Global warming legislation expected to be introduced tomorrow could provide giveaways worth hundreds of billions or even trillions of dollars to polluting industries, according to an analysis of a draft of the legislation conducted by Friends of the Earth.
The cap-and-trade legislation, sponsored by Senators Joe Lieberman (I-Conn.) and John Warner (R-Va.), would attempt to limit U.S. greenhouse gas emissions by setting annual emissions limits for each industry. Under this legislation, a set amount of greenhouse gas pollution would continue to be allowed -- and the way in which these transferable allowances, or permits, would be allocated could richly reward the country's largest global warming polluters, as each permit could be sold or traded for cash just like a stock or a bond.
"What we're looking at is the potential for corporate giveaways that are orders of magnitude larger than anything environmentalists have ever faced -- potentially the biggest corporate giveaways in American history," said Erich Pica, one of the authors of the Friends of the Earth analysis of the August draft of the legislation. "Polluters should have to pay for their pollution, not be rewarded for it."
The Friends of the Earth analysis found that the coal industry in particular stands to benefit from this legislation, precisely because it is currently the industry most responsible for global warming pollution. Depending on market conditions, the coal industry could receive permits worth up to $231 billion in the first year alone, 48 percent of the total permit allocation. It could then sell or "trade" its permits to others for their cash value, or it could emit at no cost carbon that less fortunate industries would have to pay to emit.
"If Congress is going to implement a cap-and-trade system, it should auction off 100 percent of permits so that taxpayers reap the financial rewards. We could use that money to help Americans adjust to higher energy costs, and to subsidize clean, alternative forms of energy," Pica said. "Instead, Senators Lieberman and Warner have proposed auctioning off only 24 percent of permits at the outset of this legislation, setting up a rigged market in which most permits are handed out to polluting industries for free. If you see a lot of polluters lining up in support of this legislation, that's why."
While the specific language of the legislation being introduced tomorrow could differ somewhat from the draft circulated in August, permit allocations will reportedly continue to be a problem. Friends of the Earth will update its analysis after the legislation is introduced to reflect the final numbers in the bill.
Friends of the Earth's analysis of the Lieberman-Warner draft can be found at http://foe.org/globalwarming/Coal%20Rush.pdf.
Wednesday, October 17, 2007
"It's the biggest corporate giveaway in the history of the planet!"