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The Yes Men’s Web site describes what the group does as “impersonating big-time criminals to publicly humiliate them.” On Monday, the Yes Men, a group of public advocacy pranksters, garnered national attention by pulling a doozy of a practical joke on the U.S. Chamber of Commerce.
The group held a faux news conference at the National Press Club and, posing as representatives of the Chamber, claimed the organization was immediately reversing its “troglodytic” position on climate change and its opposition to federal climate legislation. Some major media organizations, including Reuters, fell for the hoax initially before getting clued in on the stunt.
The Yes Men’s prank – while exasperating to the Chamber and those news organizations that fell for the ruse – shone a lighthearted light on important federal legislation making its way through Congress.
Hoosier companies and residents should take particular interest in the legislation. Business and environmental advocates agree it will have a heightened effect on Indiana if it passes. Hoosiers get about 95 percent of their electricity from coal-fired power plants. And Indiana’s economy is overly dependent on traditional manufacturing. Indiana enjoys relatively cheap electricity rates, but the tradeoff is heavy greenhouse gas pollution.
Here are some things Hoosiers should know about the legislation:
Q: First of all, what is “cap and trade legislation”?
A
: Hardcore environmentalists refer to cap-and-trade programs as pay-to-pollute programs. It’s a two-part regulatory system. The first part is the cap. It puts an overall ceiling on the nation’s greenhouse gas pollution. Then limits are set for every entity that releases a significant amount of greenhouse gas.
The second component is the trading system. It asks companies to either reduce carbon pollution or buy carbon credits marketed by companies with available credits. For example, an older coal-fired power plant may find it more difficult to meet emission standards than a new manufacturing plant already using renewable fuels.
The power plant can buy carbon credits from the manufacturing plant.
Companies have several options for reducing carbon emissions or gaining needed carbon credits. A factory can increase its energy efficiency, convert to a less polluting renewable energy source or invest in carbon offsets. For example, a manufacturer unable to reach its pollution-reduction goals might invest in a carbon-offset project, such as planting trees to reduce carbon pollution.
“Each facility can make its own decisions about the best and most affordable way to meet goals,” said Jesse Kharbanda, executive director of the Hoosier Environmental Council. “It’s a free-market approach to cutting carbon emissions.”
It’s a system rooted in conservative philosophy to use the market in meeting needed goals of protecting the environment from climate change.
Q: What’s in the climate legislation?
A
: The federal legislation under consideration includes two bills. The first, HR 2454, is the American Clean Energy and Security Act of 2009, also known as the Waxman-Markey bill. The House of Representatives passed the bill 219-212 in June. Using the year 2005 as the baseline, it calls for reducing the national limits on greenhouse gas emissions 17 percent by 2020, 42 percent by 2030 and 83 percent by 2050.
On Sept. 30, the Clean Energy Jobs and American Power Act was introduced in the Senate. The bill, also known as the Kerry-Boxer bill, closely resembles the House bill. It also targets seven greenhouse gases: carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride and nitrogen trifluoride. It focuses on facilities releasing more than 25,000 tons of pollutants a year.
The Kerry-Boxer bill sets a more aggressive goal of reducing greenhouse gas emissions to 20 percent below 2005 levels by 2020. The other targets are the same, including an initial 3 percent reduction in 2012.
Both bills call for similar federal cap-and-trade programs. To protect consumers and industries from being walloped with increasing energy costs and to ease the transition from fossil fuels – such as coal and petroleum products – the Waxman-Markey bill includes provisions for carbon-credit allowances.
It’s likely the Kerry-Boxer bill will also require a portion of the proceeds from carbon-credits purchases to go toward defraying consumer energy costs.
Q: What groups are lobbying in favor of the legislation, and what groups want it to die a slow, painful death?
A
: The assumption that the tree-huggers love it and anyone wearing a Brooks Brothers suit opposes climate legislation is wrong. The fans and foes of the bills don’t align with such predictability. Environmental organizations, such as the Hoosier Environmental Council, favor the legislation, and others don’t think it goes far enough.
“The bill is probably the most significant and far-reaching clean-energy legislation Congress has ever considered,” Kharbanda said. “It’s needed to protect public health, national security and long-term economic growth. And this bill will help change the nation’s energy dynamics to address all three of those issues.”
The Citizen’s Action Coalition of Indiana, on the other hand, strongly opposes the bills. It argues they will move the country backward rather than forward in reducing pollution and will cost consumers too much.
“The bill is a financial mechanism. It’s a financial mechanism to sustain the coal industry,” said Grant Smith, executive director of the coalition. “We think it’s a massive infusion of dollars into the status quo. It’s a rally around the status quo. It’s not only ineffective, it’s counterproductive and sets us back 20 years. The bills, on the House side it’s a maintenance program for coal-fire power plants, and on the Senate side it’s an expansion of nuclear energy. And it’s supposed to be about change!”
Some business organizations vociferously oppose the bills as the death of economic development, and others are lobbying hard for the Senate bill to pass.
The U.S. Chamber of Commerce opposes the legislation, but its opposition is also landing the business lobbyist in hot water with many of its members. A significant number of the Chamber’s members have withdrawn over the Chamber’s stance on climate change and the federal bills, including Procter & Gamble and many of the country’s largest energy companies.
Locally, AEP is lobbying in favor of the Senate bill.
Many businesses favor the legislation because it sets clear legal standards for carbon limits rather than leaving the issue to what they regard as an unpredictable and capricious regulatory system managed by the U.S. Environmental Protection Agency.
Q: Will it create or eliminate jobs in Indiana?
A
: An ad running in newspapers across the country suggests 2 million jobs could be lost because of the Waxman-Markey bill. The ad was sponsored by EnergyCitizens.org, an organization heavily supported by the oil industry.
EnergyCitizens.org bases its claim on a survey it commissioned from CRA International. An analysis of the claim by Politifact.com, a St. Petersburg Times fact-checking project, declared the claim untrue.
A September report from the Congressional Budget Office also disputes the job-loss allegation. Many studies suggest some jobs will be lost, but the bills will also encourage growth in the green jobs sector.
The same petroleum industry-supported report claims Indiana would lose 65,200 jobs.
Kharbanda, whose background is in economics, says the legislation is expected to create about 40,000 clean-energy jobs in Indiana.
“The most attractive thing about the legislation is that it will create clean-energy manufacturing jobs,” he said. “We will need people to make wind turbines, solar panels and geo-thermal components. Indiana is one of the few states in the country that is so poised to capture those green manufacturing jobs.”
Indiana has some advantages that the state should be taking better advantage of, including the world-renowned alternative fuel research going on at Purdue University. The state needs to transition from its overdependence on traditional manufacturing to developing more high-tech manufacturing jobs.
Gov. Mitch Daniels should be leading the campaign for the transition to renewable fuels and creating green jobs instead of opposing needed change.
Q: Will it raise energy costs?
A
: NIPSCO, one of Indiana’s largest utility companies, is protesting the legislation and telling customers that if the legislation passes, it will cause electric rates to skyrocket 130 percent over the next 25 years.
There a large number of studies circulating with varying estimates of the effect of the bill. The report to Congress from the U.S. Energy Information Agency said nationwide, electricity prices will increase by only 3 percent or 4 percent by 2020, but could increase by 19 percent by 2030. A CBO study shows the Waxman-Markey bill would cost an average of $175 more per household in 2020 (less than 5 cents per day). People in the lowest 20 percent income bracket would actually pay $40 less per year because of carbon-credit allowance program.
“It really addresses some concerns of Indiana policymakers,” Kharbanda said. “We are coal dependent and very dependent on manufacturing. This bill addresses those concerns. This bill really helps Indiana. The bill is tailored toward dealing with some very specific Indiana concerns.”
Paying more for electricity may be unappealing, but Hoosiers should remember there is also a cost attached to unabated pollution.
“One of the excessive costs of coal is the public health costs because of particulates,” Smith said. “And we pay very dearly for that here in Indiana.”
