Climate Bills and a Green Economy

Delivering Coup-De-Grace to Cap and Trade

February 9, 2010

John Kemp - President Barack Obama read the last rites for national cap and trade in 2010 on Feb. 2, while senior Democrats in the House of Representatives prepared to put a stake through its heart to ensure the Environmental Protection Agency does not try to resurrect it unilaterally without congressional approval.

Obama finally bowed to the inevitable and admitted cap and trade might need to be separated from a more popular green jobs bill in the Senate, a shift that would effectively end prospects for cap and trade in 2010.

In a question-and-answer session the president commented:

“The only thing I would say about it is this: We may be able to separate these things out. And it’s possible that’s where the Senate ends up.”

Obama made no mention of cap and trade in his State of the Union speech last week and it was absent from the list of priorities the president outlined in a meeting with Senate Democrats on Wednesday, when he called on them to “finish the job” on healthcare and financial reform.

Revenues from the sale of emissions permits have been stripped out of the president’s proposed budget — unlike last year when they were included.

Cap and trade looked impossible to do in any event following the Democratic Party’s string of election defeats over the past four months and amid mounting unpopularity.

But by admitting that it could be stripped out of the main legislation Obama essentially removed any last momentum for the controversial programme in the Senate and condemned it to defeat.

With the president now backing away from cap and trade, there is no real prospect EPA will press ahead regulating greenhouse gas emissions under its (contested) authority under the Clean Air Act. A unilateral move would be inherently political and could only come if it was sanctioned by the White House. In the current environment, there is no chance of that.

PROHIBITING EPA ACTION

Just to make sure, two senior Democrats said Tuesday they would introduce legislation forbidding EPA regulating greenhouse gas emissions under the CAA. House Armed Services Committee Chairman Ike Skelton (Dem, Missouri) and House Agriculture Committee Chairman Collin Peterson (Dem, Minnesota) promised to introduce a bill amending the CAA to make it clear that it does not allow for regulation of greenhouse gases.

Skelton bluntly argued:

“We cannot tolerate turning over the regulation of greenhouse gas emission to unelected bureaucrats at the EPA. It appears the clean energy bill moving through Congress is stalled. Let us set that bill aside and pass this scaled back energy legislation.”

In a similar vein, Peterson said:

“I have no confidence that EPA can regulate greenhouse gases under the Clean Air Act without severe harm to all taxpayers.”

Although the bill not may go anywhere, it underscores congressional hostility to a unilateral move by EPA.

HOUSE MAJORITY DISAPPEARS

Neither Skelton nor Peterson is in the “chain of command” on climate legislation. But both are among the most senior Democrats in the House and immensely influential.

Crucially, both voted for the climate bill the first time around last year (Roll Call 477), when 44 other Democrats rebelled and the bill scraped through by a majority of just seven votes (219-212).

If Skelton and Peterson now oppose the cap and trade component, the bill’s majority has effectively disappeared.

Their hostility is significant for who they are and whom they represent. Both represent conservative-leaning districts that voted for Senator John McCain rather than Obama in 2008. Skelton’s fourth district in Missouri broke 61-38 for McCain, while Peterson’s seventh district in Minnesota broke 50-47, according to data compiled by the Swing State Project.

They are among the long tail of “vulnerable” Democrats who face the voters in November and cannot rely on the president’s own (reduced) popularity to protect them. Previously loyal, they are now moving into opposition on climate issues.

LOSING THE RURAL INTERIOR

Crucially, Skelton’s Missouri is famed as the ultimate bellwether state in presidential elections — having voted for the winner in every election between 1904 and 2004 (voting for the loser only in 1956 and 2008, when it went for McCain).

It is now arguably less important as a swing state than Ohio, Nevada, Iowa and New Mexico. But even in 2008, Obama lost the state by less than 4,000 votes (0.1 percent) out of a total of almost 3 million cast. While Missouri was not part of Obama’s winning coalition, it is a state he cannot afford to write off, given his potential vulnerability in other parts of the country, which has been amply demonstrated, even on the coasts.

If cap and trade is not viable in Missouri, and with representatives like Skelton and Peterson, it is no longer viable in the current Congress. Since there is no point pushing water up hill, the administration is now abandoning it.