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The Independent/UK

US Coal Lobbyists Unveil Nightmarish Vision of Life After Cap-and-Trade Law

Stephen Foley

US businesses have spent tens of millions of dollars trying to kill a proposed law that would introduce European-style "cap-and-trade" rules on carbon emissions - even before the bill hit the floor of the Senate for discussion yesterday.0603 03 1

Lawmakers began a week-long debate of measures to tackle climate change amid predictions of dire consequences if carbon emissions were capped. Television viewers have been treated to visions of a dystopian future where Americans are forced to cook their breakfast over candles, or where thousands of jobs have been lost because of what one opponent called "economic disarmament" by the US.

Despite publicly supporting emissions reductions, the coal industry and electricity firms that use coal-fired plants - which stand to be most affected by new restrictions - have been among those funding a lobbying effort to derail the current proposals.

And they received the public backing of the Bush administration, which claim-ed cap-and-trade could reduce US GDP by as much as 7 per cent by 2050 and send petrol prices soaring. "As you can imagine, our opposition to this will be quite strong and we'll be making these points throughout the week," said Keith Hennessey, director of the President's National Economic Council, at a White House forum. George Bush said he would veto the bill.

The legislation the Senate will debate is therefore not expected to become law this year, but opponents fear it could become the basis of a political consensus, which would be easier to enact under a new president next year. The law could cut total US global warming emissions by 66 per cent by 2050, according to a summary of the measure.

"We're committed to supporting legislation to enact a mandatory federal programme to reduce greenhouse gas emissions," says America's Power, the lobby group funded by the coal industry. "However, we can't jump on the first train that comes by."


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Last year, the industry quadrupled the budget of Americans for Balanced Energy Choices, another lobby group that helps fund America's Power, and its own trade association was given a 20 per cent increase in spending power to $19.7m (£10m) to promote cleaner coal technologies and to prevent the coal industry from being hurt by carbon caps.

Some coal industry executives have been involved in discussions with environmental groups and lawmakers aimed at achieving a consensus, but the details of how a cap-and-trade scheme might work have left them far apart. After the implementation of a cap, big polluters will be able to trade emissions permits with companies that have cut their emissions, a scheme that will effectively put a market price on carbon emissions and spur businesses to introduce cleaner technologies. At issue is whether, and what proportion of, emissions permits would be handed free to current polluters like the coal industry, or whether they should all be auctioned. At best, allocation of the permits will cause some unseemly bargaining; at worst, disagreements could paralyse the whole scheme.

America's Power is running ads promoting cleaner coal as a solution to concerns about the US dependence on imported oil. The US Chamber of Commerce and a free market lobby group, The Club for Growth, meanwhile, has been running more arresting adverts, reflecting the grave concerns of many in the business community.

John Engler, president of the National Association of Manufacturers, said the proposals in the current bill amounted to "economic disarmament", and The Club for Growth ads take up this theme, asking: "Are the unproven benefits of legislation worth the major job losses?"

The Chamber of Commerce commercials feature suburban families unable to heat their homes, wearing scarves indoors, cooking over candles, and running - rather than driving - to work. It asks: "Is this really how Americans want to live?"

Senator Barbara Boxer, a Democrat and chief sponsor of the legislation, said the auction of some emissions allowances will bring in new revenue that the federal government could use to subsidise consumers' energy bills. Environmental groups say the economic issues should not override the need to tackle climate change.

© 2008 The Independent

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