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Archives For Waxman Markey
I came across a great article on the energy blog Master Resource (of which I have become a regular reader) by Robert Peltier that focuses on some of the intricacies that may result from an eventual passage of H.R. 2454. Peltier notes on how remarks of opposition from the energy industry have been few and far between so far in the discussion of Waxman-Markey and that perhaps, for some, their end of the deal is not quite that bad. One could think the large energy providers will need to shoulder a great deal of burden towards reducing our carbon footprint, but the key of how newly distributed carbon allowances actually get doled out brings a great deal to bear on how how utilities will be affected. The give and take of Capitol Hill negotiating may have left some hands far from empty. Three of Peltier’s seven points include:
- Given that existing plants will be given new allowances for free, new plants face a considerable barrier to entry in the marketplace having to purchase new allowances in order to gain a permit to build. Existing owners and operators could cement their place on the high ground for years to come.
- Nuclear providers could end up with amazing benefit given that allowances are doled out in response to the percentage of national generation. Since nuclear provides nearly 20% of our nation’s power they could wind up with 20% of the carbon allowances that are unneeded and could be resold. As Peltier puts it, “For utilities with a lot of nuclear generation, these allowances are a gift.”
- Original distributions of allowances to older coal plants could encourage them to remain open given that the allowances could be worth more than the plants themselves. As long as a utility provider can keep the plant open (and continue to be spewing carbon) long enough for allowances to be doled out, they will be handed a nice, tax-payer sponsored retirement plan.
I encourage the reading of the entire article.
Even staunch environmentalists like Joe Romm consider this a flawed bill and it is wrought with concessions and exceptions that help make its passage plausible, but in the end it may be worth it. Though large nuclear owners do not need any extra money, rewarding their low-carbon model is not exactly counter-productive (besides the fact that they produce some of the most hazardous material known to mankind.) If entry into the energy market for high carbon producers is more expensive, that seems fine as well. We should be discouraging carbon-intensive models for power. Giving allowances to coal plants on the verge of decommissioning is a more difficult one to swallow given that coal is already responsible for pollution in the country that has either been suffered or needs to be repaired. The notion of buying out the problem leaves a bitter taste in my mouth, but how much can we expect from American legislators.
Peltier does a great job in giving an overview of the issue. Being an advocate for sustainability reform is one thing, but being an educated advocate raises the likelihood of making notable progress. Though some of the contributors and frequent readers of Master Resource may not share my position of the severity of a more sustainable economy, their knowledge of the energy markets is thorough and often provide much-needed points to ground the aspirations of new technologies and bold, but sometimes half-baked, claims.
The conservative lobby struggling to derail the American Clean Energy and Security Act has recently been accumulating roadblocks to their progress. The bill, which now remains on the floor of the Senate, passed in the House by a slim margin and stands as the most aggressive piece of climate legislation in the country’s history. Opponents to the bill have argued that the goal of regulating carbon–either through a carbon tax or a cap-and-trade system–would place an undo stress on the economy, adding thousands of dollars to utility bills. Naysayers also claim that there is a large portion of dissenting public vote for the bill. As it seems now, those two lines of critique are waning.
A new report by the Energy Information Administration (EIA) has determined that the bill would indeed raise costs of electricity and gasoline in the country, but the change would be minimal. The estimated increase for the cost of power over the next 11 years was between 3 to 4 percent, far below the claims of middle class power bills being thrust into the stratosphere. Gas prices are estimates to rise 23 cents (only due to the bill, not fluctuations in oil prices) and given that we pay less for gas than most of the world, the addition is negligible. The EIA becomes the third administration after the Environmental Protection Agency and the Congressional Budget Office to affirm the low public cost of this bill which seeks to lower emissions 17% by 2020 and nearly 80% by 2050 from 2005 levels.
The other gut shot that sank into opponents of Waxman-Markey was the uncovering of forged letters written to congressmen to urge them not to vote for the bill in the House. With the guise of minority, public interest groups, the letters took on the form of copied letterheads and phantom signatures to stir opposition for the bill. Kate Galbraith notes that apparently the letters originated from D.C. lobby consulting firm Bonner and Associates who was in turn working for another firm called the Hawthorn Group. The kicker comes from the final client, the American Coalition for Clean Coal Electricity, and suddenly the whole thing makes all too much sense. Of course, blame is claimed by no one, but placed on the lone acts of a purported temporary employee at Bonner who has since been released from duty. Regardless of whose fault it actually is, at worst the event was blatantly dishonest and crippling to the credibility of the lobby. At best, it is an embarrassing scar on the face of the camp.
In this case, I think the damage actually goes beyond the factual events. If the contra-lobby to environmental legislation finds itself in need of lying and fabricating faulty evidence then it must mean that they are short on real reasons for why climate legislation is not a good idea (not that this is altogether surprising.) For those trying to find their way to an opinion about the Climate Bill, think about the danger of a position that needs to use more than the truth to win your vote, and is willing to do it.
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