Here are some snapshots of some of the latest developments regarding the Congressional debate over cap and trade legislation. For the first time serious consideration of legislation is underway. As a result, groups are beginning to develop their public positions. Meanwhile, businesses continue to feel increasing pressure to address the risks associated with climate change.
Congressional Battle Lines Are Forming– In my last post I apparently underestimated the aggressiveness of the Conservative attack on the Cap and Trade Proposal. The legislative battle is beginning to take shape. RNC Chairman Steele said the following on a call in talk show:
We are cooling. We are not warming. The warming you see out there, the supposed warming, and I am using my finger quotation marks here, is part of the cooling process. Greenland, which is now covered in ice, it was once called Greenland for a reason, right? Iceland, which is now green.
Skepticism among "Blue Dog" Democrats: As serious consideration of a cap and trade bill is now underway, conservative Democrats are questioning the timing and implementation of a cap and trade proposal. In a Wall Street Journal interview with U.S. Climate Action Partnership member, Fred Krupp, he minimized the concern a divide is occurring within the Democratic Party:
Recently I met with 27 House Blue Dog Democrats, alongside other members of USCAP including [GE boss] Jeffrey Immelt, [Shell’s] Marvin Odum, and [Duke Energy’s] James Rogers. What I heard is that they want to be involved in getting a climate bill right, and making it fair for consumers; I didn’t see a lack of engagement. Until now, there’d been no prospect of legislation. Now, the sorts of concerns are raised that naturally get raised when things could actually happen. This is part of the legislative dance, and that just began in earnest when President Obama called on Congress to deliver a climate bill.
Size of the Climate Bill May 2 or 3 Times Projected in the President’s Budget- Jason Furman, deputy director of the National Economic Council, told Senate staffers in late February that the plan could raise two to three times as much as the official budget figures, or between $1.3 trillion and $1.9 trillion, the WSJ reports.
[In order to get projections that high] That leaves carbon-emissions permits that are simply more expensive than the lowish prices that have been bandied about so far. To make the White House math work, the government would have to sell the same number of permits at prices ranging from $20 to more than $40 a ton [compared to $10 to $14 per ton originally projected. For comparison the most recent RGGI auction, carbon was around $3 per ton]
Cap and Trade Means Jobs– Understanding the link between a struggling economy and the viability of cap and trade legislation, the Environmental Defense Fund has launched a new web site showing regulating carbon can translate into green jobs. The site contains maps of select states with push pins representing various companies that EDF argues would benefit from cap and trade legislation. It is no coincidence that EDF uses mainly coal states to highlight the potential for green job growth. www. lesscarbonmorejobs.org
Insurers Must Disclose Climate Change Risks- Another indication came last week that climate change is having real world impacts on the business community even before a vote occurs on cap and trade legislation. The National Association of Insurance Commissioners (NAIC) voted last week to require the annual filing of Insurer Climate Risk Disclosure Surveys for insurance companies with annual premiums topping $500 million. The new rule, set to begin May 1, 2010, is the world’s first climate risk disclosure requirement,
Market Solutions Versus Top Down Regulation- The freight train that is greenhouse gas (GHG) regulation is on track and moving full steam ahead. I cannot repeat enough to those debating climate change legislation, if you are focusing only on whether to enact cap and trade legislation you are missing the 800 lbs gorilla in the room. GHG regulation is coming. The Supreme Court set the train in motion with Massachusetts v. EPA. No real debate should occur without examining the alternative of allowing Clean Air Act regulation of GHGs instead of a market based solution like cap and trade.