Monday, June 22, 2009

Cap and Horse Trade II   [Edward John Craig]

Henry Payne has described in this space the horse-trading that would be necessary to get midwestern Democrats to support the Obama Energy Tax.

More recently, Jim Manzi has noted the extent of the giveaways over on the Corner and observed that there's little left in the way of emissions reductions or ration-card revenue.

[W]hen you look under the hood, there is not really a material binding cap in this bill for at least a decade. Nothing is left but the political rents. This is basically why the CBO now estimates that all those net revenues from auctioning ration cards that were going to help offset our structural budget deficit are not going to be there. In fiscal terms, Waxman-Markey will bring in almost nothing. We’ve given it all away.

Today, the Journal highlights Rep.Collin Peterson (D., Minn.), the House agricultural committee chair, who's banking on more protection$ for ethanol and coal in the final version of Waxman-Markey.

Mr. Waxman has said he is "very close" to an agreement with Mr. Peterson that would clear the way for a vote on the legislation. House Majority Leader Steny Hoyer (D., Md.) said the House is unlikely to take up climate legislation this week.

The resistance to the climate bill from Mr. Peterson and other farm-state Democrats has exposed divisions within the majority party over whether Congress should attempt such far-reaching and potentially costly environmental legislation at the same time it is trying to overhaul the U.S. health-care system.

Mr. Peterson . . . wants the party's leaders to soften the climate bill's impact on coal-burning power plants, scale back existing regulation of ethanol, and make other changes that, if adopted, could steer huge sums of money to farmers who engage in environmentally friendly practices [sic].

With Republicans expected to oppose the measure en masse, the votes of Farm Belt Democrats are critical to the House climate bill's future. But some of the changes Mr. Peterson wants could make it less palatable to Democrats who are more liberal. . . .

Mr. Peterson, who represents a rural district where 10% of the population lives in poverty, says the bill's current formula for allocating free permits would result in some states getting more permits than needed, while leaving electricity users in districts such as his facing higher energy costs.

"If they want to pass [legislation], something's going to have to change," Mr. Peterson says.

An accountant by training with a well-creased face and a fondness for cowboy boots, Mr. Peterson shows little enthusiasm for passing climate legislation. After the administration released a report last week by government scientists warning of increased heat, pests, water shortages, disease and other impacts of climate change on crop and livestock production, Mr. Peterson laughed and said farmers in his district would welcome warmer temperatures after a recent cold spell.

"They're going to be able to grow more corn," he said.

Mr. Peterson has a testy relationship with environmentalists. In May, he accused the EPA of being "in bed with the oil industry" after the agency proposed rules that could undercut the perceived climate-protection value of growing corn to make ethanol in the U.S. by counting the increased greenhouse gas emissions that would occur overseas when farmers or governments clear land to grow food in response to higher food prices.

06/22 09:30 AMShare