Friday, May 2, 2008

Cap-and-Trade: And That's How a Bill Becomes a Law

Reading Maril Hazlett's live-blogging on the Kansas coal-fired power plant debate last night I was struck by how true my comment of yesterday was*:
...Very, very sharp and a good writer (not your typical PhD. prose, eh?). Yesterday's post is worth a read even if you don't care about Kansas or coal. It's a very entertaining civics lesson....
*(he said modestly)
Here's a part of today's live-blog:

...10:15 Gavel crack! Here we go.

First, they recognize a successful grade school, meeting and exceeding No Child Left Behind standards while eduacting kids in one of the poorest areas of Kansas. Then a resolution to recognize a U.S. Army Kansas veteran, Sgt. Bryant Mackie, for his death in Iraq, and the family he left behind - children, wife, father who was a Vietnam Vet, huge extended family. The House offers their deepest sympathies.

Now - recognition of the Kansas Jayhawks. I just got to do the Rock Chalk chant in the statehouse, I do not believe it.

So we all acted like groupies for a giddy ten minutes. Now, back to coal.

10:33 You’re all aware, right, that in fact today will probably drag on ad nauseum and who knows if or when they will actually get (back) to coal. So, take a break.

FYI, there are no energy lobbyists in the gallery right now.

The last line got me thinking about a part of that pesky old Amendment I to the U.S. Constitution:

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.

I know it's the darn First Amendment but sometimes the lobbyists just rub me the wrong way.

Here's a post from the WSJ's Environmental Capital blog along with a few of the comments:

Dollars in Details: Climate Bill Boon To Some Utilities, Bust To Others

...A new study released today by Ceres, a shareholder coalition pushing companies to curb their global-warming emissions, and the National Resources Defense Council, an environmental group that wants the same thing, breaks down the impact of two leading bills on the U.S. power sector, which accounts for 40% of the country’s emissions of carbon dioxide....

...But one crucial question is how to divvy up the permits. Both bills currently propose doling out emissions permits based on how much carbon dioxide each company has emitted in the past. That means utilities that burn a lot of coal, and have a lot of emissions, would get more permits than, say, nuclear power utilities....

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Pretty slick!
NRDC and Pg&E are both members of the U.S. Climate Action Partnership.

A quick look at the numbers shows that USCAP’s six utility members come out $548 Million per year better under the new proposal. Throw in another of the report’s underwriters, PSEG, and the seven of ‘em have an extra $624 Mil.
That’s using the report’s $10/tonne pric.
Use a more realistic price, today’s EUA price, $36.27/Tonne and the USCAP 6+PSEG make out better by $2,263,000,000.
Per year.
I guess membership really does have its privileges.

Comment by Climateer - May 1, 2008 at 6:21 pm

Well put it this way lad/climateer.
In Iraq+Afghanistan we spend about $3 billion dollars a WEEK.
Certainly does good to put things into perspective.

Comment by David Ahlport - May 2, 2008 at 7:48 am

Anyways, the real question at hand.
Which is more important.
Efficiency, or getting existing business lobby’s to buy into it by paying them off.
Or should the focus be getting the existing lobby to buy in, without creating an adverse path of least resistance.

Comment by David Ahlport - May 2, 2008 at 8:06 am

Mr. Ahlport,
The point of my instanalysis was the rentseeking squared of the USCAP members. Not only does their manifesto call for free allocation of the permits (your “buy-in”) but now they’ve developed a methodology to transfer more of the property rights created by the various bills to their members.
The report also has refs to the “credit for early action” gaming of the system, which, you remember, first raised its head back in the nineties.
Another attempt to game the system is to use 1990 as the baseline.
These boys are gunning for a Trillion dollar pie and they aren’t playing pattycake.
I’ve read every word of Lieberman-Warner and could probably, if pressed, identify the lobbyist who got which article included.
The entire point of Mr. Johnson’s post was “who wins, who loses”.
I figured I’d add some specifics.
This EC post reflects a level of sophistication beyond the simple buy-in stuff.
MIT grad school vs. third grade.

Comment by Climateer - May 2, 2008 at 12:13 pm