Waxman-Markey Archives - Shopfloor

Consequences of Backing Waxman-Markey: Welcome Rep. Griffiths

By | Energy, General, Global Warming, Miscellaneous | No Comments

Here’s the vote that ended the Congressional career of Rep. Rick Boucher (D-VA), a 14-term House member from the southwestern corner of Virginia.

It’s the 219-212 vote by which the House passed H.R. 2454, the American Clean Energy and Security Act, aka Waxman-Markey.

Not to diminish the efforts of the winning candidate, Morgan Griffiths, the majority leader of the Virginia House of Delegates, who represents the city of Salem and portions of Roanoke County.

At The Wall Street Journal, Kim Strassel comments: “If Mr. Boucher goes down, he likely won’t be the only coal-state Democrat to get ‘BTUed’ in this election.”

Reformist Zeal, Overreach and Uncertainty

By | Energy, Global Warming, Health Care, Regulations | No Comments

Nice piece in the Pittsburgh Post-Gazette by columnist Len Boselovic on how the reformist zeal of the Obama Administration creates uncertainty and anxiety in the business community. From “Business: Rules of the game have changed“:

[There] is no doubt a host of new laws and regulations are coming that businesses will have to respond to. Uncertainty over what the new rules will look like is fueled in part by the biblical proportions of some of the proposals, including the 2,000-page plus health care reform measure.

“Who knows what’s in that law when it passes because it’s like 30 pounds and inches thick,” said Don A. Linzer of Schneider Downs, a Downtown firm that counsels clients on accounting, tax and other issues.

National Association of Manufacturers President John Engler has read enough to know he doesn’t like it.

“This bill raises costs for manufacturers at a time they can’t afford it,” the former Michigan governor said of the Senate proposal.


A Hoosier’s Perspective on Climate Legislation and Manufacturing

By | Energy, Global Warming | No Comments

Pat Kiely, president of the Indiana Manufacturers Association, makes the case in The Indianapolis Star that manufacturing helps define what it means to be a Hoosier, and that definition is put at risk by ill-considered, far-reaching climate legislation.

From “Vulnerable to high cost of restrictions“:

Developing countries such as China and India are unwilling to curb emissions of greenhouse gases. If increased energy costs drive manufacturing from Indiana to developing nations that do not restrict greenhouse gas emissions, then there is no reduction in emissions and we have done nothing to achieve the purported goal of fighting climate change. While it does appear noble that the United States would demonstrate leadership to the world in regulating itself, the downside has lasting economic hardship to the nation’s economy and to states like Indiana.

The Indiana Manufacturers Association’s membership understands the importance of environmental stewardship. That said, the method of control is critical. States have different needs based on their overall production of greenhouse gasses — be it from production of energy, agriculture, manufactured goods or transportation-related factors. It seems the federal government should work first to resolve our domestic imbalances before offering to give foreign competitors billions of dollars that we don’t have to take American jobs.

Pat also notes the NAM and ACCF’s study on the economic effects of the Waxman-Markey bill, which shows for Indiana the potential:

  • Loss of up to 59,260 jobs.
  • Residential electricity price increases of up to 60 percent.
  • Gasoline price increases per gallon of up to 26 percent.

Indeed, industrial states like Indiana would suffer disproportionate damage from Waxman-Markey and whatever climate-control scheme the Senate develops.

A Good Discussion of Energy Policy, and a Call for a ‘Reset’

By | Energy, Global Warming | No Comments

The American Petroleum Institute and Newsweek magazine sponsored a panel discussion Tuesday at the U.S. Capitol, “Climate and Energy Policy: Moving?” Moderated by Newsweek’s Howard Fineman, the forum proved a good opportunity to hear from policymakers — Sen. Byron Dorgan (D-ND), Rep. Ed Markey (D-MA), and Rep. Fred Upton (R-MI) — as well as Jack Gerard, head of the API.

The transcript of the discussion has now been posted here. We especially appreciated Jack’s calm and fact-filled presentation on the economic importance of the energy industry and the potential harm that would come from passing cap-and-trade legislation. In responding to Rep. Markey defense of Waxman-Markey, Gerard argued:

The Chairman identified his bill as market-oriented. We believe it’s anything but. In fact, that bill has already picked the winners and the losers. Unfortunately, those who consume fuels in this country like gas, diesel, et cetera, are the clear losers. We’re held accountable, responsible for 44 percent of all emissions and given 2 percent of the allowances.

Who do you think is going to bear the cost of the bill at the end of the day? And that’s why the vast majority of all economic analyses point out that we’re probably close to 2 million jobs being lost in this country as a result of the bill. We don’t believe it’s market-oriented at all.

Secondarily, consumer-focused. Same point. If you’re imposing tremendous burden on the consumers, where you’re driving their gasoline price, estimates based on EIA data, governmental data, will drive it close to $5 a gallon in the current marketplace. We believe that’s excessive and it hurts consumers.

Last point, job creator. …Every major economic analysis of the House-passed bill shows job destruction. Some are as high as multi-millions. We don’t think this bill is a job creator. We believe it’s far from it, and we believe that’s one of the key reasons why we really need to reset. Look at all the great ideas that many have, including the Chairman, and come back with a new start to get us someplace with an energy policy and a climate policy that can be integrated and work for the United States.

The one odd point about the 90-minute discussion is no one raised the issue of Climategate, that is, the documents from the Climatic Research Unit of East Anglia University that show a politicization and manipulation of research used to promote cap-and-trade legislation. Seems like an important element in a policy debate. But then, the major media have also been less than diligent in tackling the scandal.

Virginia Manufacturers Testify on Kerry-Boxer

By | Energy, Global Warming, Regulations | One Comment

The Senate Environment and Public Works Committee today held its second of three hearings on S. 1733, the Clean Energy Jobs and American Power Act, i.e., the Kerry-Boxer bill to restructure the U.S. economy through regulation, subsidy, taxation and more expensive energy.

Twenty-seven witnesses were scheduled to testify on four separate panels, which seems like too many really to pay close attention to.

Let us then highlight the testimony of Brett A. Vassey, President & CEO of the Virginia Manufacturers Association, an active member of the National Association of Manufacturers. We appreciated Vassey’s emphasis on Virginia in a global economic climate:

Federal Government Credit Allocation. This system allows elected political leaders to choose “winners and losers” in the economy. Waxman-Markey directs that every commercial user of energy would be given a certain number of carbon credits, permitting it to emit a specific amount of carbon each year. If a manufacturer exceeds its credits, it has to purchase extra credits from others who do not reach their cap. This system has too much risk for global manufacturers who are making decisions about their future capital investments today. Congress allocating credits is a critical decision because Virginia and other states will lose opportunities to compete and create jobs in the future as long as the threat of this allocation system exists in the public debate.

And …

Leakage. Proponents of “cap & trade” believe immediate regulation will force industry to stop using traditional sources of energy. Unfortunately, this position demonstrates a fundamental misunderstanding of global manufacturing today. The truth is “cap & trade” is just another tax on businesses and consumers – regressively so on manufacturing – and it does nothing to stop “leakage” to nations with more favorable conditions. For example, even if Virginia limited all of its CO2 emissions, China’s CO2 emissions growth alone would replace all of Virginia’s CO2 emissions in only 77 days. Virginia is .44% of the global GHG emissions.

See also Vassey’s Townhall column, “‘Cap’ Industrial Competitiveness and ‘Trade’ Domestic Manufacturing Jobs Abroad.

Studies and Slurs on More Government Control over Emissions

By | Energy, Global Warming, Health Care, Regulations | 3 Comments

Washington Post, “Economics of climate change in forefront,” reporting on conflicting analyses of the Kerry-Boxer bill.

Margo Thorning, chief economist at the conservative American Council for Capital Formation, criticized the June prediction for using a static economic model rather than a macroeconomic one, which would show how higher energy prices reverberate throughout the economy. She added that the assumption embedded in the EPA analysis that Boxer cited — a 150 percent increase in the number of nuclear plants by 2050 — was unrealistic.

But studies projecting large job losses are similarly based on data that have not been established. One by the American Council for Capital Formation and the National Association of Manufacturers found that up to 2.4 million jobs could be lost by 2030 in part because it assumed that only half as many carbon offsets would be available to keep energy prices lower. Another, by the Charles River Associates for the National Black Chamber of Commerce predicted a 2.2 million job loss by 2030 because of plugging in higher cost estimates for nuclear and geothermal energy projects. “There’s never a single, precise answer,” said Ken Ostrowski, a director at McKinsey and Co. who helped write the firm’s reports on the cost of cutting U.S. greenhouse gas emissions and improving energy efficiency.

“You have to deal with uncertainties like the speed at which the technology could be implemented.”

The NAM/ACCF study of the Waxman-Markey bill is here.

Analyses aside, one should also apply the test of common-sense to Kerry-Boxer/Waxman-Markey: Proponents wants to create scores of new federal government programs and regulatory regimes, including the establishment of an expansive and intrusive system of “cap and trade” to make energy more expensive. And that’s supposed to create jobs AND substantively address GLOBAL warming?

Elsewhere in the Post, columnist Dana Milbank maligns Sen. Jim Inhofe (R-OK) for challenging the scientific consensus of global warming, which too often looks like an imposed political consensus. From “A senator in a hostile climate“:

It must be very lonely being the last flat-earther.

Sen. Jim Inhofe of Oklahoma, committed climate-change denier, found himself in just such a position Tuesday morning as the Senate environment committee, on which he is the ranking Republican, took up legislation on global warming.

That’s just a slur, two slurs, in fact. “Flat-earther” is the equivalent of calling the Senator deluded and dumb. “Clime-change denier” is worse, tantamount to calling the Senator evil. Denier is the preferred term of those who want to stop informed debate of the science of global warming, an especially ugly choice of words because of its parallels to “Holocaust denier.”

The goal of this rhetoric is to delegitimize the speech involved in acknowledging the scientific and policy implications of the now decade-long temperature plateau. Or to bully into silence the increasing number of the public who doubt that global warming is man-made. These citizens, voters, taxpayers are either stupid or evil, so they better shut up.

Bad atmosphere in which to make good policy. Good atmosphere in which to make bad policy.

We find Senator Inhofe’s media webpage and especially his EPW Press Blog to be centers of intelligent policy discussions, informed by a healthy skepticism of analyses, claims and wild promises. Too bad some in the media prefer slurs to skepticism and squelching to speech.

Senator Thune: Global Warming Bill Dead, but EPA Rolls On

By | Briefly Legal, Energy, Global Warming | No Comments

Senator John Thune (R-SD) spoke to the National Association of Manufacturers’ board of directors at the JW Marriott today, covering health care, Waxman-Markey and the Employee Free Choice. This was the first time we had heard him on the potential for EPA regulation of stationary sources of C02 emissions, and since he’s a member of Senate Republican leadership, we regard his remarks as representative of the minority party’s position.

Cap-and-dead is legislatively dead, at least right now, and the Senate shows no signs of taking the issue up anytime soon, Sen. Thune said. He continued:

In the meantime, the EPA is moving forward with regulating C02 under the Clean Air Act, and that’s equally frightening, because they are going to essentially codify through regulation the Waxman-Markey bill that passed the House.

So the emission thresholds that were adopted by the House of Representatives in their cap-and-tax bill are going to be through regulation implemented by the EPA. That should be of great concern for everyone.

We doing everything we can, congressionally right now, to try to stop them from doing that. Furthermore, if Congress wanted to, it could basically say that they don’t have the authority – which they don’t – to regulate carbon emissions under the Clean Air Act.

But they’re going to move forward, and they will get sued, and when they do get sued, it will become much worse because the only portal that they have in the Clean Air Act to tie it to is the 250 ton threshold, which I think would capture about a million businesses in the country, about a million stationary sources. So, what we’re looking at, with the EPA moving forward on this, are potential dramatic increases in energy costs, which I don’t think anyone in this room wants.

As we’ve noted before, the EPA wants to use its questionable Clean Air Act authority to regulate stationary sources, but only those emitting 250,000 tons or more of greenhouse gases. But that’s not what the Clean Air Act says, as Thune points out.

It continues to amaze us that any member of the federal legislative branch would support such an gross intrusion from the executive branch into the policymaking function of government.

Waxman-Markey: Let’s At Least Be Straight About the Jobs

By | Economy, Energy, Global Warming, Regulations | One Comment

The Economist’s U.S. correspondent, who writes under the nom de plume of “Lexington,” is exasperated about the lack of straight talk from Congressional advocates for government limits on greenhouse gas emissions. Lexington believes in taking action, with the most straightforward way being a carbon tax. But, since the public regards taxes as bad, politicians “waffle and obfuscate” on energy policy.

From “The myth of green jobs“:

John Kerry, who is neither stupid nor ignorant, claims not to know what “cap and trade” means

And Barbara Boxer, asked what the government should do to create jobs, said we should pass an energy bill, ie, the cap and trade bill that dare not speak its name. This, she said, would “allow this economy to take off“.

For heaven’s sake. The point of putting a cap or a tax on carbon emissions is to curb carbon emissions, thereby saving the planet from cooking. It is not about creating jobs. It will certainly create some, but it will destroy plenty, too.

Both presidential candidates last year vigorously promoted the notion that halting climate change will not merely be painless but will actually provide a huge boost to the economy. Kevin Hassett explains why this is nonsense

If politicians insist on pretending that everything is a free lunch, they should not be surprised if a) many voters don’t believe them and b) the rest get angry when the bill arrives. 

The Senate bill sets a target of reducing C02 emissions by 20 percent from 2005 levels by 2020. The House bill set a target of a 17. The NAM and the American Council for Capital Formation analyzed the House bill, Waxman-Markey, and found the legislation would result in up to 2.4 million lost jobs, higher energy prices for businesses and consumers, and cumulative GDP losses of up to 3.1 trillion dollars over an 18-year period.

Yeah, for heaven’s sake.

Senate May Attempt to Restructure Economy Only Once in 2009

By | Energy, Global Warming | No Comments

Senate Majority Leader Harry Reid on Tuesday downplayed the prospects for Senate action on cap-and-trade climate legislation this year. From The New York Times, “2010? Reid’s Comments Add Uncertainty to Climate Vote’s Timing “:

Reid had suggested that the global warming legislation could be tossed to the sidelines because of a packed legislative agenda that includes equally bruising battles over health care and Wall Street reform.

“So, you know, we are going to have a busy, busy time the rest of this year,” Reid said. “And, of course, nothing terminates at the end of this year. We still have next year to complete things if we have to.”

The odds of Congress acting on what amounts to a major new tax on energy seems unlikely during an election year. The Times also quotes Sen. Byron Dorgan (D-ND), a member of the Democratic leadership, who is up for re-election in 2010 in North Dakota, an energy-producing state: “I think its increasingly difficult to have a climate change bill done before the end of the year.” (Reid is also up for election.)

Maybe this will swing the debate: “Sweden Urges US Senate To Pass Climate Bill“:

STOCKHOLM — Sweden’s environment minister urged the U.S. Senate on Monday to pass legislation to control greenhouse gases, saying a delay in the vote is impeding negotiations on a new international climate treaty.

Minister Andreas Carlgren said America’s complex debate over health care reforms is sidelining its vote on a climate bill that is needed to persuade other nations — especially the fast-growing economies of India and China — to commit to lowering their greenhouse gas emissions at the Copenhagen climate summit in December.

“It is crucial that the Americans deliver a reliable emission pathway,” Carlgren said, referring to a plan for how emissions will be cut to stated targets. “But that is dependent on the Senate’s lawmaking.”

Only by acting to raise the costs of energy and destroy jobs can the United States demonstrate its seriousness in Copenhagen, or so goes the argument. Is it proportional? The more jobs we destroy, the more serious we are?

A Labor Day Message: Anti-Energy Bill Would Kill Jobs

By | Energy, Global Warming, Taxation | No Comments

The Philadelphia Inquirer today publishes a column by Jay Timmons, executive vice president of the National Association of Manufacturers, and David N. Taylor, executive director of the Pennsylvania Manufacturers’ Association, “Millions of jobs would vanish with energy bill“:

This Labor Day, America is in its 20th month of recession, making this the longest and deepest economic downturn since the Great Depression. More than six million jobs have been lost across the country, and manufacturing has suffered disproportionately, accounting for 1.8 million of those lost jobs.

So it’s difficult to understand how our federal lawmakers could seriously consider legislation that would depress economic growth and job creation for the next 20 years. But that’s what we can expect from the far-reaching climate-change legislation headed for a vote in the Senate when Congress returns from its summer recess.