DOE Secretary Chu’s Convoluted Climate Economics

Last week, at the first Senate Environment and Public Works Committee hearing on S. 1733, the Kerry-Boxer “Clean Energy Jobs and American Power Act,” Department of Energy Secretary Steven Chu explained the economic rationale for adopting a Kyoto-style cap-and-trade program.

His argument, in a nutshell, goes like this:

1. Reducing emissions globally will require a massive investment in “clean technologies” — an estimated $2.1 trillion in wind turbines and $1.5 trillion in solar voltaic panels by 2030. These investments will create many green jobs.
2. “The only question is — which countries will invent, manufacture, and export these clean technologies and which will become dependent on foreign products.”
3. The United States is falling behind. “The world’s largest turbine manufacturing company is headquartered in Denmark. 99 percent of the batteries that power America’s hybrid cars are made in Japan.

Endangerment Finding: Legislative Hammer or Suicide Note?

EPA’s soon-to-be-published endangerment finding definitely puts a swagger in the step of energy-rationing advocates in the Administration, Congress, and environmental groups. They believe it gives them the whip hand in Congress–a hammer with which to beat opponents into supporting cap-and-tax legislation. This is too clever by half.

Yes, as explained previously, the endangerment finding will trigger a regulatory cascade through multiple provisions of the Clean Air Act (CAA).  A strict, letter-of-the-law application of those provisions to carbon dioxide (CO₂) and other greenhouse gases would not only raise consumer energy prices. It could also freeze economic development, even shut down much of the economy. 

So, it’s not surprising that Team Obama and others think they can frighten opponents into supporting, for example, the Markey-Waxman cap-and-tax  bill, which specifically precludes CAA regulation of greenhouse gases under the National Ambient Air Quality Standards (NAAQS) program, the New Source Review (NSR) preconstruction permitting programs, the Title V operating permits program, and the Hazardous Air Pollutant (HAP) program. …