Posted by Jeff Condon on June 29, 2009
The bill, which creates a market for carbon dioxide permits potentially worth more than $100 billion a year by 2020, regulates the way the allowances could be traded to guard against speculation with derivatives that lawmakers say might drive up the prices of electricity and gasoline.
“This bill tries to help utilities and manufacturers move to a low-carbon economy without harming consumers, draw farmers into the carbon market and keep that market transparent to prevent improper profit-taking,” Tim Profeta, director of the Durham, North Carolina-based Nicholas Institute of Environmental Policy Solutions at Duke University, said in a telephone interview. “The oil industry got fewer free permits because lawmakers believe these firms can pass the relatively low cost to their consumers without affecting their bottom line.”
Well the bill has nothing to do with not harming consumers, but you can say anything these days.
More than 70 percent of the allowances would initially be given away.
The buyoffs begin. It’s about control people.
The legislation, passed 219 to 212, largely rejected President Barack Obama’s plan to raise revenue for the federal government by selling the permits at auction and instead doled out free credits to win the support of Democrats from coal, manufacturing and farm states. Oil companies got many fewer free permits. The proposal now faces action in the Senate.
Oil refiners would receive just 2.25 percent of the allowances for free, while having to acquire nearly 40 percent of the available permits each year to cover the emissions at refineries and the carbon dioxide produced when fuels like gasoline are burned by cars and trucks, according to data from the Environmental Protection Agency.
The tax we were promised wouldn’t happen….
The oil companies received only a small number of free permits relative to their emissions so the federal government would still have some left to sell at auction, Drevna said. Oil firms, which argue the measure could lead to capacity cuts at U.S. refineries and a 77-cent increase in the cost of a gallon of gasoline, hope “cooler heads prevail” in the Senate, Drevna said.
Giving China more advangage:
Oil refineries have been blocked from getting any of those free allowances, Drevna said. As a further protection for U.S. industry, the legislation calls for carbon-based tariffs if countries like China and India don’t adopt their own greenhouse gas controls by 2020
Tightening the rules of added taxes to…. protect manufacturing?
Senator Sherrod Brown, an Ohio Democrat, said in a phone interview he wants to “tighten up” the House-passed tariff provisions “to do more in terms of protecting manufacturing.”
Banker excitement at making more money:
European emission traders are encouraged by the passage of the House climate-change bill because a U.S. cap-and-trade program would give a “huge boost” to the size of the international carbon market, Abyd Karmali, Global Head of Carbon Markets at Bank of America Merrill Lynch, said in an e-mail.
What happens when congress tightens the restrictions — How the money is made, simple eh?
The bill’s proposed ban on over-the-counter, or privately negotiated, deals for futures and other derivatives based on cap-and-trade permits and offsets, is a “significant concern,” Karmali said.
During the House debate over the bill, Democrats fought back Republican attacks that the cap-and-trade market would be open to manipulation by pledging severe restrictions on carbon- based derivatives.