Coal Tattoo

It must be op-ed debunking day on Coal Tattoo … first, there was my earlier post, Industry attack hardly lays a glove on WVU coal cost study. And now, there are some points crying out to be made about today’s Gazette op-ed on the climate change bill by Jan Vineyard, chairwoman of the West Virginia Business & Industry Council.

For those who don’t know, the Business & Industry Council is made up of the top executives of industry trade associations in West Virginia — like the West Virginia Coal Association and the West Virginia Manufacturers Association.  As well as being chairwoman of the council, Vineyard is executive director and lobbyist for the West Virginia Oil Marketers and Grocers Association, which is the trade group for gas stations and convenience stories.

jan_bio.jpgIn today’s op-ed, Vineyard blasts the Waxman-Markey climate change legislation (the American Clean Energy and Security Act, or ACES Act), saying it “does not make economic or environmental sense for the whole country, but … would be nothing short of punitive for West Virginia and other states that are major producers and users of coal.”

It’s no surprise that West Virginia business leaders oppose this bill. The PR barrage is probably just starting. It reminds me of the push by the coal industry and coal-fired utilities more than a decade ago against efforts by EPA to make power plants in the Ohio Valley clean up nitrogen oxide emissions that contribute to smog.

Well, it pretty much reminds me of the industry response to any effort by regulatory agencies to try to curb the negative environmental impacts of coal. But in attacking the climate bill, Vineyard gets a few things very wrong, and it’s important for West Virginia readers of Coal Tattoo to be aware of these scare-tactic arguments.

First, Vineyard describes the bill as “using a complicated ‘cap-and-trade system’ ” that she says:

… Virtually criminalizes the burning of coal and the carbon emissions that go with it.

Criminalizes? Come now.

Yes, the bill actually does contain some criminal penalties for fraud related to the trading market for carbon dioxide emissions. (Check it out here, go to TitleVIII, Subtitle D, Section 1041, or go to the bill text and search for the word “convicted”). I would think Vineyard would like those provisions, given that she’s concerned that the CO2 trading market is “tailor-made for manipulation”. (Read more about these parts of the bill here, here and here).

But the bill hardly criminalizes the burning of coal or emissions of greenhouse gases. It does regulate these emissions. But the United Mine Workers of American has said:

As it stands now, the amount of money dedicated to coal in this bill is remarkable, and the future of coal will be intact.

And, as Congressman Rick Boucher, a Democrat from Virginia’s coalfields, has said on the House floor:

The Environmental Protection Agency projects that by 2020, the usage of coal in our economy will grow as compared to today’s usage. Now, that may seem somewhat counterintuitive in a bill that regulates greenhouse gas emissions, so let me repeat that: the EPA projects that by 2020, coal usage in America, under the terms of this bill, will actually grow. 

Next, Vineyard alleges that the “economic hammer” of this bill “would fall heaviest on places like West Virginia,” and she cited the following as evidence:

According to projections by the nonpartisan Congressional Budget Office, enacting the Waxman-Markey bill would cost the average U.S. family $1,600 a year in after-tax household income.

We’ve seen this $1,600 figure before, thrown around by GOP Rep. Shelley Moore Capito, as part of the Republican party’s attacks on climate legislation, in which they distorted the work of MIT scientists on the costs of such legislation.

But Vineyard is citing the $1,600 figure as coming from the Congressional Budget Office, not MIT. Turns out that such a figure did come from the CBO at one point. But the figure was not an estimate of the costs of Waxman-Markey in particular, as David Roberts has explained in Grist.

And, the real CBO estimates for the Waxman-Markey bill are far different, as Joe Romm has written over at Climate Progress:

On June 19, the Congressional Budget Office announced that the average household would spend a miniscule amount to reduce global warming pollution under H.R. 2454.  This independent analysis determined “that the net annual economy-wide cost of the cap-and-trade program in 2020 would be $22 billion—or about $175 per household.”  This is 48 cents per day –- a little more than the cost of a postage stamp.

Not for nothing, but as Romm also observed:

Signficantly, CBO’s estimate also does not include the economic benefits of other provisions in H.R. 2454. The American Council for an Energy Efficient Economy estimates that the efficiency provisions alone could save businesses and consumers $22 billion annually by 2020.  The savings would be $170 per household in 2020 –- roughly equal to CBO’s cost per household estimate for ACES in 2020.

Finally, Vineyard also cited a study by the “respected consulting firm,” CRA International that she says:

… Projects that the bill would drive a net reduction of 2.5 million U.S. jobs and that’s after allowing for the vaporware of the new  ‘green’ jobs that backers are betting the bill would create.

OK, I admit I didn’t have any idea what she meant by “vaporware.” So I looked it up …

Vaporware is a term used to describe a product, usually software, that has been announced by a developer during or before its development and, therefore, may never actually be released.

And I also looked up these folks from CRA International, and it turns out their track record in criticizing “cap-and-trade” pollution control programs isn’t very good. As The Wonk Room has reported, these are some of the same folks who  issued gloom-and-doom projections about the 1990 Clean Air Act’s cap-and-trade provisions for sulfur dioxide emissions:

Their projections proved to be wildly inaccurate. They estimated the acid rain cap & trade program would “cost electric utility ratepayers $5.5 billion annually between enactment and the year 2000, increasing to $7.1 billion per year from 2000-2010.” In fact, electricity prices actually dropped:

Average electric rates dropped from 8.05 cents per kilowatt hour when the Clean Air Act was passed in 1990 (calculated in 2000 dollars) to 7.48 cents per kwh . . . in 1995, to 6.81 cents per kwh . . . in 2000. By 2006, electricity was up slightly to 7.63 cents per kwh (2000 dollars) but still 5 percent less than before the acid rain program began.

What’s more, by 2003, the Congressional Budget Office concluded that the acid rain cap & trade program had “the largest quantified human health benefits – over $70 billion annually – of any major federal regulatory program implemented in the last 10 years, with benefits exceeding costs by more than 40:1.” In 2002, The Economist magazine called it “the greatest green success story of the last decade.” 

ClimateWire, via The New York Times, has reported on how the Warring Climate Cost Estimates have muddied the debate over this legislation. And I’ve cited numerous times this observation from Nobel-winning economist and New York Times columnist Paul Krugman:

…It’s important to understand that just as denials that climate change is happening are junk science, predictions of economic disaster if we try to do anything about climate change are junk economics.

Last week’s Gazette editorial noted that  regulation of “carbon pollution would have a strong effect on West Virginia’s coal and gas industries – until the unknown day when technology breakthroughs finally enable fossil fuels to be burned cleanly. ” The editorial continued:

America might be on the brink of a major economic change. West Virginia, perhaps more than any other state, has a lot riding on Washington’s decision. 

West Virginians deserve a robust debate on the issue … but also a debate based on facts and reasoned thinking with an eye toward the future.