Cooler Heads Digest

Cooler Heads Digest

February 13, 2008

News Highlights

Schwarzenegger’s Climate Team Further Implodes
Editorial, 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 Warming
Robin McKie, The Observer, 22 July 2007

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

Inconvenient Truth’s Carbon Footprint
Steven 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 Today
Myron Ebell, Human Events, 25 July 2007

Enviros Challenge Coal Energy in Texas
AP, 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 jwalsh@cei.org.

 

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:

  • 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.