Coal Tattoo

Calling out the GOP on cap-and-trade

OK, I’m going to take some advice from Joseph Romm, the physicist who writes the Climate Progress blog.

Earlier this week, Romm wrote:

Time for the media to call conservatives out for repeatedly exaggerating and distorting the work of MIT — and the cost of climate action in general, which is “one tenth of a penny on the dollar.” In fact, MIT found the costs on lower and middle income households can be “completely offset by returning allowance revenue to these households.”

capito.jpgAbout that time, Jake Stump over at the Daily Mail was probably working on his story for the next day’s paper. It got front-page play, with a big headline: “Households could get hammered, Capito says; Congresswoman sounds alarm about cap-and-trade legislation.”

The story focused on Capito’s challenge in a “Dear Colleague” letter to fellow lawmakers to visit a coal mine or coal-fired power plant during their Easter recess “to get a close-up view of coal’s economic impact.” It goes on:

“They need to see firsthand the value of coal as an energy source coming on the heels of Congressman Waxman dropping a cap-and-trade bill, which endangers the future of coal,” Capito said.

Researchers at Massachusetts Institute of Technology say the cap-and-trade proposal could cost the average household about $3,128 a year.

“This is a tax on consumers,” Capito said. “West Virginians can ill afford this.”

There’s just one tiny, little problem: The MIT professor who wrote that study says the Republicans are misquoting the findings:

It has come to my attention that an analysis we conducted examining proposals to reduce greenhouse gas emissions, Report No. 146, Assessment of U.S. Cap-and-Trade Proposals, has been misrepresented in recent press releases distributed by the National Republican Congressional Committee. The press release claims our report estimates an average cost per family of a carbon cap and trade program that would meet targets now being discussed in Congress to be over $3,000, but that is nearly 10 times the correct estimate which is approximately $340. Since the issue of legislation to control greenhouse gases is now under consideration, I wanted to take an opportunity to clear up any misunderstanding created by this press release and to avoid further confusion.

(In the DM’s defense, West Virginia Public Broadcasting fell for this story, too. But at least they didn’t site the bogus GOP figure)

This whole controversy has been reported on earlier by the progressive Think Progress blog, here and here. And it’s clear that this is all part of a big press by the GOP to turn the public against the latest Democratic version of a bill to finally start dealing with climate change.

And sure, the $3,100 annual cost per household is scary. But MIT professor and report co-author John M. Reilly apparently warned the GOP before it issued the press statements that they were misleading the public:

“It’s just wrong. It’s wrong in so many ways it’s hard to begin.”” […]

“Someone from the House Republicans had called me (March 20) and asked about this,” Reilly said. “I had explained why the estimate they had was probably incorrect and what they should do to correct it, but I think this wrong number was already floating around by that time.”

I couldn’t find anything to indicate that Capito herself has cited this bogus $3,100 figure. But her press spokesman, Jonathan Coffin, said he has cited this figure when talking about the issue with the media.

And Coffin has one pretty legitimate point: He correctly notes that the $340 annual cost is based on the assumption that money raised from auctioning off carbon dioxide emissions permits would all be distributed back to American citizens, to help them offset increased electricity costs of reducing greenhouse emissions. If permit fees aren’t redistributed back to the rest of us to offset higher power bills, the annual cost increases for all us will be much higher — the GOP guesses $1,300 a year.

Reilly explained this in his letter to House GOP Leader John Boehner of Ohio:

…The average cost to a household depends on how allowances or the allowance revenues are distributed … we assumed in the analysis that we did that the revenue is returned to households.

(Of course, Reilly also noted other significant errors in the way the GOP is using the MIT analysis, including citing a simple averaging of costs that are actually borne over time and need to be adjusted for the value of money.)

The New York Times and others have pointed out that the latest Democratic climate change bill, introduced this week by Reps. Waxman and Markey, sidesteps this and some other crucial issues.

The progressive blogs Think Progress and Climate Progress don’t really make all of that clear — they just want to call the GOP a bunch of liars. But the GOP is just as bad, and you have to wonder — are they worried about finding a way to help Americans deal with the costs of fixing the climate, or are they just trying to help industry fight a climate change bill proposed by the other party?

Coal Tattoo readers deserve more, and I’m going to try to give it to you. A couple of important things:

First, President Obama wants to pass on most of the revenues from the carbon dioxide permit auction to consumers, to help them cover increased electricity bills, according to The New York Times account. Second, another Democatic bill, by Rep. Chris Van Hollen of Maryland,  would guarantee a return of 100 percent of the auction revenues to consumers.

MIT’s Reilly explained that the is a key issue (His original report is available here, and a separate analysis of the burdens on households in various income brackets here):

Many of the proposals currently being considered by Congress and as proposed by the Administration have been designed to offset the energy cost impacts on middle and lower income households and so it is simplistic and misleading to only look at the impact on energy prices of these proposals as a measure of their impact on the average household. Concern about the cost impacts on middle and low income families needs to be focused on making sure allowance or tax revenue is used to offset cost impacts on these households rather than as an excuse for not proceeding with measures that would help avert dangerous climate change.”