Break Through on Cap and Trade

There's been a major break through on cap and trade.

They still call it the Waxman-Markey climate-energy bill — but it’s Nancy’s bill now.

By saying she would pass the massive — and massively controversial — cap-and-trade bill by the start of the July 4 recess, the House speaker took a big gamble, setting herself up for a daring political victory or the biggest defeat of her six months as President Barack Obama’s legislative ramrod.

And on Monday, Pelosi doubled down, scheduling a Friday vote on the legislation, overriding the objections of farm staters and moderates who fear the vote could explode into a potentially lethal election issue next year as Republicans cast it as a one huge tax hike.

Tuesday evening, the bet seemed to be paying off. After weeks of negotiations, House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.) announced he had struck a deal with Agriculture Committee Chairman Collin Peterson (D-Minn.), who led a push for greater protections for farmers and rural interests.

Now, earlier I said this about cap and trade.

Cap and trade always had a dubious chance of passing. It's not something that just about any Republican would ever support. It would also not enjoy support of any legislator in any state or district that relied on any form of energy that would be adversely affected by its imposition. As such coal states, agriculture states, and any state that relies on oil, would be furtive ground for opposition to the legislation. So far, it passed through the Energy and Commerce Committee in the House.

At first glance, this latest development would seem to prove me wrong, but in fact, it only points out the problem I have already talked about. The concessions given to Collin Peterson, a very powerful Chairman of the Agriculture Committee, mean that farming will be all but exempt from cap and trade. Already, 85% the permits that will be used by companies that go over their emissions caps will simply be given to them.

This past week, Rep. Henry Waxman's House Energy and Commerce Committee passed a climate-change bill that gives away 85% of the emission permits until 2026.
President Obama applauded, calling the bill "a historic leap."

Huh?

The point of climate-change legislation is to raise the price of activities that emit carbon so consumers and businesses engage in fewer of them, and favor alternatives that contribute less to climate change. Taxing carbon is one way to do that, but it's unpopular.

As such, this bill is already mostly nonsense. Now, the farming interests have gotten major concessions. The bill still hasn't passed the House. If it does, it will go through a much more difficult process in the Senate. How many more interests will get a hold of it and ask for exemptions?

In fact, Fox News is now characterizing the bill as a cap on carbons at power plants, factories and automobiles.

Key Democrats reached a deal Tuesday that its supporters hope will lead to House passage of the biggest environmental bill in decades. The bill would impose nationwide limits on carbon gases emitted from power plants, factories and automobiles.

That's because other interests, like farming, have been able to get exemptions. Even here, the automakers have also been able to carve their own exception.

U.S. Rep. John Dingell, D-Dearborn, signed on after the auto industry was promised 3 percent of the federal government's revenue from emissions permits for five years, which would be worth billions of dollars. The revenue is linked to investments in new vehicle technology. The industry has also been promised up to $50 billion in new technology loans.

As this continues through the legislative process, it will get watered down even further. This will happen until anything that passes will be mostly inconsequential.