The Obama administration and the Democratic leadership in Congress plan to push through a cap-and-trade carbon rationing scheme sometime this spring to address the problem of man-made global warming. Naturally this has attracted the attention of anyone who plans to use energy in the future. The Center for Public Integrity has just counted up the number of registered climate lobbyists in Washington, DC. Energy use reaches into all corners of the economy, so even Campbell Soups has now hired a climate lobbyist. As the Center notes:
Take the concerns raised by the world's largest maker of soup, Camden, N.J.-based Campbell Soup Company, one of a slew of grocery producers (including Kellogg Company, Del Monte Foods, and the Alliance of Food Associations) registered to lobby on climate change for the first time in the July-September quarter. "It wasn't until we analyzed what was going on in the House that we thought, 'Oh, gosh, we are being affected by this,'" said Kelly Johnston, Campbell Soup's vice president for public affairs, in an interview.
At issue are the free "allowances," or carbon dioxide ollution permits that the House-passed climate bill would give to manufacturers that use a lot of energy to produce internationally traded products, like steel and aluminum. Those energy-intensive industries fighting international competitors successfully lobbied for protection from loss of jobs to China and other cheap-energy countries if the United States unilaterally enacted a carbon reduction program that would make coal-burning more expensive here. But the House bill's approach means manufacturers that don't use as much energy — like Campbell — would have to bid at auction for carbon emissions allowances from the federal government. Johnston argues that Campbell should either be exempt from that process or provided some freebies, too. "I think it's clear from our view that we're not being treated as fairly as carbon-intensive industries," Johnston said. "There needs to be some recognition of the role the food industry plays in our economy."
In my column, "Energy Price Deceit" I reported on how awarding "free" emissions permits to industries favored by Congresscritters, say electric utilities, will boost the cost of energy and anything made using energy (i.e., everything):
The proposal [to allocate permits for free to utilities] merely shifts the price paid by consumers for energy from local utilities to other products and services. For example, Resources for the Future economists Rich Sweeney and Dallas Burtraw calculate that auctioning all of the carbon emissions permits would result in a price of $20.91 per metric ton. However, allocating 30 percent of the carbon dioxide emissions permits free to local utilities as proposed under the ACES bill would mean lower electricity prices, and lower prices would mean more consumption. The result is that there would 24 percent fewer emissions reductions in the electricity sector than would have been the case had all permits been auctioned.
The higher emissions in the electricity sector make it harder for other sectors of the economy—automobiles, construction, steel, cement, food processing, retail, agriculture—to stay below the national cap on carbon dioxide emissions. And this pushes up the demand for the remaining permits, which boosts their prices. Sweeney and Burtraw calculate that the requirement for increased emissions reductions in other sectors under a national cap would raise the allowance price to $26.90 per metric ton. The result, according to Sweeney and Burtraw, is that "this raises the costs of goods and services from these sectors."
So this plan to allocate "free" permits could well end up costing consumers even more than they "save" on their household electricity and natural gas bills. Fearing the electoral consequences of honesty, Congress is trying to hide the fact that they are increasing energy prices by distracting the American people with a torrent of rebates, subsidies, and tax incentives, along with plenty of happy talk about renewable energy and creating "green jobs." The result is that Congress has devised a complicated and inefficient scheme where distributing a "free" commodity actually makes products and services more expensive than it would otherwise have to be.
The Center's new report finds:
The total number of climate lobbyists working for all those interest groups, new and old, stands at about 2,780 — five for every member of Congress. That's 400 percent more than when lawmakers first considered a nationwide greenhouse gas emissions reduction program six years ago. If they all want a place at the Senate's table, there had better be plenty of chairs.
Go here for the Center's instructive lesson on how a bill becomes a law.