this together into one big vote at the end, and he'll probably get his 60. I just want to point out, too, that all of those discussions of Medicare, this was the plan for single-payer prior to all the discussion of the public option. This was their...

GIGOT: When you say single payer — when you say single payer, you mean Canada-style, government-run health care.

STRASSEL: That's right. Because prior to everyone coming up with this public option route, the idea was expand up S-CHIP, the program for children. We'll lower down eligibility for Medicare, so you have the vast majority of Americans already in a government system and the pressure will be so great tore everyone to join. So they're going back to their original plan.

GIGOT: Steve, when I talked to the Republican leadership they're basically saying that the only Republican who will end up voting for this maybe is Olympia Snowe of Maine.

MOORE: So much for bipartisanship.

GIGOT: That's...

MOORE: You could have a bill that none of the Republicans — maybe one Republican in the House and one Republican in the Senate, this is hardly bipartisanship.

GIGOT: And Senator Snowe made a point in a speech in November that bipartisanship, historically for major social reform, is not one Senate vote. It should be 10, 20, and that's what happened with Medicare. That's what happened with Social Security, with civil rights and that's what happened with welfare.

MOORE: But, Paul, they don't care. This is one of the unfortunate big lies of the Obama administration. They keep saying they want to be bipartisan about stimulus, about the budget, about the health care, and they haven't been bipartisan about anything.

GIGOT: But on a reform like this, Steve, that means this is not necessarily going to be durable. It will be hard to repeal.

MOORE: But, Paul, they're making a big bet here. Once they get this in place that it will never get it unrooted. And I think they might be, unfortunately, right about that.

GIGOT: Even if it passes with no Republican votes?

MOORE: Yes. Once you've given entitlement, it's hard to take it away. That's the gamble here.

GIGOT: That's it. Steve, thank you.

When we come back, forget health care. Congress's is busy weighing one of the really pressing issues of our time, how college football decides which teams play in the national championship. Could we soon be saying goodbye to the Rose Bowl?

(COMMERCIAL BREAK)

GIGOT: Forget health care and Afghanistan, Congress this week waded into one of the most pressing issues of our day, how college football decides which two teams will play in the national championship game. A House Energy and Commercial Subcommittee backed legislation that would effectively overturn college football bowl championship series and replaced it with a playoff system to determine a national champion.

Steve, first, condolences again on the Fighting Illini.

MOORE: And congratulations to Kim Strassel for her Oregon Ducks.

(LAUGHTER)

GIGOT: All right, so is this something that Congress should being spending time on, first?

MOORE: Well, obviously not. In fact, they've become kind after laughingstock, actually. Most all Americans, no matter what they think about the national playoff system, what in the world is Congress doing. We have a 10 percent unemployment problem and we've got...

(LAUGHTER)

GIGOT: Let me disagree with you. Couldn't they do less harm by...

MOORE: Maybe you're right.

GIGOT: ... playing with games as opposed to serious business like health care.

MOORE: It just proves they're not serious about anything. But, look, I'm from the Midwest and I went to Illinois, where we believe we should not let academics interfere with a good athletic program.

(LAUGHTER)

This is a business. There's no question about it. This is one of the big businesses. And I think once they move to the bowl championship system and moved away from the traditional bowls, it probably does make sense to have an eight-team playoff and let the best team win, especially in a year like this one where we have five undefeated teams.

GIGOT: The argument is this is — Dan, this is a cartel, OK? It's a group of people who got together, restraint of trade, to keep out the smaller conferences. So why shouldn't Congress get in and force them to do something or at least the Justice Department, as Orrin Hatch as Utah suggests, for an anti-trust investigation?

HENNINGER: The counter argument is it's not a cartel. It's a free market in football product, basically.

GIGOT: Right.

HENNINGER: I mean, you know what the median budget is for a division one athletic department now? $41 million.

MOORE: It's a big business.

HENNINGER: Yes, and the median...

GIGOT: Bigger than the editorial page budget.

HENNINGER: The median salary for one of their coaches is a million dollars, OK? Now, the reason this is happening is because the big conferences are in the big television market. And that's where most of the revenue is derived. The smaller schools will go play in one of those home games for a big team and get their heads beat in because they will drive their entire year's athletic budget from that one game.

GIGOT: Sometimes they actually win. Utah...

HENNINGER: Not very often.

(CROSSTALK)

GIGOT: Utah...

(CROSSTALK)

MOORE: ... Michigan.

GIGOT: Utah gave it to Alabama in one of these games a while back. I mean, they can win. Maybe — the problem is, competitively, some of the big conferences are saying, we don't want to play you because it'd be embarrassing if we lost.

HENNINGER: The problem is if you forced Boise State and Cincinnati into this system, you would upset the entire economic structure of the relationship between the television markets and the big schools. It's just never going to happen.

MOORE: I disagree with that, Dan. I think this would be — if they went to an eight-school playoff system, this would be like the Super Bowl. You'd have so much interest in these games. You'd have them this weekend and next weekend and I think a huge moneymaker.

GIGOT: Well, Kim, you're a Westerner. A lot of these teams that don't get to play are from the West because they do play in smaller TV markets. What do you think of the anti-trust argument that Orrin Hatch makes?

STRASSEL: I agree. I think that this is, as Dan said, more a question of a free market in football product. But you're going to see this continue to go through Congress and exactly for all the reasons that you guys are debating about right now. Because right now, this is being driven by guys like Orrin Hatch and Joe Barton in Texas, unhappy with TCU. But this is fundamentally going to go and it's going to go to the floor and then you're going to get the Congressmen who do represent the big conferences. And they like it the way it is. And this is — there's going to be a lot of fight about this. And it's not a sure thing this can go through.

GIGOT: No. It's probably not going to pass even though President Obama said he's in favor of the...

(LAUGHTER)

But if the BCS series people do change it themselves, it will be because of the money, won't it? Because they see this playoff system as a bigger cash cow than every the bowls.

HENNINGER: Yes, well it is. It's funding the athletic departments — the president's university claimed they hate the system and say the boosters and alumni force us to do it, but this is essentially what the people who attended these schools and the people who played for the schools want.

GIGOT: Do you like a playoff system yourself, Dan?

HENNINGER: Yes, ideally, I would like a playoff system. This is simply never going to happen.

GIGOT: How about you, Kim?

STRASSEL: Oh, I would love to see it, give everybody a chance. It's a sporting way to go.

GIGOT: And you like it?

MOORE: I think it's coming, too, within about five years.

GIGOT: I agree with you, Steve. I think it's coming.

MOORE: Go TCU.

GIGOT: That's where the money is.

All right, we have to take one more break. When we come back, our "Hits and Misses" of the week.

(COMMERCIAL BREAK)

GIGOT: Time now for our "Hits and Misses" of the week — Dan?

HENNINGER: Well, I'm giving a qualified hit to Barack Obama for his acceptance speech at the Nobel Peace Prize event. He defended the idea of a just war and said evil exits in the world and said, as president, he was sworn to protect the country. This is a speech that George Bush could have given. It really over threw the entire post-Vietnam war anti-war dogma of the Democrats. The question is, why did he do it? Was it out of conviction or to inoculate himself from the anti-war view of those Democrats? Once this health care passes and they get that behind them and the compulsion, anti-war views on Afghanistan of the Democrats come out, the president then will be put to a test on his views on just war.

GIGOT: All right.

Steve?

MOORE: Normally Senators can be counted on to defend their own state, but last week, Robert Byrd attacked the coal industry in West Virginia. Coal is one-quarter of the economy. This would be like Nebraska Senator attacking corn or, you know, a Texas Senator attacking oil. He basically has thrown his lot in with the global warming people. And this will do a lot of damage to the state of Wisconsin — I mean, West Virginia and workers.

GIGOT: All right.

Kim?

STRASSEL: A hit for Richard Branson, the U.K. billionaire, who this week unveiled Virgin Galactic, which is meant to be the first commercial space system for private citizens. He's already taken a lot of flak for this. It's too expensive, not commercially viable. It's just the dream of a billionaire. All through history, our advances have been on billionaires who placed their reputation and fortune on dreams. And it's nice to see private investors still trying things like that.

GIGOT: All right, Kim. Thank you very much.

Remember, if you have your own "Hit or Miss," please send it to us at jer@FOXnews.com.

That's it for this week's edition of the "Journal Editorial Report." Thanks to my panel and especially to all of you for watching.

I'm Paul Gigot. We hope to see you right here next week.

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