The Rising Influence of Rising Affluence

[DewDiligence]

House Passes Climate Bill—Barely

[In my humble opinion, this is the stupidest piece of legislation in a long, long time. The tally in the House was 219-212. Now it’s on to the Senate.]

http://online.wsj.com/article/SB124602039232560485.html

›JUNE 26, 2009, 7:24 P.M. ET

WASHINGTON – In a triumph for President Barack Obama, the Democratic-controlled House has narrowly passed sweeping legislation calling for the nation's first-ever limits on pollution linked to global warming.

The bill also aims to usher in a new era of cleaner, yet more costly energy.

The vote was 219-212, capping months of negotiations and days of intense bargaining among Democrats. Republicans were overwhelmingly against the measure, saying it would cost jobs in the midst of a recession.

The 1,200 page bill -- formally known as the "American Clean Energy and Security Act" -- will reach into almost every corner of the U.S. economy. By putting a price on emissions of common gases, such as carbon dioxide, the bill would affect the way electricity is generated, how homes and offices are designed, how foreign trade is conducted and how much Americans pay to drive or to heat their homes.

The House climate bill would give a big boost to a number of nascent industries, such as wind-generated electricity and solar power. The bill would mandate that 15% of the nation's electricity come from sources such as wind and solar power by 2020 [which does nothing to address US reliance on foreign sources of energy for the transportation sector], greatly expanding the market and profit potential for investors in those sectors and potentially creating thousands of new jobs.

But it isn't clear how much of the sprawling House measure will survive in the Senate, where moderate Democrats and Republicans could form a majority that backs less ambitious action. Among the potential problem areas in the House bill is a provision that would impose tariffs on goods imported from countries that don't match U.S. carbon dioxide restrictions -- a slap at China that some business interests fear could provoke a trade war.

Mr. Obama and House leaders struggled to win over a large group of rank-and-file Democrats who expressed doubts about the climate bill. The president lobbied hard personally and through aides to secure votes from wavering members over the past several days.

Mr. Obama and other Democratic leaders insisted the measure will spur job-creating investments in "green" technologies, while lessening U.S. reliance on foreign oil. They said the fear that higher energy costs will result is overblown, in part because savings from energy-efficiency investments could offset most or all of the costs to consumers.

"The need to act is clear and urgent," said House Energy and Commerce Committee Chairman Henry Waxman. The California Democrat is the chief architect of the bill, along with Rep. Edward Markey of Massachusetts.

The nonpartisan Congressional Budget Office estimates the bill would have a modest impact on family budgets. The CBO projects an annual economy-wide cost in 2020 of $22 billion, or about $175 per household.

But Republicans said that estimate lowballs the actual cost for families, and they have noted that a CBO report last year said a tax on emissions would be "the most efficient, incentive-based option" for cutting emissions. They said the measure amounted to a job-killing tax on consumers and businesses. "The Waxman-Markey bill promises to destroy our standard of living," said Rep. Frank Lucas (R., Okla.).

The big-money piece of the bill is a proposal to require companies to buy permits to emit carbon dioxide and other greenhouse gases [what about water vapor?] that scientists have linked to changes in the earth's climate, causing such phenomena as melting polar ice caps. The bill would put caps on those emissions, with the goal of reducing overall U.S. greenhouse gas emissions by 17% from 2005 levels by the year 2020, and 83% by mid-century.

In a series of deals meant to ease the impact on businesses and their customers, Democratic leaders agreed to give away to the business community more than 60% of pollution permits in the early years of the program.

The concessions would benefit electricity-producing utilities, oil and gas refiners, auto makers and trade-sensitive industries such as steel and cement, giving them a 10-year window to make the investments needed to reduce emissions and comply with the long-term caps. [I have a problem with calling these “concessions.”]

After 10 years, companies would start paying for the permits.

Supporters say the bill will have a modest impact on electricity ratepayers, and in many cases will save them money. That is because the legislation directs state regulators to make sure electricity-producing utilities that receive free pollution permits pass along the savings [LOL].‹