Cooler Heads Digest

News Highlights

Schwarzenegger’s Climate Team Further ImplodesEditorial, The Bakersfield Californian, 19 July 2007

 

Ethanol Mandates Pose Grave Risk to Chesapeake Bay David Fahrenthold, Washington Post, 17 July 2007

 

New UK Science Chief Advocates Humans Stop Reproducing to Fight Global WarmingRobin McKie, The Observer, 22 July 2007

 

Lunacy of EU Climate Change LawsChristopher Booker, Sunday Telegraph, 23 July 2007

 

Inconvenient Truth’s Carbon FootprintSteven Milloy, Foxnews.com, 19 July 2007

 

Are We Falling for the Great Green Con?Editorial, thisislondon.co.uk, 23 July 2007 

Kyoto Anniversary: What It Means TodayMyron Ebell, Human Events, 25 July 2007

 

Enviros Challenge Coal Energy in TexasAP, Dorbes.com, 24 July 2007

 

Issue Analysis

Inside the Beltway

CEI’s Myron Ebell

 

Senators Joseph Lieberman (I-Conn.) and John Warner (R-Va.) have begun to write a cap-and-trade bill to reduce greenhouse gas emissions that they hope everyone can love. They are chairman and ranking Republican respectively on the subcommittee of the Environment and Public Works Committee which has jurisdiction over the issue, so what they decide is important.

 

At a subcommittee hearing on July 24, they announced that they intend to release a draft summary of their bill before the August recess, then introduce the bill when the Senate returns in early September, and mark it up in subcommittee before the end of September. That is an ambitious schedule, and schedules usually tend to slip in the Senate, but that is their plan.

 

Warner also released an amendment that is designed to limit the costs of complying with mandated emissions reductions under a cap-and-trade scheme. It includes a credit card, so that if the price of carbon credits exceeds official government estimates, companies could charge for the credits they need and pay for them later plus interest. Warner’s proposal would also create a Carbon Market Efficiency Board, designed along the lines of the Federal Reserve Board.

 

Warner is trying to find an alternative to the cap-and-trade bill introduced recently by Senators Jeff Bingaman (D-NM) and Arlen Specter (R-Pa.).  Their bill, S. 1766, includes a safety valve price for carbon credits of 12 dollars per ton of CO2. Most environmental pressure groups and Senator Barbara Boxer (D-Calif.), chairman of the Environment and Public Works Committee, are adamantly opposed to a safety valve. Warner’s alternative will test whether they are opposed to any limits on costs.

 

The House Democratic majority leadership announced on Monday that it will bring anti-energy legislation to the floor for debate and a final vote next week. But they are still arguing over what should be in the bill(s) and what amendments they will allow to be offered. So I have little to report. The bad news is that it will all be bad. The good news is that the Congress is scheduled to leave for their August recess at the end of next week.

 

CEI is circulating a joint letter on some of the possible key provisions in the anti-energy package for signatures by non-profit groups, which will be sent to members of the House when the debate begins next week. If your group is interested in signing the letter, contact CEI at [email protected].

 

Across the States

American Legislative Exchange Council’s Dan Simmons

California’s radical climate change agenda faces a significant test after having sparked an interstate legal battle with Utah. Last year, California passed into law a regulation (S 1368) stipulating that California utilities can invest only in power plants that are as clean as the cleanest natural gas fired power plants. By prohibiting investment in ‘dirty’ power plants (i.e., coal-fired plants), the government of California figured it could slowly squeeze out coal power from the Golden State. The problem is that southern California, including the LA megalopolis, imports about 40% of its energy from coal-fired power plants in other states.

 

One such plant, the Intermountain Power Agency (IPA) facility in Utah, serves both States. To meet growing energy demand in Utah, IPA planned to expand its power plant. Under S. 1368, however, California utilities had no other choice, but to threaten to terminate their contracts with IPA unless it shelved the proposed expansion.. Because southern California buys most of the energy produced by IPA, it is a very influential customer, and the IPA accordingly dropped the proposed expansion.

 

That California’s environmental regulations could dictate Utah’s energy policy did not sit well with energy consumers in the Beehive State. Last week, two local electric utilities, Utah Associated Municipal Power Systems and Rocky Mountain Power, announced their intention to sue IPA and the Los Angeles Department of Power and Water to get the power plant expansion back online. 

 

Now the action moves to the courts. Perhaps a protracted legal battle will give California policy makers pause and allow them to think through exactly how they intend to provide affordable electricity to much of southern California if the government maintains its ban on coal energy.

 

Around the world

CEI’s Iain Murray

 

Australian Prime Minister John Howard announced July 17 that he will introduce legislation this fall to set up an emissions trading scheme.  “The scheme will include maximum practical coverage of emissions sources and sinks, and of all greenhouse gases, a mixture of free allocation and auctioning of single-year dated emissions permits, a safety valve emissions fee designed to limit unanticipated costs to the economy and to business, particularly in the early years of the scheme and recognition of carbon abatement by firms in the lead-up to commencement of the scheme,” Howard said. 

 

As such, the scheme represents a culmination of all the hopes of the assorted big business rent-seekers and financial interests that are lobbying for such a scheme to be introduced in the U.S.  Yet it still did not meet with universal acclaim.  The Australian Greens condemned it as “electioneering” and said, “There are no science-driven targets, no role for Kyoto and no incentives for renewable energy. After a decade of inaction and active frustration of global efforts, Mr. Howard is delusional about Australia’s global role in forging a new treaty to tackle climate change.  This announcement is an indication that if John Howard wins government again he won’t tackle polluters, he’ll give them free permits to pollute and the cheap option of a safety-valve if they exceed their permits. This trading scheme is being designed for polluters, not for the planet.” 

 

This provides yet more evidence that the green lobby will not be satisfied with a cap-and-trade scheme in the US and will push for tighter caps, taxes and other instruments aimed at significant reductions in emissions.

 

Consumer Corner

CEI’s Julie Walsh

 

Recession. I dare to mention the word because the energy bill that the Senate has passed and that the House is now considering will push our economy into one. Our out-of-touch Congress seems hell-bent on passing this bill, irrespective of its promised effect on consumers:

 

• Gasoline prices will double, according to a study by the Heritage Foundation.

 

• New car prices will be $5,000 to $7,000 higher, according to GM in Forbes.

 

• “Food prices will rise by between 20 and 50 per cent over the next decade from average levels over the last ten years.” And Americans currently spend only ten percent of their disposable income on food. This will have to change.

 

• The recession will not only affect the U.S. but the world’s poorest. Purchasing costs for the UN’s World Food Program have risen almost 50% in the last five years and “could be forced to cut its reach unless donor countries provide extra funds.”

 

• If renewable portfolio standards (RPS) pass, consumers in the twenty-eight states without renewable portfolio standards will most likely see their power bills rise by 44% to match the cost of current electricity prices in States that now have an RPS.

 

• If renewable portfolio standards pass, many energy-intensive industries in the industrial heartland will leave the U.S for the cheaper energy overseas, increasing unemployment and the trade deficit.

 

Add the cumulative effects upon an already slowing economy and you arrive at a recession. Can it be otherwise? Evidently the Tax and Spenders have to learn the hard way that a recession can be caused from increasing regulations as easily as increasing tax burdens. In Washington, though, special interests are currently promoting their special interests over the consumers’ and capturing the rapt attention of the congressmen, while the poorest and those on fixed incomes—those most hurt in recessions—are not heard from.

 

The federal government has an office to calculate the cost to the government of proposed legislation, the Congressional Budget Office, notifying legislators of proposed bills’ costs to the government.  It also needs an office, a Consumer Budget Office if you will, to notify them of proposals’ effects upon consumers.  If there were such an office, it would be evident to all that the effects of this anti-energy bill upon consumers will be dire.

 

Issue of the week: Ethanol is a Budget Buster

 

In a previous issue, we reported how ethanol mandates raise the price of your grocery bill, harm the environment, starve the world’s poorest, and raise gasoline prices (Issue of the Week, Cooler Heads Digest, 30 May 2007). Here is a second installment.

 

As if ethanol mandates weren’t awful enough, get this: they will cost the American taxpayer almost a quarter trillion dollars over the next ten years. What is more, under the PAYGO rules by which Congress now operates, this money will have to come from somewhere, and that means higher taxes. Thus, the American consumer will be forced to pay an ethanol tax of almost 200 dollars a household, just for the privilege of paying more for groceries and gasoline. What a deal!

 

Action Item: Is the CCS Operating in Your State?

 

Last week, we highlighted the work of the John Locke Foundation’s Paul Chesser, who has been investigating the Center for Climate Strategies (CCS), a shady environmental group that works with governors in many States to implement drastic and difficult greenhouse gas emissions reduction policies out of the public’s view.

 

Last Monday on the American Spectator website, Mr. Chesser revealed that the CCS currently is working with two Republican governors, Minnesota Governor Tim Pawlenty and South Carolina Governor Mike Sanford.

 

If the CCS is trying to subvert public discussion of the costs of emissions reduction strategies in your State, let us know. State Policy Network members, including the John Locke Foundation and the South Carolina Policy Council, already have accumulated a great deal of expertise on the strategies CCS employs to sneak in its global warming agenda. If your organization is mobilizing against the CCS in your State, your peers can help. Contact the Cooler Heads Digest and together we can inform the public about the true costs of energy rationing. 

 

Call for Content

 

Have stories we may want to include in our weekly news roundup? Is your organization working on something other members of the Coalition might be interested in? Let us know by contacting Julie Walsh at [email protected]

 

Contact CEI

If you or your organization is working on energy or global warming policy, please use CEI as a resource. Contact Julie Walsh at [email protected]