Hill Heat

From the Wonk Room.

A major new study of the success of California’s green economy by economist David Roland-Holst finds that “California’s energy-efficiency policies created nearly 1.5 million jobs from 1977 to 2007, while eliminating fewer than 25,000.” Today, California’s per-capita electricity demand is 40 percent below the national average:

Total electricity use, per capita, 1960-2001

Instead of household income being lost to the capital intensive energy sector, Californians have enjoyed the benefits of their wages being plowed into job creating sectors, such that “induced job growth has contributed approximately $45 billion to the California economy since 1972.”

Energy Efficiency, Innovation, and Job Creation in California, by David Roland-Holst, an economist at the Center for Energy, Resources and Economic Sustainability at the University of California, Berkeley, is the first study of how the savings from California’s energy efficiency standards affected its economy through “expenditure shifting” away from the energy sector. The author explains:

When consumers shift one dollar of demand from electricity to groceries, for example, one dollar is removed from a relatively simple, capital intensive supply chain dominated by electric power generation and carbon fuel delivery. When the dollar goes to groceries, it animates much more job intensive expenditure chains including retailers, wholesalers, food processors, transport, and farming. Moreover, a larger proportion of these supply chains (and particularly services that are the dominant part of expenditure) resides within the state, capturing more job creation from Californians for California. Moreover, the state reduced its energy import dependence, while directing a greater percent of its consumption to in-state economic activities.

By Robert M. Sussman, a Senior Fellow at the Center for American Progress Action Fund and former Deputy Administrator of the Environmental Protection Agency, for the Wonk Room.

The Wall Street Journal’s opinion piece, The Carbon Ultimatum, accuses Barack Obama of planning to unleash the bureaucracy of the Environmental Protection Agency in an effort to “bludgeon” Congress into enacting climate change legislation:

He plans to issue an ultimatum to Congress: Either impose new taxes and limits on carbon that he finds amenable, or the EPA carbon police will be let loose to ravage the countryside.

To support this charge, the Journal points to recent comments by Jason Grumet, an Obama energy advisor: “The EPA is obligated to move forward in the absence of Congressional action. If there’s no action by Congress in those 18 months, I think any responsible president would want to have the regulatory approach.’‘

This opinion piece, which uses the time-honored ploy of opponents of environmental progress of demonizing the EPA and ascribing sinister motives to its political overseers, has two fatal flaws. One, the specter of bureaucrats running amok and strangling the economy – by intruding into small businesses and individual households and banning fuels on which millions of Americans depend – is a fantasy of die-hard free-market zealots. In fact, a new administration could enforce new global warming regulations with common sense, focusing on large emitters of greenhouse gases to achieve reasonable reductions while spurring trillions of dollars worth of economic growth and green-collar jobs.

Second, in its zeal to accuse the EPA workforce of a naked power grab, the Journal ignores the central reason why EPA is part of the climate equation, as even the conservative law professor Jonathan Adler recognizes:

The problem with the WSJ’s narrative is that Grumet is describing nothing more than what is legally required as a consequence of the Supreme Court’s decision in Massachusetts v. EPA. Under that decision, the EPA is effectively obligated to begin the regulation of greenhouse gas emissions under the Clean Air Act. If the law is not amended, and the next Administration fails to act, environmentalist groups will file suit to force their hand – and win.

The Court’s decision came after years of evading climate change by the Bush Administration despite the mounting evidence of rising temperatures and their consequences for our ecosystems and economy. Unfortunately, the EPA remains in default on its fundamental legal responsibilities. EPA’s July Advance Notice of Proposed Rulemaking – which the Journal describes as as a “roadmap” for blanketing the US economy with onerous regulation – was in fact a further Bush delay. Instead of a scientific “endangerment” analysis, the White House directed EPA to prepare a neutral and non-committal discussion of its legal authority – a stick in the eye of the Supreme Court. They then went further by taking the unprecedented step of belittling and disowning EPA’s technical and legal analysis to score points with its allies in industry and the Republican base.

If anything, allowing EPA to move ahead under the Clean Air Act would be “non-political” because it would honor the terms of a Supreme Court ruling that the outgoing Administration has chosen to defy. How simple respect for the nation’s highest court and the law of the land equates to issuing an “ultimatum” to Congress is baffling.

From the Wonk Room.

The Bush Administration is rushing forward with plans to mine the Grand Canyon for uranium, ignoring a command from Congress to cease such operations. Since 2003, mining interests have staked out over 800 uranium claims within five miles of Grand Canyon National Park. As Mineweb reports, “The Bureau of Land Management has published a proposed rule which rejects the House Natural Resources Emergency House Resolution enacted in June that bans uranium mining and exploration near the Grand Canyon National Park.” The Arizona Republic explains what’s at stake:

Never mind that the drinking water of more than 25 million people, served by the Colorado River, is at risk.

Or that Arizona Game and Fish warns about the impact on wildlife.

Or that Grand Canyon National Park is still dealing with the toxic mess from past mines.

The proposed BLM rule would not only reject the House’s emergency withdrawal of over one million acres of federal land near Grand Canyon National Park from new uranium mining, but also eliminate the provisions that allow Congress to make such withdrawals in the future. The proposed rule, published on Friday, has a remarkably short comment period, closing in less than two weeks on October 27. House Parks Subcommittee Chairman Raúl Grijalva (D-AZ) blasted BLM’s action, saying, “This last-minute move by this ‘see if we can get it under the clock’ administration is cowardly.”

Sen. John McCain (R-AZ) has been strangely silent on this issue, despite his claimed commitment to protecting the Grand Canyon from drilling:

But McCain’s claim to Roosevelt-style environmentalism has been badly bruised by his silence on uranium mining near the park and on the Navajo Nation.

“McCain gave us hope that he might be a Teddy Roosevelt type of Republican,” said Roger Clark, air and water director for The Grand Canyon Trust, a Flagstaff, Ariz., environmental group. “Since the beginning of his run for president, including 2000, that has kind of crumbled.”

The Arizona Republic’s editorial concludes that it’s legacy time at the administration>

Surely President Bush doesn’t want his to include tainted water and a contaminated landscape. We must keep the temporary ban on uranium mining near Grand Canyon.

Written comments should be submitted online or sent to Director (630), Bureau of Land Management, 1620 L St., NW, Room 401, Washington, DC 20036, Attention: RIN 1004-AEO5.

From the Wonk Room.

As the 110th Congress comes to a close, two of the legislators in charge of climate legislation in the House of Representatives yesterday released a draft climate plan. Rep. John Dingell (D-MI), the powerful chair of the House Energy and Commerce Committee, and Rep. Rick Boucher (D-VA), chair of the Energy and Air Quality subcommittee, have primary jurisdiction in the House for legislation that puts mandatory limits on carbon emissions. Although such legislation has been a top priority for Nancy Pelosi (D-CA) since she became Speaker of the House in January 2007, Dingell and Boucher declared they would not be rushed, instead working on the 2007 energy bill, holding several hearings and releasing four white papers from October to May of this year. Dingell’s district is in the heart of the U.S. auto industry; Boucher represents Virginia’s coal country. Below is an analysis of some of the key issues raised in their 460-page draft legislation, an ambitious effort by the two congressmen.

From the Wonk Room.

Today, 152 members of the House of Representatives – over one-third of all members and nearly two-thirds of all Democrats – signed and submitted a letter to House Speaker Nancy Pelosi stating their guiding principles for “comprehensive global warming legislation” to “save the planet from calamitous global warming.” The letter, led by representatives Henry Waxman (D-CA), Ed Markey (D-MA), and Jay Inslee (D-WA), was delivered to Pelosi this morning.

The legislators describe four key goals:

1. Reduce emissions to avoid dangerous global warming;
2. Transition America to a clean energy economy;
3. Recognize and minimize any economic impacts from global warming legislation; and
4. Aid communities and ecosystems vulnerable to harm from global warming.

These are the necessary principles that should guide any path out of the climate crisis. What makes this letter significant is the strong, specific details endorsed by the 152 signatories. These include the following measures to respect the severity of the danger of rising greenhouse gas emissions:

• “The United States must do its part to keep global temperatures from rising more than 3.6 degrees Fahrenheit (2 degrees Celsius) above pre-industrial levels.”
• “Total U.S. emissions must be capped by a date certain, decline every year, be reduced to 15% to 20% below current levels in 2020, and fall to 80% below 1990 levels by 2050.”
• “A mechanism for periodic scientific review is necessary, and EPA, and other agencies as appropriate, must adjust the regulatory response if the latest science indicates that more reductions are needed.”
• “Cost-containment measures must not break the cap on global warming pollution.”
• “The United States must reengage in the international negotiations to establish binding emissions reductions goals under the United Nations Framework Convention on Climate Change . . . for the United States and other developed nations to achieve combined emissions reductions of at least 25% below 1990 levels by 2020, as called for by the Intergovernmental Panel on Climate Change.” .

The Senate is attaching their version of H.R. 6049 to the bailout bill they plan to vote on this evening.

The New York Times reports:

Senate leaders scheduled a Wednesday vote on a $700 billion financial bailout package after accepting tax breaks and a higher limit for insured bank deposits in a bid to win House approval and send legislation to President Bush by the end of the week. . . The Senate proposal would cost more than $100 billion and extend and expand many individual and business tax breaks, including tax credits for the production and use of renewable energy sources, like solar energy and wind power.

The bill would also extend the business tax credit for research and development, expand the child tax credit, protect millions of families from the alternative minimum tax and provide tax relief to victims of recent floods, tornadoes and severe storms.

Climate Progress has more.

From E&E News:

House Democrats last night added funding for rural counties to tax policy bills as part of an effort to end an impasse with the Senate that is jeopardizing extension of expiring renewable energy tax credits. But the Senate’s top tax writer quickly called the House proposal inadequate, leaving unresolved a standoff that has delayed billions of dollars in incentives for alternative power, energy-efficient buildings and other technologies.

The House may vote as soon as today on two separate tax policy bills. The first (H.R. 7201) is a roughly $14 billion package of energy provisions that mirrors incentives the House approved last week. The second (H.R. 7202) is a much larger package of business and personal credits that now includes a reauthorization through 2009 of the Secure Rural Schools program that aids counties hurt by declining timber sales on federal lands. It also now funds the Payment In Lieu of Taxes program for 2009, and the total cost for the two rural provisions combined is estimated at $1 billion over a decade. The Senate has approved a longer extension of these programs at a cost of roughly $3.3 billion.

Last week, the House voted on the energy and non-energy extenders together as one bill. While Oregon lawmakers have pushed the House to include the county funding, this and other changes to the House plan do not appear to have appeased senators who say their year-end tax package is the only one that can win the needed 60 votes. Senate Democrats say their bill is a carefully negotiated compromise with Republicans who in many cases oppose offsets for tax incentives.

But top House Democrats continued to bristle at calls to simply accept the Senate’s bill. “At the end of the day, I think what we are finding is this whole concept of having two bodies constitute the Congress – the House and the Senate – is actually being shattered,” Ways and Means Chairman Charles Rangel (D-N.Y.) said last night.

Senate Majority Leader Harry Reid and Senate Appropriations Committee Chairman Robert C. Byrd yesterday unveiled a $56.2 billion economic recovery package that will help middle-class families struggling in the weakening Bush-McCain economy.

Reid: “We must not forget Main Street as we work to address the crisis on Wall Street. Democrats believe that we must urgently pass another economic recovery package that will create hundreds of thousands of good-paying American jobs and prevent cuts in critical services for millions of Americans. With the economic news only getting worse each day, I call on the President, Senator McCain and Congressional Republicans to join us to quickly get this done for American families.”

Said Byrd: “There are consequences for failing to invest in America and the Bush Administration has fiddled while Rome has burned. The package we are outlining today addresses the rise in unemployment and high food and energy costs, and funds infrastructure repairs that will create jobs, while also aiding small businesses and rural communities to ensure that Main Street USA is here to stay. I urge all of my fellow Senators to join me in supporting swift action on these critically needed Main Street priorities.”

Key provisions of the bill would extend unemployment insurance benefits for seven weeks, address high food costs and energy prices, create jobs, promote education and job training, and aid small businesses. In addition to extending the oil shale moratorium, the bill includes the following economic provisions:

From Bloomberg:

A 26-year ban on offshore oil drilling will be dropped as part of a year-end spending bill, said House Appropriations Committee Chairman David Obey.

Eliminating the ban will allow the measure, which funds government operations through March 6, to get through Congress and be signed into law by President George W. Bush, Obey said.

“At least temporarily, the moratorium is lifted,” Obey told reporters. “This next election will decide what our drilling policy is going to be.”

The announcement was hailed by Republicans. “House Republicans have fought for months to lift these outdated bans on American energy production, and the capitulation by Democrats today is a big victory for working families, seniors, and small businesses struggling with record gasoline prices,” said House Republican Leader John Boehner, of Ohio.

The legislation, slated for a House vote tomorrow, will also include a $25 billion loan package for the auto industry, $23 billion in disaster assistance, an additional $2 billion for Pell education grants along with the annual defense, homeland security and veterans’ affairs appropriations bills.

Obey celebrated the closed process of developing the CR:

Asked if the process of has been secretive, Obey said: “You’re damn right it has because if it’s done in the public it would never get done.” He said he wanted to avoid his colleagues’ “pontificating” on the content of the legislation, saying “that’s what politicians do when this stuff is done in full view of the press.” He said, “We’ve done this the old fashioned way by brokering agreements in order to get things done and I make no apology for it.”

Update: The bill also kills the oil shale leasing moratorium.

By a vote of 93-2 (Crapo and Kyl opposed; Biden, DeMint, Kennedy, McCain, and Obama abset), the Senate passed the Baucus-Grassley Energy Improvement and Extension Act (S.Amdt. 5633 to H.R. 6049) this afternoon. The $100 billion bill extends the solar incentives through 2016 and other renewable production tax credits for one or two years. There are $8.3 billion in funds for this year’s climate disasters, including the Midwest floods and Gulf Coast hurricanes. Some tax breaks for oil companies are rolled back, but the bill is far from fully funded (even ignoring the giant AMT protection).

Significant elements of the bill, as passed: Energy incentives

• Extends for one or two years and expands production tax credits for wind, refined coal, biomass and marine renewables. $5.8 billion.
• Extends through 2016 the investment tax credit for solar energy. $1.9 billion.
• Extends through 2016 the credit for residential solar property. $1.3 billion.
• Provides new tax credits for creation of advanced coal electricity projects and certain coal gasification projects. $1.4 billion.
• Establishes a new credit for plug-in electric drive vehicles. $758 million.
• Extends credit for energy-efficient improvements to existing homes. $837 million.

Alternative Minimum Tax

• Increases personal credits against the AMT, shielding more than 20 million taxpayers from the tax. $61.8 billion.
• Protects those exposed to the AMT because of incentive stock options. $2.3 billion.

Individual and business tax credits

• Extends until end of 2009 the research and development credit. $19 billion.
• Extends until end of 2009 the deduction for state and local general sales taxes. $3.3 billion.
• Extends until end of 2009 a tax deduction for higher education costs. $5.3 billion.
• Extends until end of 2009 a deduction for a teacher’s personal expenses. $410 million.
• Lowers the refundable threshold for the child tax credit for the 2008 tax year. $3.1 billion.

Other

• Requires private insurance plans that offer mental health benefits to offer such benefits on a part with medical-surgical benefits. $3.9 billion.
• Provides tax relief to victims of natural disasters in Midwest and elsewhere. $8.3 billion.