April 1, 2009

Hallowed Halls

It s becoming more and more apparent that cap and trade is not going to be passed into law any time soon.

First there is the Thune Amendment:

To amend the deficit-neutral reserve fund for climate change legislation to require that such legislation does not increase electricity or gasoline prices

As Roger Pielke Jr. points out this effectively defeats the purpose of cap and trade.

The Thune Amendment effectively kills cap and trade as a mechanism for reducing emissions. I have little doubt that the legislation will go forward, and it likely will pass in some form and do many things. Its just that reducing emissions won’t be among them. Cap and trade is dead, but the charade will go on.

This was done with such overwhelming support by both parties (89-8), it shows that there is just no appetite for increasing energy prices in the current economic climate.

Then there was reconciliation vote on climate change which basically lets Republicans and like minded Democrats, kill any cap and trade with a filibuster. This too was kept in tact in the Senate today by a vote of 67-31. Again a bi-partisan smack down of cap and trade.

In effect what this does is make anything that may come out of the House, despite a lot of theatrics and bluster, meaningless. The Senate will kill any attempt to impose a cap and trade this year. That's the good news.

The bad news is what will the Administration do? Now that all of the players are in place for the Obama Administration and they have the ability to regulate CO2 through the EPA (Thanks Supreme Court) will they do it? The practical wisdom has been that the threat of the EPA using their power would make the congress act to forestall that eventuality, well the congress acted but not the way the pundits expected, so the ball is back in the Administration's court.

I think Obama will eventually unleash the EPA, though not soon, he will try to force congress but ultimately Obama will let the EPA regulate CO2. That will be his Waterloo, especially if we have another cold snowy winter.

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