The Senate Environment and Public Works Committee managed to clear their latest cap and trade proposal, which seeks a 20% cut in greenhouse gas emissions by 2020. But it did it so without any Republicans or Senator Max Baucus (D-MT) on board. Of course, Republicans and Democrats not agreeing isn't exactly shocking. But what I do find notable is the Republicans' rationale for not voting: economics.
The Wall Street Journal reports:
Republican members of the committee boycotted the vote to protest a lack of a complete analysis of its potential economic impact. Republicans have called the Senate climate measure and a similar measure passed by the House of Representatives a "tax" that the country can ill-afford at a time of high unemployment and economic uncertainty.
That's true: the measure essentially amounts to a tax. It will cost businesses that need to reduce emissions. While that may be desirable from a long-term environmental standpoint, from a short-term economic standpoint, it's extremely dangerous. Raising taxes when an economy is struggling to recover from the worst recession in memory is arguably the worst thing the government can do.
Meanwhile, Senator Baucus was concerned not so much with economics or broader business but with what the bill's passage would mean for Democrats from regions with coal- and manufacturing-dependent economies. With a mid-term elections next fall, Republicans from those districts would criticize their Democratic opponents who voted to make things more difficult for local businesses when unemployment was near 10%.
At this point, it looks like getting a climate change bill to the President's desk will be even more challenging than health care reform. That might be hard to imagine, but Blue Dogs will likely be even more concerned about a proposal that serves as a tax on businesses during a time of economic hardship than a health care bill which would increase the deficit and taxes in the long-term.
Given all of that, I'd be pretty surprised if an aggressive climate bill passed in 2010. Baucus and the Blue Dogs might support such a bill eventually -- once the economy is back to full strength. But to pass a bill in the near-term, it would likely have to be far weaker, as too many Democrats agree with Republicans that putting additional strain on businesses right now just doesn't make sense.
Please remember that the cap and trade bill does nothing by itself to affect global warming. At best, it's a step on the way to getting the rest of the world to also agree to cuts.
Without cooperation from China, India, and other fast growing countries, the U.S. and European systems are worthless.
Agree with article,
in fact Emission Trading / Industrial Carbon Taxes / Energy Efficiency Regulations, are all wrong
Assuming a need in the first place to deal with emissions,
(which may be advantageous in terms of lowering all else they contain, whatever about CO2), then
ELECTRICITY generation (coal, gas) and TRANSPORT (mainly automobiles) alone account for nearly 80% of fuel combustion emissions
Dealing directly with these sectors alone,
with emission tax (for cars, allowing free choice)
and emission caps (for electricity generation)
rather than Cap and Trade,
is therefore enough to meet initial emission reduction targets,
simplifies negotiations,
and has several advantages:
1. Local environmental benefit from less pollution of sulphur and all else that’s in the emissions, regardless of the less certain or immediate global benefit from CO2 reduction – and that is one reason why the focus on carbon trading is wrong, compared with the focus on reducing fuel combustion emissions.
2. Electricity supply alternatives which together with improved grid distribution gives better competition and keeps down electricity bills for consumers.
3. Transport alternatives (using electricity, hydrogen and other energy sources), which also reduces the dependency on oil imports.
Funding and Impact
Equity and long term loan finance can be used: Long term industrial loans from financial institutions, particularly if federal/state guaranteed, give low yearly interest repayments and lessen the effect on electricity bills or transport cost.
The impact on the businesses is further lessened by the stability and predictability surrounding the funding.
Since only electricity and transport are involved, other business continues as usual and consumers and society in general are spared expense and disruption.
This is even more obvious from energy efficiency regulation not being necessary either.
No Trade Problems
Unlike with Cap and Trade, that involves cement, steel and other industries having to face imports from unregulated countries, electricity and transport changes are not just more limited, but also largely local.
Compare with
today’s all-encompassing Cap and Trade (emission trading) suggestions, with unpredictability, expense, and needless disruption from normal business practice on one hand, or unnecessary profiteering from free allowance handouts with little actual emission reduction on the other hand
– together with extensive energy efficiency regulation on what people can or can’t buy and use.
Emission Policy Alternatives
http://ceolas.net/#cce1x
Introduction: The need - or not - to deal with emissions
The Overall Picture
Emission sources, land and ocean cycles, agriculture and deforestation
1. Direct Industrial Emission Regulation
Mandated reduction of CO2, monitored like other emission substances
2. Carbon Taxation
Fuel Tax -- Emission Tax
3. Emission Trading (Cap and Trade)
Basic Idea -- Offsets -- Tree Planting -- Manufacture Shift -- Fair Trade -- Surreal Market -- Allowances: Auctions + Hand-Outs -- Allowance Trading -- Companies: Business Stability + Cost -- In Conclusion
4. Contracted CO2 Reduction
Private companies compete for contracts to lower CO2 emissions.
.