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Rationalizing Rationing

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Rationalizing Rationing

Apple Inc. may have drunk the Kool-Aid, but most of the companies feuding with the U.S. Chamber of Commerce over climate policy are energy-rationing profiteers ("Backers of climate bill quit chamber," Page 1, Tuesday).

Nike Inc., for example, manufactures sports shoes in factories in developing Asian countries. Unlike most businesses represented by the chamber, Nike would not face higher energy costs from either the Waxman-Markey bill (American Clean Energy and Security Act of 2009) or regulation by the Environmental Protection Agency of carbon dioxide under the Clean Air Act. What's more, if the successor treaty to the Kyoto Protocol continues to exempt developing countries from binding emissions limits, the comparative advantage (lower energy costs) that developing countries already enjoy under Kyoto will increase, sharpening Nike's competitive edge.

Or consider Exelon Corp., the nation's largest nuclear power generator. The Waxman-Markey bill would lavish millions more tons' worth of energy-ration coupons on Exelon than the company would need to cover the CO2 emissions from its much smaller fleet of fossil electric generating units. As Amanda DeBard indicates, under Waxman-Markey, Exelon would reap about $1 billion in windfall profits annually from the sale of surplus ration coupons.

Exelon and its ilk put their special interest in short-term gains from market-rigging rules ahead of the business community's long-term general interest in limited government, economic growth and affordable energy.