May 2010

The chance that the Senate will pass a comprehensive energy-rationing (a k a climate) bill this year remains close to zero.  BP’s big oil spill in the Gulf changes very little.

The global warming movement peaked last June 26 when the House passed the Waxman-Markey bill.  When members went home for the Fourth of July, many who voted for it discovered that their constituents were angry and mobilized.

Seeing the public reaction, Senator Majority Leader Harry Reid (D-Nev.) dropped plans to move a cap-and-trade bill before the August recess and turned to health care reform.  It’s been all downhill since then.

The Kerry-Boxer bill, which is very similar to Waxman-Markey, passed the Environment and Public Works Committee last fall, but it was clear that it couldn’t get 51 votes, let alone 60, on the floor.  That’s when Senator John Kerry (D-Mass.) began working on a “middle-of-the-road” package with Senators Lindsey Graham (R-SC) and Joseph Lieberman (I-Conn.).

Even if he does finally release a draft of the measure this week, it’s still not going anywhere.  Whether Graham is on board doesn’t matter because he doesn’t bring any other Republicans with him.

Kerry’s draft has restricted cap-and trade to electric utilities only.  And he’s stopped calling it cap-and-trade because the American people have figured out that it is an indirect tax on them.  Now it’s “pollution reduction and investment.”  Similarly, a gasoline tax has been renamed “linked fee.”  Call it whatever you want, it’s still a tax that consumers will have to pay.  Adding some offshore oil or nuclear incentives or clean coal research can’t hide the fact that prices will go up when energy is rationed.

What’s become increasingly apparent is that this legislation no longer has much to do with reducing greenhouse gas emissions.  It’s a monstrous collection of payoffs to big business special interests, ranging from Goldman Sachs to Duke Energy to General Electric.

(This piece originally appeared on the New York Times’s Room for Debate web site. )

In the News

Are We Listening Yet?
Chris Horner, American Spectator, 7 May 2010

Drill, Baby, Still
Investor’s Business Daily editorial, 7 May 2010

A Positive Human Influence on Global Warming?
Robert Bradley,, 6 May 2010

A Sudden Acceleration of Regulation
Henry Payne, Planet Gore, 6 May 2010

A Gush to Judgment
Iain Murray, Washington Examiner, 5 May 2010

EU Investigates Cap-and-Trade Fraud
Leigh Phillips, EU Observer, 5 May 2010

Keep The Lights On
Peter Ferrara, American Spectator, 5 May 2010

The Costs of Carbon Controls
Marlo Lewis,, 4 May 2010

Gore: From Sanctimonious to Ridiculous
Victor David Hanson, PJM, 2 May 2010

News You Can Use

CEOs: California Has Worst Business Climate

American CEOs consider California to be the worst place to do business in the country, according to a new poll by Chief Executive Magazine. Not coincidentally, the Golden State is also the national leader in onerous environmental regulations, including AB 32, and high energy prices.

Inside the Beltway

Myron Ebell

Update on Murkowski’s Disapproval Resolution

Senator Lisa Murkowski (R-Alaska) has at least until the Memorial Day recess to offer her resolution under the Congressional Review Act to disapprove the Environmental Protection Agency’s finding that greenhouse gas emissions endanger public health and welfare.  S. J. Res. 26 has 41 co-sponsors, including three Democrats-Lincoln (Ark.), Landrieu (La.), and Nelson (Neb.).  Nine more votes are needed to get to the 51 needed for passage.

It appears likely that Republican Senators Olympia Snowe and Susan Collins of Maine will vote against the resolution and that Scott Brown, the new Republican Senator from Massachusetts, will vote for it.  That means Murkowski needs to find eight more Democrats.  The most likely are from coal and manufacturing States.  If the White House sees it as a threat, then they may lean pretty hard on some of these Democrats to vote no.  On the other hand, Murkowski has been assiduously lobbying her colleagues for months.  My guess is that it will be very close, but the resolution will pass.  The vote could occur any time in the next three weeks.

If the Senate passes S. J. Res. 26, then the House can take up the resolution at any time.  The House Democratic leadership will not bring it to the floor, which means that the only way to get it to the floor for a vote is through a discharge petition signed by a majority of House Members.  There are two identical House resolutions of disapproval.  H. J. Res. 76 was introduced by Rep. Ike Skelton (D-Mo.) and now has 47 co-sponsors.  H. J. Res. 77 was introduced by Rep. Joe Barton (R-Tex.) and now has 115 co-sponsors.  That’s a start, but still a long way from 218 signatures on a discharge petition.

Graham Clears Everything Up

The picaresque saga featuring Senators John Kerry (D-Mass.), Lindsey Graham (R-SC), and Joseph Lieberman (I-Conn.) grows ever more farcical.  Kerry this week once again promised to release a draft of their energy-rationing bill next Wednesday, with or without Graham’s support.  Graham’s comments have been all over the map.  He said that there was still a chance this year to get the sixty votes necessary to pass the bill.  Then he said that the bill was dead for this year.  Most recently, he said this in an interview with Environment and Energy Daily: “There is no bipartisan support for a cap-and-trade bill based on global warming. There is bipartisan support in the future, at the right time and in the right circumstances, for an energy independence legislation, green job creation and clean air.”

BP’s big oil spill off the Louisiana coast complicates the issue.  On the one hand, Senator Bill Nelson (D-Fla.) announced that he would oppose any bill that included more offshore oil production.  Several other Senators on the left would probably do the same.  On the other hand, several Senators in the middle have said they will not support an energy-rationing bill unless it has more offshore oil production in it.  What I think Kerry should do is what he did with cap-and-trade, which he renamed “pollution reduction and investment,” and the gasoline tax, which he renamed “linked fee.”  He should call it the Offshore Wind, Solar, and Other Energy Title.  That way no one will know that it’s about offshore oil.

Across the States

Anti-AB32 Initiative Will Proceed to November Ballot

California voters will have the choice whether to proceed with costly carbon controls in the midst of an economic depression. On Monday, The California Jobs Initiative submitted 800,000 signatures of support for a ballot initiative that would delay implementation of AB 32, California’s 2006 global warming law, until the State’s unemployment declines to 5.5% (it currently stands at 12.8%). That’s more than double the number of signatures required to get on November’s ballot.

Coal State Democrats Protest the EPA Coal Crackdown

Representatives Nick J. Rahall (D-WV), Alan B. Mollohan (D-WV), and Rick Boucher (D-Va.) yesterday sent a letter to EPA Administrator Lisa Jackson expressing their concerns over the EPA’s plans to shut down surface coal mining in Appalachia (and the leading revenue generator in West Virginia) in order to protect the mayfly, an insect that isn’t even an endangered species. In fact, the EPA established bug-protections so stringent that they would outlaw almost all construction near an intermittent or ephemeral stream, but the EPA is trying to target the regulations solely on Appalachian coal mining. Reps. Rahall, Mollohan, and Boucher asked Administrator Jackson why “a hardrock mining operation in California, or a shopping mall construction project in New Jersey…should not be held to the same standard.” Good question.

Around the World

Obama Loses a Clean Energy Talking Point

Chris Horner, from The Daily Caller

Spain’s socialist Zapatero government has laid the groundwork for abandoning its vaunted “green jobs” schemes, admitting in an official if not yet released document the damning criticisms levied by an academic team. This is very bad news for the Obama administration whose leader on eight separate occasions instructed us to “think about what’s happening in countries like Spain” if we wanted to see his model and vision for a “green economy.” He would launch America into a new era of prosperity premised in “new technologies” like windmills-yes, he actually said that. Read more here.

UK Elections: The Greens Gain, a Nation Loses

Iain Murray

Britain’s inconclusive election merely reaffirmed that the nation is going to go further down the road of unsustainable energy policy.  Not only was the Green party leader, Caroline Lucas, elected to be the party’s first ever MP in the former Conservative stronghold of Brighton, but millionaire playboy Zac Goldsmith was elected nominally under the Conservative banner but stressed he was in Parliament to work on green issues.  Goldsmith has proved extremely influential on party leader David Cameron, and the Conservatives’ manifesto (platform) took a very alarmist line on climate and energy issues.

At time of writing, there are also suggestions that David Cameron’s outreach to the Liberal Democrats to join a coalition government includes further concessions on a low-carbon economy, although it is hard to see how much further the Conservatives can go.  With a mounting public sector debt crisis the size of Greece’s, a Prime Minister David Cameron and his adviser Goldsmith might well see their dreams of emissions reduction realized through the simple expedience of economic collapse.  It is certainly hard to see how Britain can recover economically with the albatross of decarbonization hanging around her neck.

Green China?

Proponents of cap-and-trade have taken to arguing that climate change legislation is an economic necessity because the U.S. risks falling behind in a global, zero-sum competition for green industrial supremacy. The influential columnist Thomas Friedman, for example, has prophesied that future historians will associate the 21st century’s first decade with China’s “Green Leap Forward.” He also has warned that the Chinese are going to “clean our clock” unless the Congress passes a cap-and-trade energy-rationing scheme. This is ridiculous: Green energy is mere window dressing in China, which is building a new coal fired power plant every week to meet its growing energy needs. This reality was reinforced today, when the New York Times reported that China’s “surging demand for power from oil and coal has led to the largest six-month increase in the tonnage of human generated greenhouse gases ever by a single country.”

Subprime Carbon

Julie Walsh

The European criminal intelligence agency (Europol) has said that as much as 90 percent of the entire market volume on emissions exchanges was caused by fraudulent activity.  Examples of fraud abound.

Worse, Mark Shapiro in a Harper’s Magazine article entitled “Conning the Climate” details the factors in carbon trading that make fraud inherent in the system:

If cap-and-trade in the United States were to become reality along the lines of proposals now before Congress, up to 2 billion of the new credits would be drawn from carbon offsets, potentially increasing the worldwide supply of such credits by a factor of seven.

The United Nations has certified twenty-six firms worldwide-in U.N. lingo, Designated Operational Entities (DOEs)-to “validate” emissions offsets and then to “verify,” often years later, that those reductions actually occurred.

The developers of emissions-offset projects are by and large funded or owned outright by multinational firms, particularly financial houses such as JP Morgan Chase, which owns the biggest developer in the world, Eco-Securities, and Goldman Sachs, which has a significant interest in the largest U.S.-based developer, Blue Source.

Far from being independent third-party auditors, the DOEs get paid by these very developers and have to compete vigorously to win business.

But only 4 percent of requests for verification of offsets since 2005 have been rejected.

A Berlin think tank, the Öko-Institut, conducted a  review of the validation process on behalf of World Wildlife Fund International and concluded that none of the top five validations scored higher than a D in an A-to-F grading scale.

Mark Shapiro met with Mark Trexler, the director of Climate Strategies and Markets for DNV (one of the two main companies in the carbon offset-verification business), who said that the reality is that everyone- emitting businesses, carbon-project developers, entrepreneurs in the developing world, and governments-has a vested interest in validating as many projects as possible.

The Cooler Heads Digest is the weekly e-mail publication of the Cooler Heads Coalition. For the latest news and commentary check out the Coalition’s website,

Today’s Greenwire (subscription required) includes an edited transcript of an interview with Lindsey Graham (R-SC) that recalls Bill Clinton’s famous line, “It all depends on what the meaning of ‘is’ is.”

Graham was at pains to explain his position on the Kerry-Graham-Lieberman cap-and-trade bill. On the one hand, he asserted that, “I’m in this to win.” On the other hand, he pulled the rug out from under Kerry and Lieberman two weeks ago when he backed out at the last minute from a press conference at which the bill was to be unveiled, and he is not expected to join them when they introduce the bill next week. Sen. John Cronyn (R-TX) aptly described Graham as the hokey pokey man: “You put your right foot in. You take your right foot out. I’m not sure where he [Graham] is right now.”

Although the bill includes a cap-and-trade program for the electric power sector, which is to be extended over time to other sectors of the economy, Graham is still asserting that it’s neither a cap-and-trade bill nor a global warming bill. He stated: “It’s not a global warming bill to me. Because global warming as a reason to pass legislation doesn’t exist anymore.” He also explained: “There is no bipartisan support for a cap-and-trade bill based on global warming.”

Permit me to translate Graham’s Clintonese: “We want capntrade even if the original and central rationale is no longer credible, and oh, by the way, we’re not calling it capntrade anymore. I’m in this to win but I’ll be a no-show when Kerry and Lieberman introduce the non-global warming, non-capntrade, global warming-capntrade bill.”

In the interest of ensuring public access to climate-related documents that may be hard to find, I am posting here the original, June 1998 study by technology analyst Mark P. Mills of the sprawling compliance burdens of EPA regulating carbon dioxide (CO2) as an air pollutant under the Clean Air Act (CAA).

The study, entitled A Stunning Regulatory Burden: EPA Designating CO2 As A Pollutant, estimated that applying CAA permitting requirements to CO2 would compel EPA to regulate over 1 million small- and mid-size businesses.

In September 2008, Mills and his daughter Portia updated the study for the Chamber of Commerce in a report entitled A Regulatory Burden: The Compliance Dimension of Regulating CO2 as a Pollutant.

Although superceded by the later report, the June 1998 report remains highly relevant to the climate policy debate.

A Stunning Regulatory Burden was a direct response to the April 1998 Memorandum by then EPA General Counsel Jonathan Z. Cannon asserting EPA’s authority under the Clean Air Act to regulate CO2 and other greenhouse gases (GHGs). Petitioners in Massachusetts v. EPA partly relied on the Cannon memorandum to press their claim that EPA had a statutory obligation to issue an endangerment finding and regulate GHG emissions from new motor vehicles under Sec. 202 of the Act.

Most importantly, the June 1998 Mills study reminds us that EPA had to know all along that a victory for petitioners in Massachusetts v. EPA would dramatically expand its regulatory reach beyond any plausible delegation of regulatory authority from Congress.

Yet during all the years when the case was being litigated (Sep. 2004 – April 2007), EPA never pointed out the regulatory ramifications of a victory for petitioners. Only long after losing case, in its Advanced Notice of Proposed Rulemaking (July 2008) and Tailoring Rule (October 2009), did EPA acknowledge that the endangerment finding tees up the very sorts of regulatory excesses Mills warned about a decade earlier. 

The 5-4 majority in Mass v. EPA decided in favor of petitioners partly in the belief that an endangerment finding would not lead to ”extreme measures” (p. 531). But according to the Tailoring Rule, unless EPA “tailors” — that is, amends — the CAA, the endangerment finding will lead inexorably to a host of “absurd results” that conflict with and undermine congressional intent.  

The question arises: Why didn’t EPA explain this when it really mattered? Why did EPA pull its punches in Mass. v. EPA? Why didn’t EPA make the case that the endangerment finding sought by petitioners would lead a regulatory cascade that Congress never intended and would not approve?

I think the answer is obvious. For EPA, losing the Massachusetts case meant gaining the power to regulate fuel economy for the auto industry and, more importantly, the power to determine climate and energy policy for the nation. Strong circumstantial evidence suggests that EPA wanted to be thrown into the greenhouse briar patch all along.

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