Global warming has moved to the forefront of the congressional agenda thanks to a new bill sponsored by Sen. Joe Lieberman, I-Conn., and John W. Warner, R-Va., that would restrict emissions of greenhouse gasses such as carbon dioxide.
Environmental groups give the bill mixed reviews, but undoubtedly pleased is Lieberman’s top donor, which stands to profit from this bill that will raise the costs of energy and goods for all Americans.
“America’s Climate Security Act,” as the bill is dubbed, would require factories and power plants (among others) to spend greenhouse gas “allowances” if they emit CO2, methane or any other greenhouse gas.
Some allowances would be handed out by the government, and others would be auctioned off, with the proceeds going to fund renewable fuels or alternative energy. The sponsors say the cap on greenhouse gas emissions will ward off the worst effects of global warming.
For many companies, including Connecticut’s United Technologies, this bill would spell profits. It would pay them for things they’ve already done and increase demand for their products by increasing the costs of goods and energy.
Power plants, manufacturers and shippers would all see added costs, because they would have to pony up — either to government or to companies holding extra allowances — for the right to emit greenhouse gasses.
Coal, currently the cheapest way for Americans to generate electricity, is highest in CO2, but many other products and processes (including gasoline, heating oil and fertilizer creation) also generate greenhouse gasses. Sen. James M. Inhofe, R-Okla., said the bill would raise a family’s utility bills by $3,500 a year.
A New York Times editorial lauding the bill warned: “The coal industry will try very hard to weaken the bill, and it has assembled a large war chest for that purpose.” It’s worth noting, however, that many big businesses are lobbying hard in favor of Lieberman’s bill — including Lieberman’s biggest donor.
United Technologies Corporation’s PAC and employees have contributed nearly $250,000 to Lieberman’s campaigns since 1989, more than any other company, according to the Center for Responsive Politics. The company has also spent $6.5 million on lobbying in the last 18 months.
In letters to Congress, and presumably in their lobbyists’ visits to Capitol Hill, United Technologies has been advocating “a national climate change policy” featuring a cap-and-trade scheme, funding for alternative energy sources, and “recognition of voluntary early action.” That’s just what Lieberman sponsored.
Lieberman and Warner’s bill provides the “early-action credits” that will benefit UTC. By becoming more energy efficient in recent years, the company has saved money on energy costs, but has also earned the praise of environmental groups by reducing pollution and CO2 emissions. Now, thanks in part to their lobbying efforts, consumers and taxpayers might be paying them for what they’ve already done.
The term for this behavior is “rent-seeking” — manipulating the law so that you get paid for doing something that you couldn’t get paid for in the free market. Other manufacturers or power generators will be the immediate rent-payers if Lieberman’s bill passes, but the ultimate cost will land on consumers — just ask UTC’s top lobbyist on this issue, Jeffrey Marks.
When Marks was a lobbyist for the National Association of Manufacturers, he told the Associated Press: “Forcing utilities to reduce greenhouse gasses, including CO2, would cause electricity prices to skyrocket for every business and homeowner in America.”
Those added costs provide the profit opportunity for United Technologies. For example, UTC is developing a product that would allow manufacturers to capture waste heat and turn it into electricity.
It will be an expensive product, and so the electricity savings would have to be large to make it worthwhile. Lieberman-Warner, by raising the cost of electricity, makes this product more valuable — while raising everyone else’s costs.
The Lieberman-Warner bill contains another provision pleasing to United Technologies: When the government auctions off greenhouse gas allowances, the proceeds go toward alternative energy and emissions-reduction research — just the sort of R&D United Technologies engages in.
Despite claims of “consensus” on the causes, the extent, and the effects of global warming, it’s not entirely clear if Lieberman’s bill will do anything good for the planet while making life more expensive for everyone else. The benefit to Lieberman’s top donor, however, is nearly certain.
Timothy P. Carney’s column appears Fridays in The Washington Examiner. He is senior reporter for the Evans-Novak Political Report.
