"I’ve never seen industry so deathly afraid of the current politics surrounding climate change policy," a Bush administration environmental official told me. With good reason. As Democrats take control of Congress, once firm opposition to the green lobby’s campaign of imposing carbon emission controls is weak.
Panicky captains of industry have themselves largely to blame for failing to respond to the environmentalists’ well-financed propaganda operation. One government official says "industry appears utterly helpless and utterly clueless as to how to respond." But the Bush administration itself is a house divided, with support for greens and severe carbon regulation inside the Department of Energy rampant, reaching up to the secretary himself.
None of this necessarily means climate change will become law during the next two years, with President Bush wielding his veto pen if any bill escapes the Senate’s gridlock. Rep. John Dingell of Detroit, reassuming chairmanship of the Energy and Commerce Committee after a dozen years’ absence, will try to protect the automotive industry from Draconian regulation. But over the long term, industry is losing to the greens.
The stakes are immense, as shown by the impact of the bill to implement the Kyoto proposal co-sponsored by Sen. John McCain, front-runner for the Republican presidential nomination, and Sen. Joe Lieberman, the favorite Democrat of many Republicans. The U.S. Energy Information Administration estimates this measure would reduce gross domestic product by $776 billion, raise gasoline prices 40 cents a gallon, raise natural gas prices 46 percent and cut coal production by nearly 60 percent. Charles River Associates, business consultants, predicts it would kill 600,000 jobs.
Yet, Jonathan Lash of the World Resources Institute last week said McCain-Lieberman does not go far enough in reducing carbon emissions. Green extremists would prefer the severe legislation proposed by Sen. Barbara Boxer, the new chairman of the Environment and Public Works Committee.
According to industry sources, Dingell has privately advised auto industry lobbyists to prepare for the worst. House Speaker-designate Nancy Pelosi is making carbon emission legislation a priority, and Dingell has warned Detroit that she expects him to move a bill through his committee. He will do his best to modify legislation, but he is obliged to follow Pelosi’s wishes and cannot play Horatio at the Bridge.
The same dilemma faces Rep. Rick Boucher, a staunch ally of the coal industry who will become chairman of the Energy and Commerce subcommittee on energy and air quality. He must balance Pelosi’s desires with the interests of the coal counties in his Southwest Virginia district.
Staunch foes of carbon regulation remain in the administration, headed by Chairman James L. Connaughton of the Council on Environmental Quality. But the Energy Department’s top executive strata have gone green.
Since moving from deputy Treasury secretary to Energy secretary nearly two years ago, business executive and financier Samuel W. Bodman has kept a low profile. In a rare public utterance on global warning Oct. 5, 2005, he said an "increasing level of certainty" about global warming fueled by carbon dioxide "is real" and "a matter we take seriously." In private meetings, he has expressed dissatisfaction with administration policy. Bodman’s under secretary, former Senate staffer David K. Garman, has shocked industry lobbyists with his criticism of the president’s views.
In the background is a pending Supreme Court decision on what the Clean Air Act requires or permits the Environmental Protection Agency to do about greenhouse gas emissions. Even if the Court says the authority is merely discretionary, McCain or any Democratic president would then crack down on industry if nothing is passed before the 2008 election.
Ultimate salvation from U.S. self-destructive behavior may come from the real world. Most European Union countries, suffering higher energy costs and constraints on growth imposed by the Kyoto pact, cannot meet that treaty’s emission level requirements. Furthermore, China is on pace to exceed U.S. emissions by 2010, meaning that unilateral U.S. carbon controls will have little impact on global emissions while driving American jobs to China.
This downside of Speaker Pelosi’s green determination ought to resonate in union halls and coalfields of Pennsylvania, Ohio and West Virginia. However, American industrialists, while wringing their hands, are not making their case.