FreedomTalks

Brian Buetler reports on a Senate hearing about Lieberman-Warner climate bill:

Perhaps the most interesting question of the day came from Lieberman. He asked Beinecke and Kevin Anton, president of Alcoa Materials Management — both founding members of the United States Climate Action Partnership — what features of the bill they regarded as essential. What, he asked, would cause you to revoke your support?

For Anton, the clincher was a provision that rewards early adopters — companies that have already acted to cut emissions — with a better package of entitlements than other companies can expect. Beinecke suggested that if the emissions caps were loosened, it would be a deal breaker. Those features of the bill do seem to be secure. The caps may become more stringent, and the early adopters might benefit more, but neither provision looks likely to be weakened.

This is one of those times where it’s tough to decide if something is hilarious or infuriating. Of course these guys would focus on making sure early adopters get the biggest boost. All they care about is gaming the legislation so that it gives a short term benefit to big incumbents (like all the members of U.S. CAP) and creates barriers to entry for competitors. This has nothing to do with environmental stewardship and everything to do with cynically working the political system. As our chairman, Dick Armey, put it recently, “business groups are simply not ideological givers. They give to buy access and to minimize risk.”

What’s more, as Tom Borelli pointed out in Senate testimony earlier this year, businesses get involved with organizations like U.S. CAP at the expense of their shareholders — and often without providing sufficient warning. Businesses are required to note risk involved with their actions and affiliations, but few are willing to publicly state the risks — especially to business — of advocating cap and trade. Here are just a few that Borelli listed (and it should be noted that he pulled these numbers from agencies overseen by the Clinton administration):

• Raise gasoline prices by nearly 53 percent
• Raise energy prices by more than 86 percent
• Reduce economic growth by 1.9 percent, which is $256 billion of 2006 GDP
• Reduce economic activity across most industries including the construction,
  manufacturing, transportation and finance industries
• Raise interest rates because higher energy will exert upward pressure on
  overall prices and contribute to inflation

So whether you’re an environmentalist or a free-marketer, trusting these companies on legislation is just a terrible idea. They’ve convinced themselves (somewhat plausibly, I think) that there’s short term gain to be had from getting favorable legislation drafted, and they’ve put their entire focus on that aspect — their own quick gains — rather than on the actual environmental effects of the legislation. At the same time, they’re refusing to recognize the possibility of long-term consequences involved with energy caps and government intervention in the marketplace. Yet somehow or another, these guys get portrayed on a regular basis as some sort of big-business heroes. They’re not, and this sort of Big Business For Big Government advocacy shouldn’t be accepted by anyone.

This entry was posted on Thursday, October 25th, 2007 at 11:58 am and is filed under Energy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.