More Cap and Trade Fine Print

by William Yeatman on June 3, 2008

More Cap-and-Trade Fine Print   [Chris Horner]

As noted below, the Lieberman-Warner bill sets aside a portion of its receipts to establish a Clean Development Technology Deployment Fund, which supposedly will pay to promote environment-friendly technologies abroad and “provid[e] other forms of technical assistance to facilitate the qualification for, and receipt of, program funding.” In other words, some of the revenues from selling ration coupons, instead of offsetting the bill’s increased costs to consumers, will be given to green pressure groups so they can promote even more inefficient and unwieldy schemes.

But it doesn’t stop there. Two other categories of recipients stand to profit from Lieberman-Warner at your expense. Remember, all this is being enacted in the name of “doing something,” even though no one believes it would actually do anything such as alter the climate (in fact, how much the scheme would even reduce emissions — if at all — is highly questionable, what with the allowance of credit for those notorious carbon dioxide “offsets.”)

First is the less obvious group, other countries. Note this provision:

Section 1316 International Reserve Allowance Program


(1) IN GENERAL. — The Administrator shall establish a program under which the Administrator shall offer for sale to United States importers international reserve allowances in accordance with this subsection. Importers shall be able to purchase international reserve allowances by no later than the earliest date that Administrator distributes allowances under Titles V through XI. . . . 

(7) PROCEEDS. — All proceeds from the sale of international reserve allowances under this subsection shall be allocated to a program that the Administrator, in coordination with the Secretary of State, shall establish to mitigate the negative impacts of global climate change on disadvantaged communities in other countries. . . .

Once you hack away the bureaucratic lingo, the bill promises to  rope the U.S. into a form of international wealth transfer – of the very kind that we would be paying for already if the Senate had found the nerve to ratify the Kyoto Protocol. This transfer will be funded by the higher price you pay for goods, as manufacturers and importers pass along the cost of their ration coupons.

Now to the lowest-hanging fruit. The fact that the corporations touting Lieberman-Warner stand to profit from it financially is old news, at least to anyone who isn’t a journalist. But as I posted earlier, some of these rent-seekers have decided not to support the current version of the bill after seeing that they’ll have to pay for their ration coupons and so won’t get to keep the full increase in energy prices for themselves. Others, mostly nuke and windmill types like Exelon, GE and FPL, remain quite gung-ho because they’ll still clean up, so to speak, at your expense.

I’m now soliciting suggestions for the names of the company or companies that successfully lobbied to include “credit” for business decisions made a decade or more ago. For these actions, which were taken on their economic merits at the time, the companies would be given ration coupons, which they can sell on the state-created market.

Title VII Recognizing Early Action

Section 701 Rulemaking

Not later than 2 years after the date of enactment of this Act, the Administrator shall promulgate rules establishing an Early Action Program for distributing emission allowances to entities that emit greenhouse gas in the United States, in recognition of verified greenhousegas emissions reductions — 

(1) that occurred prior to promulgation of the rules required by this section; and 

(2) that resulted from actions taken by the entities after January 1, 1994 and before the date of enactment of this Act.

As Fred Smith informed the Senate Environment committee last year, these rent-seekers are particularly egregious and their motivations often particularly transparent. This provision means that the bill, already slated to not really reduce emissions due to pending offsets, will do less than nothing thanks to these retroactive ones.

So who exactly pushed for this “early action” recognition? Let’s try to name names.

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