Elements of the climate change bill before Congress could treat different areas of the country unfairly, and result in higher costs nationwide, a top Blue Dog Democrat on energy issues said Friday.
"I think it will greatly reduce the ability to hedge risk, and that means higher costs for consumers on all commodities," Rep. Jim Matheson (D-Utah) said in an interview. "The market-related language, which wasn't a top-line issue on this bill, has far-reaching implications that I think would really be going in the wrong direction."
Matheson said that some elements of the bill could also enrich some areas of the country at the expense of others.
"We're talking about one national standard for renewable energy production," he said. "Well, some parts of the country are going to have a better ability to achieve that standard, and there are penalties if you don't achieve it."
While Matheson said he believes climate change is real and must be dealt with, "the devil is in the details."
Indiana Gov. Mitch Daniels (R) went on the offensive against the cap-and-trade energy bill pushed by Democrats in Congress and supported by President Obama, arguing it has "no chance" of achieving its goals in the Republican weekly radio address.
President Obama will significantly increase Corporate Average Fuel Economy (CAFE) standards, possibly as early as tomorrow.
The NY Times reports that Obama will combine the more stringent mileage standards California has adopted with existing CAFE standards to create a single, national standard. Environmentalists will be pleased with the higher targets, while automakers have long sought a national standard.
Mileage standards will rise 30% by 2016 under the new rules, which demand 42 MPG for cars and 26.2 MPG for light trucks.
Global Warming Subcommittee Chairman Edward Markey(D-Mass.) said that his committee's climate change bill is the "legislative Susan Boyle -- everyone underestimated it until it started to sing."
Susan Boyle entered the international spotlight back in April after she wowed the audience and judges on "Britain's Got Talent" with her voice, despite her unpolished look.
On Thursday the Energy and Commerce Committed released their climate change bill, bringing a key democrat on board, Rep. Rick Boucher (D-Va.). Markey was joined by Committee Chairman Henry Waxman (D-Calif) and Boucher at a briefing announcing his support for the legislation.
Well this complicates things. Reps. Jeff Flake (R-Ariz.) and Bob Inglis (R-S.C.) have proposed a carbon tax as an alternative to Democrats' cap-and-trade legislation.
The legislation would tax carbon at the rate or $15/ton, rising to $100/ton over three decades.
For months, House Republicans have been blasting cap-and-trade as the equivalent of a tax on energy, a message which seems weaker now that two very conservative Republicans have proposed a direct tax themselves.
For example, consider, House Minority Leader John Boehner's recent statement:
"Cap and trade is code for increasing taxes, killing American jobs and raising energy costs for consumers...The so-called 'cap and trade' proposal amounts to a carbon tax, plain and simple."
Now Flake and Inglis have their own "plain and simple" carbon tax.
To be fair, the legislation would reduce the payroll tax to compensate for the rising price of energy, leading to a "tax neutral" bill, Flake says. (Democrats are likely to refund almost all of the revenue from cap-and-trade structure to taxpayers, mitigating the public cost of their own plan as well.)
What's interesting here is that there has been a debate on the left over whether a carbon tax is superior to cap-and-trade. Proponents of the tax say it's simpler, more enforceable, and easier to adjust over time. Cap-and-trade supporters respond that a carbon tax is simple in THEORY, but once lobbyists carve out endless loopholes and exceptions, it will be just as complicated as any other part of the tax code. Plus, if you implement a tax as a disincentive, you have to guess what tax level will produce the desired amount of emissions. With cap-and-trade, you simply set a ceiling.
It's unlikely Flake's and Inglis's legislation will get anywhere; it's more likely a strategy to peel off wavering Democrats from cap-and-trade, which is very tenuously advancing to a committee vote. Stay tuned to see how coal-state Democrats like Rep. Rick Boucher (D-Va.) respond to this.
Sen. Lamar Alexander (R-Tenn.), whose opposition to wind towers makes him something of a Don Quixote in the Senate, said Wednesday that the U.S. should rely more on conservation and nuclear power than on renewable energy to cut carbon emissions.
The basic problem with solar and wind power, Alexander said, is the sun doesn't shine and the wind doesn't blow all the time. That means the wind and the sun can't be relied upon to deliver electricity precisely when Americans need it, unlike coal, nuclear and natural gas can be. Renewable energy should be seen as a supplemental source of power, Alexander said at an event sponsored by the U.S. Chamber of Commerce's Institute for 21st Century Energy.
While Alexander is suspect of all renewable energy as an economic source of power production, he holds particular enmity for wind.
The Energy Department has said that wind power could generate as much as 20 percent of the electricity demand in the United States, so long as there are enough transmission lines to carry the power from the remote areas where wind blows the hardest to cities that eat up the most electricity.
But just because wind towers are carbon free, doesn't mean they don't have any environmental footprint, Alexander indicated. He said reaching the 20 percent target would require the installation of turbines over a land mass equal to the state of West Virginia. Wind power, he said, could "obliterate the American landscape." He particularly is fearful of views in his beloved Great Smoky Mountains National Park could be despoiled by giant turbines.
House Democrats are much more bullish on renewable like wind. Their climate bill now under discussion calls for utilities to produce 15 percent of their power from renewables like wind energy by 2020, although a portion of that requirement could come through energy efficiency gains.
Alexander told The Hill after his address that he didn't give the House bill much chance of passing the Senate for reasons other than its renewable electricity standard. The bill would touch too many American industries, he said.
Instead, Alexander said efforts to combat global warming should focus on the smokestack and the tailpipe, i.e. the utility and transportation sectors, which combined account for 70 percent of the carbon dioxide emitted annually in the United States.
Alexander agrees the issue driving the interest in carbon-free renewable energy -- global warming -- is real and at least in part caused by humans. His proposal calls for building an additional 100 new nuclear plants, about twice as many as are now in operation, in the just the next 20 years. Energy efficiency programs and other efforts to cut electricity usage like expansion of a smart grid that would better match demand with supply should also be supported, Alexander said.
Suggestions that the Office of Management and Budget (OMB) was opposed to the findings of an Environmental Protection Agency (EPA) report on greenhouse gases are "unfounded," OMB's director said late Tuesday.
An OMB memo leaked Tuesday had indicated that conclusions in the EPA report were based on potentially faulty evidence, and that regulations as a result of the report would likely harm the economy.
He said that the OMB's report simply reflected a variety of other agencies' opinions, and don't necessarily reflect the views of the OMB.
"In other words, we simply receive comments from various agencies and pass them along to EPA for consideration, regardless of the substantive merit of those comments," Orszag wrote. "In general, passing along these types of comments to an agency proposing a finding often helps to improve the quality of the notice."
Orszag said his office wouldn't have concluded its review of the EPA report if it were concerned about its consistency with the law or "underlying science."
An EPA finding last month that greenhouse gases are a danger to public health rests on dubious assumptions and could have negative economic impacts, a memo from the Office of Management and Budget (OMB) warned.
The memo has no listed author but is marked "Deliberative--Attorney Client Privilege." A spokesman for OMB told Dow Jones Newswires that the brief is a "conglomeration of counsel we've received from various agencies" about the EPA finding, the conclusions of which would trigger regulation of greenhouse gases under the Clean Air Act.
The author(s) of the memo suggest the EPA did not thoroughly examine the relationship between greenhouse gases and human health.
"In the absence of a strong statement of the standards being applied in this decision, there is concern that EPA is making a finding based on...'harm' from substances that have no demonstrated direct health effects," the memo says, adding that the "scientific data that purports to conclusively establish" that link was from outside EPA.
Additionally, the new regulations triggered by the finding would likely harm the economy, the brief warns.
"Making the decision to regulate CO2...is likely to have serious economic consequences for regulated entities throughout the U.S. economy, including small businesses and small communities," the memo reads.
Finally, in language sure to anger climate change activists, the memo questions whether climate change might bring benefits that would mitigate the costs.
"To the extent that climate change alters out environment, it will create incentives for innovation and adaption that mitigate the damages," the memo reads. "The [EPA finding] should note this possibility[.]"
The memo goes so far as to suggest that global warming might be a net positive for certain regions of the United States.
"It might be reasonable to conclude that Alaska will benefit from warmer winters for both health and economic reasons," the authors note.
At a Senate hearing today, Sen. John Barrasso (R-Wyo.) grilled EPA administrator Lisa Jackson about the memo.
"This is a smoking gun," Barrasso said, accusing the EPA of making the finding for political reasons.
Jackson responded that the finding was based on science and was in no way politicized.
"That analysis had been done really before I took the oath of office," Jackson said.
She acknowledged that curbing climate change might have economic impact, and added that the costs could be minimized through the administration's favored cap-and-trade system.
"We do understand that there are costs to the economy of addressing global warming emissions, and that the best way to address them is a gradual move to a market-based program like cap-and trade," Jackson said.
Former President Jimmy Carter will appear before the Senate Foreign Relations Committee this week to testify about "energy security," the committee announced Monday.
Carter will appear on the Hill tomorrow afternoon at a hearing entitled "Energy Security: Historical Perspectives and Modern Challenges."
Carter is in a unique position to speak about the historical perspective on energy security. His time in the White House saw the energy crisis of 1979, in which the Iranian Revolution resulted in an oil shortage and high gasoline prices.
The struggles with Iran and the energy crisis contributed, in part, to Carter's defeat during his reelection bid in 1980.
A new Rasmussen poll released today indicates the public debate over cap-and-trade is still undefined. In fact, people have no idea what it is.
Well, not NO idea.
Rasmussen asked voters what issue "cap and trade" dealt with, presenting three options: healthcare, Wall Street, or the environment.
Just 24% correctly chose "the environment." 29% chose Wall Street, and 17% chose healthcare. A plurality--30%--said they didn't know.
In the same poll, 69% of respondents said healthcare is a bigger priority than global warming (15% chose the latter.) That question is not arbitrary. Congressional negotiations over cap-and-trade are making progress, but many Democrats are nervous that the legislation will take a back seat to healthcare. From today's NY Times:
[T]here is also a hint of nervousness that Waxman, who took over this year as the new chairman, may still stumble and be forced to drop the climate issue altogether -- to begin work on health care -- because of a lack of votes from some of his own moderate party members. Few dispute that would be a huge blow to President Obama's domestic agenda.
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