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cap and trade

Cap and trade would cut the federal deficit

Surely this means all those “deficit hawks” I keep hearing about will rush to embrace the American Power Act now. Right?

The CBO analysis of the American Power Act, championed by Sens. John Kerry (D-Mass.) and Joe Lieberman (I-Conn.) found that government revenues would grow by about $751 billion from 2011 to 2020 if the bill became law. By contrast, the legislation would create direct spending of $732 billion over the same 10-year period.

Authors of the proposal called the CBO report a “powerful message” ahead of a floor debate next month. They are still searching for a formulation that will draw 60 votes.

“There is no more room for excuses; this must be our year to pass comprehensive climate and energy legislation and begin to send a price signal on carbon,” Kerry and Lieberman said in a joint statement. “Many of our colleagues have said they flatly oppose anything that adds a penny to the deficit, so we hope they look anew at this initiative, which reduces it.”

The CBO report is here. Of course, no one actually believes the American Power Act can pass, because we can’t afford it or some such, so the talk is about various alternate approaches that may have a chance of surviving the Senate. No, I don’t understand that either. Texas Vox has more.

The Valero effect

This is just what all of our cash-strapped local budgets need right now.

The Texas Commission on Environmental Quality is not typically a big player in school finance debates.

But an upcoming decision by the commission could strike a major blow to the budgets of many school districts that will have to be made up, in part, by the state, lawmakers said on Tuesday.

At issue is a request by Valero Energy Corp. to apply a property tax exemption for pollution control equipment, approved by voters in 1993, to refinery equipment known as hydrotreaters. That equipment removes sulfur from gasoline and diesel that reduces auto emissions.

The agency’s executive director recommended that the request be denied because the rules require the equipment to provide an on-site pollution control benefit. But that decision was appealed by Valero and in January two TCEQ commissioners directed the agency to reconsider.

That decision is still pending.

The Chron wrote about this last week and then editorialized about it on Wednesday. I can’t quite fathom the rationale for the TCEQ allowing this, but I will agree with the Chron that it would have been better if the Lege had slammed the door on these shenanigans last session. They may have to address it next year whether they want to or not.

Rick Molina, who is running for State Rep in HD144, sent out a press release about this:

Rick Molina, candidate for Texas’s 144th House District, today asked Texas taxpayers to sign his petition opposing a plan pushed by Rick Perry and his Texas Commission for Environmental Quality (TCEQ) that would harm our local school districts and raise the tax burden on Texas’s property owners. The petition can be found at RickMolina.com.

“Rick Perry already increased taxes on small businesses and now many of them are having a tough time making ends meet and creating jobs,” Molina said. “Now, we see he is about to shift more tax burden down to property owners. I just cannot understand why, as the nation is trying to recover economically, Rick Perry believes raising Texans’ property taxes is a good idea. I want Valero to be a successful, profitable company, but it must do so without looking to shift its tax burden to Texas home owners.”

The full release is here. HD144 includes Pasadena, so extra kudos to Molina for taking this on.

On a tangential note, Valero is also busy out in California trying to gut that state’s clean air legislation. They’re quite the corporate citizens, aren’t they? I stopped buying gas at the Valero in my neighborhood when I noticed a poster on their pump urging people to call their Congressperson to oppose cap and trade. They won’t be getting me back any time soon, that’s for sure.

In case you were wondering why we have bad air quality in Texas

Ever wonder why we have such lax enforcement of environmental regulations here in Texas? One reason is because the people who head up the agencies that have the power to enforce those regulations are mostly charlatans and industry apologists. Go read Forrest Wilder’s account of a farcical “Cap and Trade Summit” at which the speakers and the audience was basically energy industry lobbyists, right-wing hacks, and the state officials who are supposed to be the ones responsible for making sure they all follow the law. You couldn’t make a stronger case for more federal involvement if you tried.

More on Gene Green and climate change

Here’s a followup story on the eventually successful negotiations among members of the House Energy and Commerce Committee on the cap-and-trade bill.

Climate change legislation moving through Congress would give refiners free permits to emit greenhouse gases under a compromise engineered by a Texas Democrat whose Houston district includes many petrochemical plants.

Rep. Gene Green led the push for refiners along with Democratic Rep. Charlie Gonzalez, who represents San Antonio — home to the corporate headquarters of refiners Valero Energy and Tesoro Corp.

The two lawmakers got the deal added to a climate change bill agreed to by most Democrats on the House Energy and Commerce Committee and backed by the measure’s two sponsors, Reps. Henry Waxman, D-Calif., and Ed Markey, D-Mass.

Green and Gonzalez also scored a major concession sought by oil companies when committee leaders scrapped a proposal that would impose steadily stiffer limits on transportation-related greenhouse gas emissions — and make the industry pay for allowances to cover the excess pollutants released when their fuel is burned.

Half a loaf is better than none. Half a loaf is better than none. Half a loaf…you get the idea. I think if I say it a few dozen more times, I’ll be able to say it with conviction.

The Waxman-Markey bill, which the Energy and Commerce Committee is slated to consider next week, would cap carbon dioxide emissions at 17 percent below 2005 levels by 2020 and 83 percent by 2050.

Power plants, refiners, manufacturers and other operations could exceed the limits by buying and exchanging emissions allowances on a new carbon-trading market.

To defray costs for some polluting industries, Waxman and Markey agreed to give away more than half of those allowances in the early years of the so-called “cap-and-trade” plan, with the bulk of them — 35 percent — going to local electricity distributors.

An additional 15 percent would be donated to trade-sensitive industries, and 3 percent would be given to automakers.

Eventually, companies would be weaned off the free allowances and would then have to buy the permits from the federal government at auction.

Under the deal with Green and Gonzalez, refiners would get 2 percent of the free allowances starting in 2014 and ending in 2026.

On Friday, that agreement was being attacked by both oil industry leaders, who said it wouldn’t offer enough economic protection, and environmentalists, who complained it was an unnecessary giveaway.

Jack Gerard, president of the American Petroleum Institute, said the 2 percent free allowances is “inequitable” because it falls short of the roughly 4.3 percent of U.S. greenhouse gas emissions estimated to come from refiners.

The result, he said, will be “greater costs on consumers and producers of oil and gas.”

Yeah, dire warnings by a to-be-regulated industry about passing the cost along to the consumer is pretty much the last refuge of the scoundrel. The consumer is already bearing the costs of the pollution, in the form of adverse health effects and the eventual catastrophe that global warming will bring if it’s not checked now. It’s just that those costs are indirect, and they provide no incentive to ameliorate the underlying causes of those costs, which if dealt with would serve to lower them. So with all due respect to Mr. Gerard, I consider his words on this to have as much credibility as a Wall Street financier’s words arguing against tighter regulation of that industry on the grounds that it could damage the economy. A statement from the organizers of Friday’s rally about that event is beneath the fold.

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Voting right on climate change, take two

Yo, Democrats. You were given a mandate this past November. Please act like it.

Democratic leaders pushing to cap greenhouse gas emissions were working Wednesday to appease key lawmakers who want to ease the financial burden that the climate change plan would impose on consumers and refiners.

Rep. Henry Waxman, D-Calif., who plans to formally introduce his climate change bill today, said that he expects a new compromise deal will have enough votes on his 59-member House Energy and Commerce Committee to be approved by the panel next week.

But Waxman spent much of Wednesday huddling with wavering Democratic lawmakers on the panel to shore up support for the measure. The skeptics included Texas Democrats Gene Green and Charlie Gonzalez, who want concessions for refiners in the Lone Star State, and Rep. G.K. Butterfield, D-N.C., who wants tax relief for low-income households to defray expected higher energy costs.

The cornerstone of the bill is a plan to cap carbon dioxide emissions blamed for contributing to global warming.

Under the compromise, greenhouse gas emissions would be capped at 17 percent below 2005 levels in 2020 — a looser standard than the 20 percent reduction Waxman had originally sought. That proposed cap is more rigorous than the 14 percent goal President Barack Obama has sought or the 6 percent target advocated by some committee Democrats.

To exceed the limits, power plants, refiners, manufacturers and other industries would have to buy emissions allowances on a new carbon market. But after weeks of negotiations, committee Democrats have agreed to give away 35 percent of the allowances to electric utilities, 15 percent to trade-sensitive industries such as timber and steel manufacturing and a small number to the auto industry.

Still undecided was the question of how many allowances should be given to refiners, with the final number likely to rest between 1 percent and 5 percent.

Green, the unofficial leader of a group of oil-patch Democrats on the Energy and Commerce Committee, was pushing the higher number.

He said he wanted to vote for a bill that limits CO2 emissions, “but does it in a way that is reasonable.”

“There’s some flexibility” in the allowance allocation, Green said, “but 1 percent is not in the ballpark.”

After meeting with Waxman and Rep. Ed Markey, D-Mass., Gonzalez said he was “feeling really good” that he would get enough concessions for refiners and would vote for the legislation.

As Yglesias notes, even with all the concessions, this is still a decent bill. Could be a better one, but it could have been a much worse one, too. It’s still a big step forward. Yet it’s frustrating to realize how much has been given away, in a way that will place a larger share of the cost of these necessary changes on those who can least afford it.

We’ve discussed this before. Rep. Green is a fine Congressman, who has groomed a large number of very capable proteges. He’s also an electoral juggernaut, and you don’t get to be that way without being responsive to your constituents. So if you live in CD29 and you want Rep. Green to do the right thing, it’s up to you to tell him so. A diverse group of activists will be gathering in his district today at noon to urge him to support climate change legislation. Click on to read about this and participate if you can.

UPDATE: Looks like we have a deal.

Rep. Henry Waxman, D-Calif., chairman of the House Energy and Commerce Committee, and Rep. Edward Markey, D-Mass., signed off on the compromise with Texas Democrats Gene Green and Charlie Gonzalez. The cornerstone of their deal was a commitment to donate at least 2 percent of valuable carbon dioxide emissions permits to refiners.

The compromise on refiners — tentatively agreed to late Thursday but still subject to last-minute negotiations — could help Waxman and Markey steer their contentious climate change measure through the 59-member Energy and Commerce Committee next week.

The measure also is buoyed by a new agreement among many committee Democrats on core parts of the bill, including a plan to freely give away more than 50 percent of those emission allowances to electric power distributors, trade-sensitive industries and automakers.

“We are now one huge step toward creating a 100-year solution to the carbon problem … that will protect consumers,” Markey said.

[…]

Green of Houston and Gonzalez of San Antonio said that with the changes aimed at helping refiners and other modifications, they expected to vote for the legislation next week.

The pair, whose districts are home to the plants and headquarters of major U.S. refiners, had been pushing for 5 percent of emission allowances to be given to the industry.

Under the deal Green and Gonzalez reached with Waxman and Markey, the free allowances for refiners could begin phasing out as early as 2014; refiners would eventually have to purchase all of the allowances they need from the federal government in an auction.

By contrast, the free allowances for electric utilities would phase out over five years beginning in 2025.

Green said the deal also would delay the implementation of a proposed low-carbon fuel standard until at least 2023 — a change from Waxman and Markey’s initial plan to phase in the standard as early as 2014.

The low-carbon standard, designed to promote advanced biofuels made from plant materials, would require escalating reductions in greenhouse gas emissions from transportation fuels.

I’ll need to see what the reviews are of this, but it sounds like a positive step. Getting this passed in the first place is the big thing; it can always be tweaked later. Kudos to all for working through this.

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Voting right on climate change

It is, of course, a good thing that President Obama has Democratic majorities in both chambers of Congress as he tries to get his agenda implemented. That doesn’t mean he’ll have smooth sailing, of course – between the weirdly ahistorical insistence on a 60-vote supermajority in the Senate to pass anything and the outsized influence of the so-called “moderates”, the upper chamber has been his biggest obstacle so far. But the House can be a challenge as well, as we see in this piece on Rep. Gene Green and the fight over climate change legislation.

A 17-year veteran of Washington politics known for his low-key style and behind-the-scenes approach to legislation, Rep. Gene Green has seen his popularity skyrocket in recent days — at least with lawmakers eager to write new climate change rules.

The celebrity status comes courtesy of Green’s role as one of a handful of moderate Democrats on the Energy and Commerce Committee. His support is crucial to advancing a sweeping energy and climate change bill.

Reps. Henry Waxman, D-Calif., and Ed Markey, D-Mass., are courting the Houston Democrat and other wary lawmakers to build backing for their legislation that would cap carbon dioxide emissions blamed for global warming. Under their bill, power plants, manufacturers and other industrial operations could stay within the new limits by buying and trading emissions allowances, or permits, to spew the pollutant.

The good news for Waxman, Markey and other proponents of the so-called cap-and-trade plan is that Green believes “the United States has to lead” in limiting greenhouse gas emissions.

The bad news? Green worries about the potential price tag for oil refiners along the Houston Ship Channel he represents.

“I’d like to vote for a bill,” Green said. “But I’m not going to vote for one unless I think it’s going to be good for the area I represent.”

His eastern Harris County district is home to five refineries and “more chemical plants than I can count.”

Green has told congressional leaders and President Barack Obama that some carbon dioxide emission allowances will have to be given for free to refiners in order to win his support .

Green isn’t the only member of the Texas delegation to present a roadblock. San Antonio’s Rep. Charlie Gonzalez has voiced similar concerns, and gotten some heavy pushback in his district for it. VoteVets.org is now running a TV ad in San Antonio urging Rep. Gonzalez to support forward-thinking legislation on climate change. A different ad with the same kind of message is running in Houston – I saw it on KTRK the other night – asking people to call on Rep. Green. Public Citizen, which is among those leading the charge on this, responds to Rep. Green’s concerns. I can appreciate his position, but it’s important to remember that the cost of doing nothing will be far more substantial than any cap-and-trade implementation. Taking action now, however painful it may appear to be, will be cheaper and easier than putting it off and having to take more drastic action later.