Cooler Heads Digest 23 May 2009

Announcements

The Heartland Institute’s Third International Conference on Climate Change will be held in Washington, DC on June 2, 2009 at the Washington Court Hotel, 525 New Jersey Avenue, NW. It will call attention to widespread dissent to the asserted “consensus” on various aspects of climate change and global warming. Register here.

The Competitive Enterprise Institute has a new video campaign–Al Gore, 1984. The web page links to a joint CEI-National Taxpayer Union project that allows you to email your Member of Congress about the Waxman-Markey energy-rationing bill.

In the News

Study Estimates 2.3 Billion Lost Jobs with Waxman-Markey
Marlo Lewis, GlobalWarming.org, 22 May 2009

Waxman-Markey Bill Jury-rigged for Special Interests
Steven Pearlstein, Washington Post, 22 May 2009

The Climate-Industrial Complex
Bjorn Lomborg, Wall Street Journal, 20 May 2009

Democrats May Make Trouble for Climate Bill
Lisa Lerer and Patrick O’Connor, Politico, 22 May 2009

Waxman-Markey Full of Unpleasant Surprises
The Washington Examiner, 22 May 2009

Warnings from the Left Coast
Rep. Tom McClintock, 21 May 2009

California’s Sorry State Points to America’s Future
Iain Murray and William Yeatman, Fox Forum, 20 May 2009

Cap and Trade is a License to Cheat and Steal
William O’Keefe, San Francisco Examiner, 18 May 2009

Cap and Trade or Coaches and Horses
Financial Times, 18 May 2009

Waxman-Markey Will Wreck U.S. Economy
Washington Examiner, 18 May 2009

Is Wind the Next Ethanol?
Ben Lieberman, Washington Times, 17 May 2009

Mark Mills: Prophet in His Own Time?
Marlo Lewis, MasterResource.org, 15 May 2009

News You Can Use

What Happens When You Give Away the Ration Coupons?

As former Congressional Budget Office Director Peter Orszag (now Obama’s Office of Management and Budget Director) said, “If you didn’t auction the permits it would represent the largest corporate welfare program that has ever been enacted in the history of the United States. All of the evidence suggests that what would occur is that corporate profits would increase by approximately the value of the permits.”

Rep. Jay Inslee, Washington Democrat, said lawmakers should not repeat the mistakes of the European Union, which gave away its first round of permits to affected industries free of charge: “When they started the cap-and-trade [plan], they gave away all the permits,” Mr. Inslee said. “It created less controversy and it was a spectacular disaster.” From an article on the hearings by Tom LoBianco published in the Washington Times on 22nd April.

H.R. 2454, the American Clean Energy and Security Act, as passed by the House Energy and Commerce Committee on 21st April gives away 85% of the ration coupons to special interests.

Inside the Beltway

Myron Ebell

House Committee Passes Waxman-Markey, 33-25

The House Energy and Commerce Committee early Thursday evening voted to send the Waxman-Markey energy-rationing bill, H. R. 2454, to the House floor by a vote of 33 to 25. One Republican, Mary Bono Mack of California, voted yes. Four Democrats voted no: Mike Ross of Arkansas, Charles Melancon of Louisiana, John Barrow of Georgia, and Jim Matheson of Utah. Republican Nathan Deal of Georgia was not there to vote, but was opposed to the bill.

Final passage came after four long days of considering amendments. The Democratic majority defeated every Republican attempt to put upper limits on the economic damage the bill could do. They defeated amendments that would have suspended the Act if electricity prices double, gasoline reach five dollars a gallon, or unemployment exceeds fifteen percent. An amendment to suspend the Act if China and India don’t reduce their own emissions was rejected on a straight party-line vote.

They also defeated Rep. Marsha Blackburn’s (R-Tenn.) amendment (based on her bill-H. R. 391) that would have removed greenhouse gases from the list of pollutants regulated by the Clean Air Act. Rep. Edward Markey said in opposing the amendment, “We might as well say that the Earth doesn’t revolve around the sun or the dinosaurs never roamed the Earth as to say that carbon isn’t a pollutant.” (I wrote that down as I listened on C-Span, so it may not be an exact quote.) Yes, there’s no doubt in the U. S. Congress that a naturally-occurring trace gas necessary for life on Earth is a pollutant. As far as I can tell, defeat of the Blackburn amendment means that the cap-and-trade scheme in the bill will run in tandem with regulation of greenhouse gases under some sections of the Clean Air Act.

The debate became more and more unreal as it went on. Chairman Henry Waxman (D-Beverly Hills) and Subcommittee Chairman Edward Markey (D-Mass.) argued that the purpose of giving away 85% of the ration coupons to big businesses was to protect consumers from higher energy prices. But cap-and-trade can only reduce emissions if prices go up. Higher prices force consumers to use less and bring otherwise uncompetitive alternatives, such as wind power, onto the market. Of course, everyone realizes that the real purpose of giving away the coupons is to buy support from big businesses. Jim Rogers of Duke Energy is now looking forward to a big retirement package.

It’s actually unlikely that the bill if enacted will reduce emissions, at least for twenty or thirty years. That’s because nearly all the cuts required can be met by buying offsets, as an analysis by the Breakthrough Institute shows. Many offsets are a scam. Most of the ones that aren’t entirely bogus don’t deliver their emissions offsets until decades after they are purchased. For example, you can buy to have a forest planted with young trees, but they won’t sequester much carbon until they grow much bigger.  A Republican amendment to ban foreign offsets, which are especially hard to monitor and verify, was defeated.

Prospects for Waxman-Markey

Four moderate Democrats voted against H. R. 2454. That spells difficulties when it reaches the House floor, but not insuperable ones. My guess is that the bill can probably pass the House if the Democratic leadership can get it to the floor quickly. But I wouldn’t bet on it passing if the vote occurs after the August recess. That’s because it’s ramshackle (as is any thousand-page bill) and will start falling apart as people begin to explore what’s in it. Right now, the momentum is provided by the big businesses that stand to gain windfall profits from getting free ration coupons.

But there are losers as well, and the losers are going to realize that and then will begin to complain about it. The entire real estate and building industries lose big under Title II.  Even among industries that gets lots of free ration coupons, there are winners and losers. For example, utilities get 35% of the coupons, but in some States utilities get more coupons than their current emissions and in some States they get fewer coupons. How many coupons will Rep. Jay Inslee of Washington be willing to transfer from utilities in his State to some other State in order to gain a vote?

So I think that the momentum is going to change directions fairly quickly. Major far-left environmental pressure groups are opposing the bill largely because it gives away the ration coupons to “polluters.” See here and here.(“Far-left” is not only my adjective. When Greenpeace USA, Friends of the Earth, and Public Citizen sent out a press release criticizing Waxman-Markey, that’s how Greenwire described them.) They will mobilize their supporters as floor action approaches.

Public opinion has already turned strongly against the bill. An in-depth poll conducted by Lauer Johnson Research for the National Rural Electric Co-operative Association in early April found that 58% of those surveyed would oppose any bill to combat global warming that would raise their electricity bills by any amount. We have posted the poll results on the Cooler Heads Coalition web site, globalwarming.org. Waxman and Markey are not going to be able to conceal the likely price increases for long. Initial estimates by the Heritage Foundation, Charles River Associates, and the Congressional Budget Office show much higher costs to consumers than the EPA found in their obviously flawed estimate of 13 cents per person per day. Environmental pressure groups that support Waxman-Markey are using the EPA study, even though one of the reasons it finds such low compliance costs is that it assumes that a lot of new nuclear plants are going to be built.

Obama Raises Car Prices

President Barack took a politically popular step this week in announcing higher fuel economy standards for new cars and trucks. The anti-energy bill enacted in 2007 by the Democratic-controlled Congress and enthusiastically supported by President George W. Bush raised Corporate Average Fuel Economy (CAFÉ) standards to 35 miles per gallon for new cars by 2020 (and included the huge increase in the ethanol mandate as well). President Obama raised that to 35.5 miles per gallon by 2016 (higher for cars, lower for light trucks).

It’s popular because vast efforts have been made to make people assume that they can still buy the same vehicle with the same size and performance at the same price, but after government waves a magic wand it will now get more miles per gallon. That is of course not the case. Big cars and trucks are still going to be produced, but the automakers aren’t going to meet these higher CAFÉ standards if they sell very many of them. Thus prices are going to go up for all cars, but much more for bigger, safer models.

While I’ve been concentrating on the Waxman-Markey bill for the past few weeks, things have also been happening in the Senate. Next week, I’ll catch up on the hi-jinks in the Senate Energy and Natural Resources Committee.

Around the World

Kyoto II

A draft of the negotiating text for the fifteenth Conference of the Parties to be held in Copenhagen in December has surfaced. It incorporates entirely new approaches to regulate greenhouse gases. It appears that binding time tables and actions are out, while mandatory “official development assistance” is in.

Yet China will be submitting their own position to the United Nations in one week. While the specific details of the document are unknown, Bejing demanded Tuesday that rich countries cut greenhouse gas emissions by 40 per cent by 2020 from 1990 levels and help pay for reduction schemes in poorer countries, including China, with 0.5 to 1 percent of their annual economic worth. And such developing countries should curb emissions only on a voluntary basis, and only if the cuts “accord with their national situations and sustainable development strategies”.

The Chinese government didn’t say whether they would be willing to loan us the hundreds of billions or even trillions of dollars they want us to pay them to reduce their emissions.

In the States

Utah

Utah may be getting a new governor who is more sceptical about climate change policies than the current one. Lieutenant Governor Gary Herbert will replace Governor Jon Huntsman if the Senate confirms President Obama’s nomination of Huntsman to be our Ambassador to China.

It Costs Only 13 Cents Per Day!

Julie Walsh
If you’ve heard environmentalists claim that the Waxman-Markey bill will only cost each person 13 cent a day, they are relying on information from a recent EPA study. However, the EPA’s analysis includes this rather large assumption: “Nuclear power generation is allowed to increase by ~150% from 782 billion kWh in 2005 to 1,982 billion kWh in 2050” (page 27). There have been no new orders for nuclear plants since the 70s, yet we are supposed to believe that environmental pressure groups will allow dozens of new reactors to be built.