John Kerry's Big Business Buyoff
When Senator John Kerry lent his name to a climate bill last fall, he probably didn't expect it to sink so fast. Opponents successfully branded "cap-and-trade" as a "cap-and-tax," and Kerry's co-sponsor, Barbara Boxer, proved singularly inept at pushing the bill though the Environment and Public Works Committee that she chairs. The bill never even made it to a full Senate vote.
So Kerry retrenched. He dropped Boxer as a partner, remessaged cap-and-trade as an economic opportunity, and went looking for bipartisan -- or at least less doctrinaire -- cover. You'll find no arguments from us about the wisdom of dropping Barbara Boxer, but the rebranding effort is fraudulent. Kerry recently unveiled another climate bill, the American Power Act, and the doublespeak this time is truly impressive. Instead of a "cap-and-trade," the bill has a "global warming pollution reduction scheme"; out with the "gas tax," in with a "linked fee" for transportation fuels. Yet the words don't obscure the plain fact that the act would raise the price of energy.
To help sell the act, Kerry has lined up several industrial strength energy suppliers and users. Their support forms the basis of Kerry's claim that the American Power Act is good for the economy. But why do big businesses support a bill that will increase the costs of doing business in this country? Kerry and his new Barbara Boxer, Senator Joseph Lieberman, would have you believe that these companies are motivated by the need for "regulatory certainty." The truth is simpler and cruder than that. These businesses stand to make a killing if the bill passes. Consider:
* General Electric helped write portions of the bill to tilt the market in its favor. If Congress puts a price on carbon, coal will lose market share to nuclear power and natural gas. GE is a global leader in these two industries. This is par for the course for GE. In 2007, it spent millions lobbying for an energy bill that bans incandescent light bulbs. The company just happens to be a world leader in the production of compact fluorescent bulbs.
* Goldman Sachs, Morgan Stanley, and other Wall Street firms long have lobbied for climate legislation because they would reap huge fees in brokering the trade of energy-rationing coupons (a.k.a. carbon credits) under a cap-and-trade scheme. By 2020, the global carbon market could be worth $3 trillion, according to London-based New Energy Finance.
* Exelon, America's most valuable utility, is such a staunch supporter of climate legislation that it split from the U.S. Chamber of Commerce over the Chamber's opposition to cap-and-trade. Exelon relies on nuclear power, and the American Power Act fulfills every aspect of the nuclear industry's wish-list. The Huffington Post unearthed an internal Exelon memo estimating that climate legislation would add $700 to $750 million to the company's annual revenues for every $10 per metric ton increase in the price of CO2 allowances.
* British Petroleum and Conoco Phillips opposed cap-and-trade legislation enacted by the House of Representatives because they thought it was insufficiently generous. In the Senate, they got a better deal. Senator Kerry said that he's "been working very closely" with BP and C-P, and the lobbying has paid dividends. The refining industry receives twice as many free carbon credits under Kerry's cap-and-trade scheme as the one established by the House. C-P CEO Jim Mulva even bragged in a statement that his company "is pleased with the attention that has been given our key issues."
* Chemical manufacturer Dupont, for business reasons, phased out the use of HFC-23, a chemical gas that happens to be thousands of times more potent a greenhouse gas than carbon dioxide. The American Power Act allocates 1 percent of the carbon credits from 2013-2015 to companies that performed "early action" policies to mitigate climate change. The company could reap hundreds of millions of dollars, just for doing business as usual.
This is just a sampling of a larger group of businesses whose woolly rhetoric is designed to mask their own-self interest -- at the expense of the American economy as a whole. Big business spokesmen for cap-and-trade claim they are trying to save the planet and achieve regulatory certainty. But the only certainty they're after is guaranteed profits. It's comforting, in a way, to know that their eyes are always firmly fixed on the bottom line.