Humorist Jack Handy once offered this witty advice: “If you ever drop your keys into a river of molten lava, let 'em go, because, man, they're gone.”
House Democrats have figuratively dropped the cap-and-trade bill into molten lava, but apparently they just can’t let it go.
On June 26, the U.S. House of Representatives passed H.R. 2454, the American Clean Energy and Security Act of 2009. Better known as Waxman-Markey after co-sponsors Henry Waxman (D-CA) and Edward Markey (D-MA), the nearly 1,500-page bill is a comprehensive energy overhaul aimed at reducing greenhouse gas emissions that some believe overheat the planet.
But the $846 billion1 bill has spun so far from its original moorings that many environmentalists no longer support it.
On the eve of the House vote, Greenpeace Deputy Campaigns Director Carroll Muffett urged Congress to vote against Waxman-Markey, saying “[d]espite President Obama’s assurance that he would enact strong, science-based legislation, we are now watching him put his full support behind a bill that chooses politics over science [and] elevates industry interests over national interest.”2
How did an energy bill written by the environmental movement’s closest allies lose support from Greenpeace?
Perhaps because the green friends some House Democrats value most are those with portraits of Presidents on them. Or maybe they simply are too stubborn to admit the bill has spiraled out of control.
At the heart of Waxman-Markey is a cap and trade scheme in which the government creates a commodity (carbon allowances) where none previously existed, mandates its purchase (creating demand), and then limits its supply. The federal government regulates the new market and, over time, reduces the supply of allowances to reach artificial allowance caps.
Using 2005 as a base year, Waxman-Markey aims to reduce carbon emissions 20 percent by 2020, 42 percent by 2030 and 83 percent by 2050.3
Certainly liberal environmentalists laud those benchmarks, so in the eyes of the environmentalists, what went wrong?
They believe Democrats abandoned “environmental concerns” and got into bed with big business. Instead of mandating allowance purchases, Waxman-Markey gives 85 percent of the allowances away for free.4 As President Obama’s budget director Peter Orszag admitted, “[i]f you don’t auction the permits, it will be the largest corporate welfare program that has even been enacted in the history of the United States.”5
Agri-businesses would reap massive profits from Waxman-Markey. For instance, Biotech giant Monsanto successfully lobbied Congress to include offsets for farmers to encourage no-till farming practices. Tilling the soil to control weeds releases carbon. Monsanto, which makes herbicides and genetically modified seeds for no-till farming, stands to profit from this substantial giveaway.
Is that what Main Street is clamoring for? More corporate handouts?
Had the Waxman-Markey bill begun as the 1,500-page corporate welfare bill it eventually became, would either Rep. Waxman or Markey have supported it?
The Breakthrough Institute, a self-described progressive policy group, claims that because of Waxman-Markey’s offset provisions, by 2030 carbon emissions will increase nine percent over business as usual.6 In a separate study, the environmental groups International Rivers and the Rainforest Action Network report that if firms “use the maximum allowable number of offset credits, domestic emissions in 2012 would increase by 38 percent rather than decrease by 3 percent, the reduction that the cap sets.”7
Recognizing that Waxman-Markey bill might be political suicide, President Obama empathizes with Democrats who voted against it. The President said “I think those 44 Democrats are sensitive to the immediate political climate of uncertainty around this issue... They've got to run [for office] every two years, and I completely understand that.”8
If the President realizes that voting for this massive energy tax may get some Democrats voted out of office, then why are some in Congress still clinging to this sinking ship?
Perhaps they’re clinging because it is their sinking ship. Perhaps the bill was never really about addressing climate change, but about helping friends and supporters in the corporate community.
Either way – stubborn as a mule or greedy as a pig – supporters of Waxman-Markey may soon find themselves put out to pasture.
Justin Danhof is a research associate with the National Center for Public Policy Research. This paper was previously published in the Columbus Dispatch.
1 “Congressional Budget Office Cost Estimate: H.R. 2454 American Clean Energy and Security Act of 2009,” June 5, 2009, available at http://www.cbo.gov/ftpdocs/102xx/doc10262/hr2454.pdf as of July 7, 2009.
2 “Greenpeace Opposes Waxman-Markey,” Greenpeace.org, June 25, 2009, available at http://www.greenpeace.org/usa/press-center/releases2/greenpeace-opposes-waxman-mark# as of July 7, 2009.
3 “House Energy and Commerce Committee passed H.R. 2454,” Press Release, United States House of Representatives Energy and Commerce Committee, May 21, 2009, available at http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1630:energy-and-commerce-committee-passes-comprehensive-clean-energy-legislation&catid=122:media-advisories&Itemid=55 as of July 7, 2009.
4 Martin Feldstein, “Cap-and-Trade: All Cost, No Benefit,” The Washington Post, June 1, 2009, available at http://www.washingtonpost.com/wp-dyn/content/article/2009/05/31/AR2009053102077.html as of June 10, 2009.
5 Dave Stancliff, “Clean Energy Bill Should Have 100 Percent Auction of Carbon Emission Permits,” Times-Standard, June 14, 2009, available at http://www.times-standard.com/davestancliff/ci_12588521 as of July 7, 2009.
6 “Climate Bill Analysis, Part IV: Emissions ‘Cap’ May Let U.S. Emissions Continue to Rise Through 2030,” Breakthrough Institute, Breakthrough Blog, May 21, 2009, available at http://thebreakthrough.org/blog/2009/05/climate_bills_offsets_provisio.shtml as of July 7, 2009.
7 “Waxman-Markey Bill: No Cuts until 2026!,” International Rivers, April 15, 2009, available at http://www.internationalrivers.org/node/4223 as of July 7, 2009.
8 Natfali Bendavid and Greg Hitt, “Democrats Present Hurdles for Obama,” The Wall Street Journal, June 29, 2009, available at http://online.wsj.com/article/SB124623280277166361.html as of July 6, 2009.
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