Coal, Electric Industries Big Winners in Climate Bill Deal
Friday, May 15, 2009 at 1:29 pm
Even as House Democrats are celebrating their deal with conservative-leaning colleagues on climate change legislation, the real winners under the compromise have been the coal, electric and auto industries, who are largely the source of the nation’s carbon emissions to begin with.
Details of the compromise are still emerging, but already the chief sponsors of the measure — Reps. Henry Waxman (D-Calif.) and Edward Markey (D-Mass.) — have been forced to lower carbon-reduction targets, cut renewable fuel standards and dole out billions of dollars in benefits to the nation’s largest polluting industries. Many environmentalists say the compromise comes at the too-high cost of undermining the bill’s very purpose, which is to slash emissions dramatically enough to prevent a warming planet from heating further. Some are asking Democrats either to bolster the environmental protections or to scrap the proposal altogether.
“We are not prepared to ‘give away the farm’ just so that we can say that we helped to get legislation passed,” Janet Keating, executive director of the West Virginia-based Ohio Valley Environmental Coalition, said in a statement Friday. “There are some costs that are too high to pay when it comes to the environment, clean air and clean water. We urge Congress to either fix the Waxman-Markey bill or dump it and start over.”
The saga highlights the thorny congressional climate change debate, where partisan politics takes a backseat to regional interests, and the influence of the energy lobby is king. Indeed, the concessions from Waxman and Markey to this point have been made to satisfy Democrats representing regions heavy with coal, oil and automaker interests.
The resulting dynamic is one of multi-layered tension that pits industry against environmentalists, regional interests against national and global interests, and congressional lawmakers against emission reforms that might help the planet, but could also cost jobs in their districts.
“I’m just trying to take care of the principal concerns that would impact my region, in particular my district,” Rep. Charles Gonzales, a Houston-based Democrat who’s pushing for more benefits for oil refineries in the House bill, told Politico Thursday.
In the eyes of many environmentalists, that brand of regional protectionism might yield short-term gains for some areas of the country, but will come at the cost of a deteriorating globe. They’re asking what good is it to protect polluters in a world where you can’t drink the water or breath the air, and the oceans are swallowing the coasts?
Erich Pica, director of domestic policy programs at Friends of the Earth, said the moderate Democrats are “holding hostage” the reforms necessary to tackle the problem in a way that reflects its urgency. “They have every right to protect their constituents,” Pica said. “But as members of Congress they also represent the entire country, and they should know when to sacrifice their regional interests for the sake of the larger common good. All they see is protecting oil or protecting coal. That’s not helpful.”
Indeed, the United Nations issued a report Thursday indicating that the world’s poorest countries, which are expected to suffer the brunt of the floods, draughts and storms associated with climate change, already require as much as $2 billion to adjust to the warming conditions. The UN is asking for donors to raise the funds.
Faced with similar reports, Waxman and Markey introduced a draft climate change bill in March — diluted significantly in the more recent compromise. And from an industry perspective, there’s something in there for nearly everyone.
For the coal and electric utility industries, for example, the compromise bill requires that U.S. emissions be reduced 17 percent by 2020, down from the 20 percent reduction promoted in the initial draft. The new bill also tamps down an earlier provision that states get at least 25 percent of their electricity from renewable sources by 2025, instead dropping that floor to 15 percent.
Additionally, although President Barack Obama had campaigned on a platform of selling 100 percent of so-called pollution permits to industry — a strategy he said would generate $646 billion to fight global warming over the next decade — the House compromise gives all but 15 percent of those permits away for free.
The changes were enough to gather the support of several key members of the House Energy and Commerce Committee, including Rep. Rick Boucher (Va.), a coal-country Democrat who had threatened to oppose the stronger draft. But the bows to industry also bring into question whether lawmakers resigned to shield their provincial industries are even capable of passing the reforms scientists say would be required to stem America’s contributions to the warming planet.
The changes, said Tyson Slocum, director of the energy and climate program at Public Citizen, “threaten to render this bill ineffective for a long period of time.”
There were other concessions as well. To satisfy Rep. John Dingell (D-Mich.), another powerful member of the committee, Waxman and Markey have agreed to give 3 percent of pollution permits to the nation’s automakers to fund research for more fuel efficient vehicles.
The compromise also waters down the so-called cash-for-clunkers program*, which ostensibly encourages drivers to turn in their gas guzzlers in exchange for a federal subsidy on more fuel efficient models. Yet under the compromise proposal, the new fuel efficiencies are hardly dramatic. For example, drivers trading in trucks between 6,000 and 8,500 pounds would be eligible for a $3,500 voucher for purchasing the same-sized vehicle that’s more efficient by just 1 mile per gallon.
Daniel Becker, director of the Safe Climate Campaign, said the program does much more to help struggling automakers sell large, unpopular models than it does to reduce greenhouse emissions.
“It’s a $4 billion giveaway to move gas guzzling vehicles that nobody wants off the lots,” Becker said.
Also, to get oil-friendly Democrats like Gonzales on board, the House compromise will give 2 percent of the pollution permits to oil refineries.
And these changes have arrived before the amendment process begins. House Republicans have vowed to dilute the environmental protections even further during debate in the Energy and Commerce Committee or on the House floor. Indeed, Sen. Joe Barton (Tex.), the senior Republican on E&C, has predicted that Republicans will succeed in altering the bill to consider nuclear energy and so-called “clean coal” renewable fuels.
“The president and his allies have decided that man-made carbon dioxide is a witch’s brew that’s killing the planet,” Barton said in a statement, “and they think that just because the cap-and-trade cure stings doesn’t mean we shouldn’t have to swallow it.”
The Energy and Commerce Committee, headed by Waxman, is expected to take up the bill next week, with House Democratic leaders hoping to pass the bill before the August recess.
Influencing the debate, the nation’s largest carbon emitters have contributed enormous sums of money to lobby Congress this year. The oil and gas industries, for example, have already spent $44.6 million and the electric utilities have tallied an additional $34.4 million, according to the Center for Responsive Politics. By contrast, the renewable energy sector has spent only $14.4 million on lobbying over the same span, and environmental groups have tallied just $4.7 million.
It’s not just Waxman and Markey who are struggling against the current of regional protectionism in the fight against climate change. The Environmental Protection Agency last week proposed new renewable fuel standards that, for the first time, would factor things like worldwide deforestation when calculating the environment impacts of biofuel production. The proposal was hailed by environmentalsist who have long argued that production of ethanol, for example, has depleted global food supplies, forcing farmers elsewhere to clear forests — a major source of carbon emissions — to make up the difference.
Yet, after eight years of Bush-era regulators who didn’t believe in regulation and environmental protection officials who didn’t believe in environmental protection, congressional lawmakers on both sides of the aisle are suddenly feeling the sting of an EPA living up to its name.
Indeed, since the EPA unveiled its proposal, Sen. Charles Grassley (R-Iowa) has blasted the proposal as “very detrimental to ethanol.” Sen. John Thune (R-S.D.) charged that the changes “would effectively kill renewable fuels in South Dakota and across the country because of environmental extremism within the EPA.” And Rep. Collin Peterson (D-Minn.), who heads the House Agriculture Committee, has already introduced legislation to prevent the so-called “indirect land use” provision from ever taking hold.
The message is clear: If climate change reforms are ever to clear Congress, they can’t confront industry too severely — even if those industries are responsible for same carbon emissions creating the problem.
Some lawmakers appear to recognize that probable reality. Next week the Senate environmental panel will host a hearing entitled “Business Opportunities and Climate Policy.”
*Cash for clunkers was not in the original proposal, but attached during committee debate a few days later.
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