Climate bill passes with consumers cut out of the cash flow
Image by Getty Images via Daylife
The American Clean Energy and Security Act passed the House this evening, minus one of the most attractive aspects of its early drafts: a big money circle in which the government would auction pollution permits to industry and pass along the income–as much as $600 billion–to American taxpayers. In theory, the tax cuts would reimburse consumers when utilities raise rates to cover their cost for the permits.
By the time the bill reached the House floor, that provision had vanished. The utility companies and their friends in Congress eliminated the middle man–you, me, and everyone else in America–and 85 percent of those permits will go directly to the utilities at no cost. In theory, again, this means the utilities won’t have to raise rates–but can we really believe they won’t take advantage of the fog of politics to add a little fat to our bills? They usually find a way, even though one of the biggest utilities, Exelon, estimates it could make as much as $1 billion per year from the law.
Those concessions to industry could worsen in the Senate version, which is expected in September. Democrats hope to have the bill on President Obama’s desk before the end of the year.
Ann Mulkern of Energy & Environment Daily has documented the money passing between the utilities and legislators who cut consumers out. Not only have the energy companies been lobbying:
For the 10 energy interests analyzed, the oil and gas industry led the pack on spending. It shelled out $44.5 million in the first three months of this year, compared with $30.1 million spent in the same quarter in 2008.
For all of last year, oil and gas spent $130 million, at the time a record for the industry. If the pace set by this year’s first quarter continues, it would result in a $178 million lobbying total for the year.
Exxon Mobil Corp. spent the most within that group, paying $9.3 million on lobbying the first quarter of this year. Last year the company spent $29 million, its highest level ever. Oil and gas companies lobby on climate policies but also on tax issues, royalties, offshore drilling and other issues…. Oil and gas companies spending nearly 10 times what environmental groups spent.
via Greenwire (subscription required)
But members of Congress have been investing in energy companies:
Members of Congress with key roles crafting legislation that would transform the United States’ energy portfolio laws own as much as $22.8 million in stocks, bonds and other assets of companies potentially affected by policy changes.
An analysis of personal finance disclosure filings released last week shows that 45 members of seven committees last year owned stakes in utilities, fuel and natural gas businesses, mining, coal, solar, wind, exploration and production companies.
Lawmakers put their private dollars into household names such as Exxon Mobil Corp., BP, ConocoPhillips, Edison International, Duke Energy Corp. and Southern Co.
via E&E (subscription required)
Nonetheless, the House managed one small step for mankind today, one giant leap for America, where not long ago climate-change legislation seemed inconceivable. And by not long ago, I don’t mean 2008. I mean early May, when it seemed Democrats might not be able to line up their horses to pull the bill out of committee. The bill needed 218 votes to pass and finished with an insurance run: 219-212.
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Sometime back I really appreciated you showcasing Pat Veesart’s viewpoint on Big Green, the successor to Big Oil. And here we have it. The revolution will be accomplished by subsidy to Big Green. Much as I like Obama I would prefer he went the Less-is-More route.
Still, I do like this bill in that it raises prices. Conservation by means of corporate profiteering. What a concept! Just like the CA electricity crisis. And no one goes to jail.
Certainly this bill is a start. But I gotta wonder if it’s a start down the same old road.
Love it or hate it, capitalism seems to be the engine we’ve got, Bob, and if it can be put to good uses, it seems worth a try. I share your concern that those uses may always spell doom for resources (see “The Story of Stuff“). It would certainly be better to launch a more equitable system, or as you’ve suggested, a smaller one, but didn’t a good portion of the world try that already, rather fanatically, but without much luck?
In response to another comment. See in context »What we need in the words of Garrett Hardin, in the Tragedy of the Commons, is to optimalize “mutual coercion, mutually agreed upon.” In capitalism we have little coercion, but mutually agreed upon. In Marxism they had lots of coercion, but little agreed upon.
“Conservation,” as you well-note, is a coercive word, gravid with anti-capitalist sentiment. And I think we need to use it.
But I’ll cut a compromise. I’ll settle for Obama using “sustainable” instead. It’s much less coercive and even fair-to-middlingly pro-capitalism–though far from the capitalist doctrine of infinite material progress, growth.
Please let me know when “sustainability” pops up in one of Obama’s speeches. *That* is something to run with.
I don’t think it means much, but fyi, he used that word twice yesterday, Bob, at his noon press conference after meeting with Chancellor Merkel:
“As we prepare for the G8 summit in Italy and look ahead to the G20 summit in Pittsburgh, we agreed on the need to avoid protectionism and to embrace concerted, collective action that creates sustainable growth and shared prosperity…. We talked about climate. Just as I did this morning when I was in Congress, I said that this is indeed a sea change that I see this upcoming bill that was debated today in the House on climate. That this really points to the fact that the United States is very serious on climate. And this has — it should not be underestimated what sort of opportunity this brings to us to come to a good, a sustainable result during the Copenhagen conference.”
In response to another comment. See in context »I agree that it doesn’t mean much because in the first case he used it as That Big Green Oxymoronoid: “Sustainable Growth.” In the second case, “sustainable result”, it does not refer to ecological sustainability, but to a political process.
In response to another comment. See in context »But, hey, I have faith in him. He plays every issue as if it’s a chess game and he’s thinking fifteen moves ahead. Watch the nuances he brings to the “immigration conversation” he just started. I’ll bet in the end the Clinton/Bush open-borders policy will be terminated and there will be no easy amnesty. As in “a sustainable nation living within its ecological, economic and political boundaries.”
Bob
I cannot say I agree with your analysis, though I think it the very best and most reasoned I’ve heard on your side of the fence. The bill that passed through congress is arcane, full of problems and will raise taxes, hurting the economy and prolonging recession. It’s over 1,000 pages long and I’ll bet a lot of money–even a little money–that not one congressional representative read the whole thing and barely knows what it’s about. Thank God for the Senate who will most likely not pass the bill. But then, I’m a skeptical conservationist in the true sense of that term.
Congress’s legislation will not change anything about “our planet.” Nor will much that anyone does, other than the common sense things. I’m certainly not for going back to the Cuyahoga river of 1968. I was born near there and lived in Ohio for a time. I don’t think it’s impossible to have capitalism and conservationism, either. And I’m rather stunned that in the 21st Century, we’re talking about capitalism as a destructive force? So, Communism and Socialism were good things? Someone will have to explain that to me…
Still-a thoughtful and well reasoned post. I only wish the world worked the way environmentalists writ large (read: true believers) think it does.
Thanks for your perspective, Mark. I think your statement about capitalism and mine (in my note to Bob), have more in common than you suggest, but capitalism’s hunger for resources will be difficult to beat into a circle, don’t you think? What common sense things do you recommend for changing the planet? And most importantly, what’s a good wine to go with this conversation? I’m looking forward to your posts.
En veritas/vino?
I have to laugh at “what wine goes with this conversation..” You’re right, of course–our capitalist perspectives are probably closer than I commented.
I don’t think of it in terms of “changing the planet.” I come from a Christian perspective with a healthy dose of what Annie Dillard called “Christian Transcendentalism” thrown in.
Stewardship of resources is important, but the resources aren’t gone–and they may not even be finite as far as we know. There’s still a lot of oil out there. And even though cars do need to get better efficiency and mileage, I remember growing up in the San Fernando Valley of So. Cal riding my bike to the mall and coming home with painful lungs–truly painful. The smog was so bad, the air was so bad–it hurt. That doesn’t happen now 30 years later. And there are twice the cars on the street.
I believe in good stewardship and this is why I am an organic and bio-dynamic food and wine nut. Truly, to me it’s the way to go. But I don’t think politicians meddling in schemes to raise my taxes will “change the planet.” And I’m not entirely sure the planet needs changing. Some of its people do–the Iranian Mullahs come to mind—but that’s where my head is.
So–with this conversation? I’m thinking a bio-dynamically grown Southern Rhone, Grenache would be nice. Thanks for your thoughtful pieces, Jeff.
A Grenache sounds perfect for this weather, too: damp heat breaking for cool rain. Cheers, Mark, and here’s to Annie Dillard.