Today, the World Trade Organization, together with the UN Environment Programme posted a report on trade and climate change that outlines how carbon border taxes may be consistent with WTO rules. It is a very careful discussion of relevant articles, their intent and interpretation, and related WTO cases (though no case has specifically dealt with climate change).

In some cases, the WTO-UNEP discussion reads like “on the one hand, and on the other.” The report is bound to provide environmental groups with ammunition to argue that CO2 border taxes are WTO-compliant. However, the issues and their legal precedents are not that clear-cut. What’s more likely is that the introduction of border taxes or similar measures will open up a flood of retaliatory actions and disputes.

Here’s a summary from the report of the relevant GATT and WTO rules:

If a particular measure is inconsistent with one of the core provisions of the GATT (e.g. Articles I, III or XI), it could still be justified under Article XX. Article XX lays out a number of specific instances in which WTO members may be exempted from GATT rules. Two exceptions are of particular relevance to the protection of the environment: paragraphs (b) and (g) of Article XX. According to these two paragraphs, WTO members may adopt policy measures that are inconsistent with GATT disciplines, but necessary to protect human, animal or plant life or health (paragraph (b)), or relating to the conservation of exhaustible natural resources (paragraph (g)).

The report was issued just as the U.S. House of Representatives was to begin consideration of the Waxman-Markey energy bill, which, according to Inside Trade (subscription required), will include a Ways and Means Manager’s Amendment with provisions for carbon border adjustments to address competitive and so-called leakage issues.

The alliance between organized labor and leftist environmentalists remains as strong as ever. As Carter Wood at Shopfloor.org notes, the Waxman-Markey climate change bill is a great example of this alliance.

From page 78 of the manager’s amendment, concerning state revolving loan funds for small- and medium-sized manufacturers.

(F) COMPLIANCE WITH WAGE RATE REQUIREMENTS.-Each recipient of a loan shall undertake and agree to incorporate or cause to be incorporated into all contracts for construction, alteration or repair, which are paid for in whole or in part with funds obtained pursuant to such loan, a requirement that all laborers and mechanics employed by contractors and subcontractors performing construction, alteration or repair shall be paid wages at rates not less than those determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code (known as the ‘Davis-Bacon Act’), to be prevailing for the corresponding classes of laborers and mechanics employed on projects of a character similar to the contract work in the same locality in which the work is to be performed.

The Secretary of Labor shall have, with respect to the labor standards specified in this subparagraph, the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (15 F.R. 3176; 64 Stat. 1267) and section 3145 of title 40, United States Code.

So that’s one of organized labor’s rewards in the bill, the spreading of above-market wage rates to smaller manufacturers.

Davis-Bacon-like provisions of this sort also make it more difficult for non-union companies to compete for bids. This results in higher costs, which are paid for by taxpayers.

With their share of the private sector work force declining to around 8 percent, unions need such alliances with environmentalists to gain political goods like this. Expect to see more of this.

For more on Davis-Bacon, see here.

Fore more on the labor-green alliance, see here.

The Beacon Hill Institute, which has analyzed several studies of greenhouse gas emissions caps by global warming alarmists in the states, and also conducted a cost-benefit analysis of the Western Climate Initiative, has today released its look at three green jobs studies (PDF). These expert economists reviewed previous studies by the United Nations Environment Programme (never trust anything produced by a program that adds “m-e” on the end — sure to be European), the Center for American Progress, and the U.S. Conference of Mayors. BHI found, in part:

“Contrary to the claims made in these studies, we found that the green job initiatives reviewed in each actually causes greater harm than good to the American economy and will cause growth to slow,” reported Paul Bachman, Director of Research at the Beacon Hill Institute, one of the report’s authors….

The authors of the BHI critique identified a fundamental error in each of these studies, specifically “counting the creation of a green job as a benefit and rationale for its proposed program in and of itself.”

The BHI study also stresses that “Jobs ? green or otherwise ? are not benefits but are instead costs. If the green job is a net benefit it has to be because the value the job produces for consumers is greater than the cost of performing the job. This argument is never made in any of these three green jobs studies.”

The executive director of the Beacon Hill Institute and co-author, David G. Tuerck, went further, noting that “these studies are based on arbitrary assumptions and use faulty methodologies to create an unreliable forecast for the future of green jobs.”

BHI also did a case study of the effect of a cap-and-trade emissions reduction on the states — examining Indiana — and found that “previous reports did not take increased energy costs from a ‘cap and trade’ system into consideration when looking at job creation. In that case, BHI developed a computable general equilibrium (CGE) model and found that contrary to previous studies, Indiana would lose more than 18,000 jobs in 2009, up to nearly 29,000 job losses in 2011, and that real disposable income would be cut by nearly $1 billion in 2009 and close to $1.5 billion in 2011.”

Congressmen on the fence are likely inundated by the data and studies by now — will it overcome the Pelosi/Obama political arm-twisting? We’ll likely know tomorrow.

Like a snowball that gains momentum down a steep hillside, the Waxman-Markey Clean Energy and Security Act (a.k.a “energy tax”) keeps getting bigger and fatter and more dangerous as it works its way through the Democratic caucus to a vote before the full House by the end of the week.

Consider: In only the past seven days, the text of the bill has grown by 300 pages!

Part of the added girth comes from powerful committees that have partial jurisdiction over the bill, and their input has been uniformly awful.

Originally, the Clean Energy and Security Act was designed to tax energy in order to reduce greenhouse gas emissions thought to cause so-called global warming, but Democrats on the Agriculture Committee negotiated pro-ethanol provisions into the legislation, which made a bad bill worse. By forcing Americans to use ever more corn-fuel in their gas tanks, the Congress raises grocery bills (by increasing the price of food) and gives drivers more pain at the pump (ethanol is more expensive that gas). So now Americans face the prospect of an energy tax for so-called global warming, plus an ethanol tax on food and fuel, all in the same bill.

The bill is likely to become even more harmful when the Ways and Means Committee weighs in. The members of that influential Committee want to add language that would force the President to impose carbon tariffs on imports from developing countries such as China and India. They would undoubtedly retaliate with tariffs on imports from American manufacturers. History informs us that a trade war would inflict severe damage on a global economy that is already ailing.

Many of the added pages to the Clean Energy and Security Act result from the House leadership’s aggressive push to buy off members of the Democratic Party with the hundreds of billions of dollars in energy taxes that the federal government would reap from the cap-and-trade energy rationing scheme in the legislation. It’s politically dangerous for many Democratic moderates to vote for an energy tax, so leadership has to make it worth their while. These giveaways and favors, of course, come at the expense of American taxpayer.

And the bill continues to grow, because House leadership still hasn’t accumulated enough votes to pass the bill. There are more people to buy off, more pages to write, and more money to take from Americans.

That is, according to a poll of blacks by the National Center for Public Policy Research. Some findings per NCPPR’s press release:

The poll, released today, suggests anxiety in the black community over Waxman-Markey-style regulations.

The survey of 800 African-Americans included 640 self-identified Democrats (80%) and 32 Republicans (4%).

Among the poll’s key findings:

* 76% of African-Americans want Congress to make economic recovery its top priority, even if it delays action on climate change;

* 38% believe job losses resulting from climate change legislation would fall heaviest on the African-American community.  Only 7% believe job losses would fall heaviest on Hispanics and only 2% believe they would fall heaviest on whites;

* 56% believe Washington policymakers have failed to adequately take into account the economic and quality of life concerns of the African-American community when formulating climate change policy;

* 52% of respondents aren’t willing pay anything more for either gasoline or electricity to reduce greenhouse gas emissions.  73% are unwilling to pay more than 50 cents more for a gallon of gas and 76% are unwilling to pay more than $50 more per year for electricity to reduce U.S. greenhouse gas emissions;

* African-Americans are virtually deadlocked on whether to proceed with plans to reduce greenhouse gas emissions if doing so increases consumer prices and unemployment.

As NCPPR vice president (and my friend) David Ridenour says, “If concern about a Waxman-Markey-style climate change bill is running this high among group of predominantly Obama voters, it’s bound to be much higher among the general population….If Speaker Pelosi ignores these signs of discontent within her party’s base, she does so at her own peril.”

The Competitive Enterprise Institute today charged that a senior official of the U.S. Environment Protection Agency actively suppressed a scientific analysis of climate change because of political pressure to support the Administration’s policy agenda of regulating carbon dioxide.

As part of a just-ended public comment period, CEI submitted a set of four EPA emails, dated March 12-17, 2009, which indicate that a significant internal critique of the agency’s global warming position was put under wraps and concealed.

The study the emails refer to, which ran counter to the administration’s views on carbon dioxide and climate change, was kept from circulating within the agency, was never disclosed to the public, and was not added to the body of materials relevant to EPA’s current “endangerment” proceeding. The emails further show that the study was treated in this manner not because of any problem with its quality, but for political reasons.

“This suppression of valid science for political reasons is beyond belief,” said CEI General Counsel Sam Kazman. “EPA’s conduct is even more outlandish because it flies in the face of the President’s widely-touted claim that ‘the days of science taking a back seat to ideology are over.'”

CEI’s filing requests that EPA make the suppressed study public, place it into the endangerment docket, and extend the comment period to allow public response to the new information. CEI is also requesting that EPA publicly declare that it will engage in no reprisals against the study’s author, a senior analyst who has worked at EPA for over 35 years.

Yesterday, I announced “It’s on!,” in reference to the upcoming battle on the floor of the House of Representatives over a humongous energy tax co-written by Rep. Henry Waxman (D-Beverly Hills), the Chairman of the powerful House Energy and Commerce Committee, and Rep. Ed Markey (D-Massachusetts), the Chairman of the Select Committee on Energy Security and Global Warming. The bill they wrote, the Clean Energy and Security Act,  is a Frankenstein-like patchwork of anti-energy and energy rationing measures designed to make energy more expensive and less reliable, which is why Waxman had a heck of a time getting the bill out of his own Committee last month. In fact, he had to buy off moderate Committee members from his own party, one by one, with the hundreds of billions of dollars that the federal government would tax American energy consumers over the life of the legislation.

Moving it out of his own Committee was a slow process, and earlier this week, few observers thought that Waxman had the time to buy off all the moderate members of the majority party caucus before the July 4th vacation. But two nights ago, House leadership took the procedural steps to put the energy tax before the full House for vote by Friday.

As of yesterday afternoon, the bill’s passage still seemed uncertain, because almost all Republicans were lined up against it, and a band of moderate and rural Democrats, perhaps as many as 45, had expressed a variety of misgivings and were negotiating with Waxman through Rep Colin Peterson (D-Minnesota), the powerful Chairman of the House Ag Committee. Waxman and the House leadership need 218 votes to pass the anti-energy bill, so it was far from certain that they had the numbers.

That changed last night, when Waxman and Peterson reached a deal, according to E&E News (Subscription required). It wasn’t a very even transaction: Waxman caved, and Peterson won everything he wanted. The terms of the deal are wonkinsh but the take-home points are simple-farmers get regulatory support for ethanol (which raises our food bills and increases the price of our gas), farmers will get paid to grow nothing (because doing nothing has low carbon footprint), and Waxman gets the votes for his bill (which will raise the price of everything made from energy, which is everything).

After round 1, our side (i.e., supporters of affordable energy and opponents of energy rationing) is wobbly. YET THERE IS STILL HOPE! For moderates in the majority party, this bill is a career-killer. Just because Waxman has bought the agribusiness special interests, doesn’t mean there isn’t within the majority party a silent minority that is terrified of the electoral consequences of voting for a bill that hurts all American consumers and all American businesses.

Word has it that the Waxman-Markey cap-and-trade/energy tax bill is finally hitting the floor of the House, probably this Friday. CEI is decidedly in the “anti” camp. To that end, we released a statement this morning by Director of Energy and Global Warming Policy Myron Ebell on the legislation and its potential impacts:

Waxman-Markey is a 1,201-page economic suicide note. Those Members of the House who vote for it are voting for long-term economic decline and for turning the United States into a second-rate economy.

Take that, Henry and Ed! But there’s more. Yesterday The Hill published an op-ed on cap and trade by Bob Murray, CEO of Murray Energy and a member of CEI’s advisory council:

Perhaps the most destructive legislation in our country’s history will soon be voted on in the House — the Waxman-Markey tax bill in the guise of addressing climate change. It will have dire consequences for every American. It will raise the cost of energy with little or no environmental benefit. Independent experts estimate that it will cost Americans more than $2 trillion in just over eight years.

CEI and the Cooler Heads Coalition were also mentioned in a story on the Waxman-Markey bill (”Lobbying Frenzy Begins as House Climate Bill Heads for Floor”) by Greenwire reporter Darren Samuelsohn which was republished online by the New York Times:

House Speaker Nancy Pelosi’s plan to bring a major climate and energy measure to the floor Friday has prompted a whirlwind of lobbying.

[…]

Opponents are also readying themselves for the floor battle, with the Cooler Heads Coalition, an ad hoc group of scientific skeptics and legislative critics, planning a special meeting today to organize for the vote. “It’s gonna be fun,” Myron Ebell, director of energy and global warming policy at the Competitive Enterprise Institute, wrote in an e-mail announcing the meeting.

That’s CEI for you – we’re merry warriors for freedom. More links and background info below.

6/23/09 –Did the CBO Underestimate the Cost of the Waxman-Markey Energy Tax? by William Yeatman

6/9/09 – Behind the Cap and Trade Curtain by Max Schulz (Manhattan Institute)

6/1/09 – Corporate Welfare on a Vast Scale: Obama’s Cap-and-Trade Scam Threatens Economy by Hans Bader

5/7/09 – CEI Sponsors Anti-Climate Tax Pledge by William Yeatman

5/5/09 – Chris Horner on the White House Energy Summit [TV interview]

4/23/09 – CEI Expert Warns Aginst Central Planning in Testimony Against Cap and Trade, by Kevin Mooney

4/22/09 – Testimony Before the Committee on Energy and Commerce by Myron Ebell

4/6/09 – Myron Ebell on Cap and Trade [TV interview]

3/24/09 – $2 Trillion Tax from Obama: Hidden Costs of “Cap-and-Trade” Scheme by Hans Bader



Before the House of Representatives votes on the Waxman-Markey Clean Energy and Security bill (a.k.a, the “biggest tax increase in the history of mankind”), members of Congress should know how much the legislation would cost American consumers in the form of higher energy prices. To that end, the Congressional Budget Office recently “scored” the Waxman-Markey energy tax, and it found that the bill would cost a seemingly affordable $175 per household. The green lobby rejoiced-this was just the “proof” it needed to convince legislators wary of a voting for a politically dangerous tax hike.

But is the CBO’s figure reliable? According to the Heritage Foundation, the Congress is getting conned by the CBO, which “grossly” underestimated the costs of the Waxman-Markey energy tax.

Click here, for a post by Heritage scholars that explains why the CBO’s estimate of the Waxman-Markey energy tax is far too conservative.

Check out this great letter to The Hill, on how the stakes for the Waxman-Markey energy tax couldn’t be any higher, from a gentleman who fights on the front lines against this awful legislation.

(From The Hill)
Perhaps the most destructive legislation in our country’s history will soon be voted on in the House – the Waxman-Markey tax bill in the guise of addressing climate change. It will have dire consequences for every American. It will raise the cost of energy with little or no environmental benefit. Independent experts estimate that it will cost Americans more than $2 trillion in just over eight years.

The Midwest, South and Rocky Mountain regions will be most drastically affected because the climate change legislation will destroy the nation’s coal industry and the availability of low-cost electricity. Wealth will be transferred away from almost every state to the West Coast and New England.

The most abundant and by far least-expensive energy source in our country for generating electricity is coal. America’s coal reserves rival the energy potential of Saudi Arabian oil. Unfortunately, the proposed climate change legislation in the House forces America to throw away this tremendous resource, and our low-cost electricity with it.

The Waxman-Markey bill sets an unattainable cap on carbon dioxide emissions by 2020, with the first reductions due by 2012. Under the program, businesses that emit carbon dioxide would be required to purchase or obtain from the government special carbon dioxide credits. This carbon dioxide cap will force utilities to switch from lower-cost coal to natural gas or other, more expensive energy sources. Reliable estimates show this bill will increase the cost of energy for each American family by at least $3,000 each year, notwithstanding the $2 trillion cost to the economy in just eight years.

The supporters of this misguided legislation point to two provisions that they claim will help coal. The first is that they give electric utilities free credits. However, those credits are worth millions of dollars, and the utilities will be free to sell the credits and use the proceeds to build more expensive natural gas or nuclear power plants, and not use our lowest-cost fuel – coal. Second, the authors of the legislation invest money in carbon capture and storage technology, claiming that this will save jobs. But, this technology will not be commercially available for at least 15 to 20 years, long after the reductions are required in 2012 – and long after our coal plants are shut down and our manufacturing jobs are exported to China, India and other countries.

It is not too late to tell Congress to kill this flawed bill. Everyone should call their congressional representatives and ask them to vote no on the Waxman-Markey climate bill and to support affordable energy, American jobs and our quality of life.

By Robert E. Murray, chairman, president and CEO, Murray Energy Corp.
Pepper Pike, Ohio