Thursday, September 17, 2009

Review This

As some of you may have seen on our sister site Act Green yesterday, CBS's Declan "I Don't Know My Own Job Title" McCullagh trumpeted the Competitive Enterprise Institute for their "analysis" of months-old documents from the Obama Adminstration. Of course, their fuzzy math resulted in numbers that would make Chicken Little blush, and had little to no basis in reality. LCV's own Navin Nayak put it most succinctly (via POLITICO):
The League of Conservation Voters' Navin Nayak points out to me that the documents are a bit less than meets the eye: They refer to a version of the legislation profoundly different than the one that passed. Specifically, the original White House plan had 100% of emissions permits being distributed by auction; the plan that passed has just 15%. "Can you say 'irrelevant analysis'? It would be like pricing the health care bills currently in front of Congress based on a single-payer system," he writes.

He also notes that the revenue comes directly from polluters, not taxpayers, and continues (and I'm quoting him at length because my original post was sloppy):

"Why not use the CBO analysis of the house bill? Republicans seem more than happy to use CBO when it helps their case (i.e. Against some of the health care bills). But CBO said that ACES would only cost a postage stamp a day per household...in 2020."
Within that piece, the Treasury Department responds, labeling the study "flat out wrong."

In a shocking turn of events, the National Review, lacking a legitimate counterargument that the CBS piece was irrelevant, went on the attack against LCV. Specifically:
Well, CEI never said that the documents refer to the cost of cap and trade as it passed the House (for the record, the 15% is a bait-and-switch payoff to industry, with the percentage moving to 100% over a number of years), but the figure accurately reflects the likely cost of the president's proposal, which is, amazingly enough, also the actual position of none other than the League of Conservation Voters:

By embracing a mandatory cap-and-trade program, the Obama energy plan would provide incentives to cut production of carbon dioxide and other pollutants that cause global warming. In addition, because this program is a 100% auction, this system will generate significant revenues for reinvestment in job-creating, clean energy industries.

So what's going on here? Is the LCV now fully behind the 15% plan? Or is it annoyed that it has been established that its favored 100% plan is actually just as expensive as everyone now realizes it is?
Well let's take a stab at that, shall we?

As you seem to freely admit, a 100% auction will happen during the course of the House-passed bill following an interim transition. And, for the sake of argument, let's say that the 100% auction generates the upper bound of revenue at $200 billion that the Obama documents stipulate.

The math of CEI concludes that $200 billion in the program's revenue equals $1,761 in taxes per year per American household. Note that the number $1,761 does not appear in the obtained documents. So how did CEI come up with that number? By averaging the potential revenue by the number of households in the United States.

Does that seem unsophisticated? Perhaps, even (gasp) inaccurate?

That's because it is.

Let's jump straight to the major flaw in CEI's math. A carbon cap program is designed to, well, how do we put this, cap carbon from large carbon emitters. How does it do that? By charging said emitters for their carbon output. Do you know who doesn't emit giant amounts of carbon? That's right, the average (or any) American household.

The revenue raised in a cap and trade program comes exclusively from coal plants, oil refineries and the like, to shift the cost (both in cleanup and in health effects) of carbon from the taxpayer you purport to protect, to the industries responsible.

Instead, CEI that would assume that all the revenue generated would come from every taxpayer, not carbon emitting industries.

In addition, CEI assumes all revenue from a carbon cap program would, in the words of a particularly insightful colleague, be piled on the White House lawn and burned. The funny thing about money is that once you have it, you can spend it, on say, things like consumer protection. Or investments in renewable technology and energy efficiency, which save electricity and thus household costs. Both of which are focal points of the House-passed bill, and, because you all choose to focus on it, is also a linchpin of the Obama plan:
Fifteen billion dollars of the money generated would be directed to clean-energy projects, the Post said, citing sources familiar with the document.

Another 60 billion would go to tax credits for lower- and middle-income working families, and the rest to help families, small businesses and communities deal with higher energy costs, the paper reported.
So, yes, LCV still advocates a 100% auction. And yes, the House plan we supported would auction nearly all the allowances. And no, our positions aren't conflicting at all. We, unlike others, have the benefit of working from sound math and science. Math that stipulates that the costs to the consumer are marginal (like here and here and here), and that doesn't even begin to tally in counterbalancing cost savings from the efficiency standard. And science that stipulates that global warming is real - I hear they don't just give these things out, either.

Which segues nicely, finally, to a rebuttal your last, so eloquently made point:
(BTW, I'm guessing the LCV's response: EXXXXOOOONNNNNNN!!!!)
Well, as you can see, Exxon doesn't come into play too much here. But they are absolutely relevant when they fund faulty studies, have the coffers to outspend everyone, and bankroll institutions entirely devoted to denying global warming. Oh, and then lie about it. Because it's much easier to say one thing (with pretty greenwashing commercials) and do another (advocate against any plan that will price carbon, lest you lose some of your historic record profits) than to have values.  Values that could include saving our planet from the catastrophic affects of global warming, much of it due to their irresponsible behavior and refusal to be held accountable for it.

So far be it for the Exxon Collection Institute to defend them, right?

1 comment:

Mrs. Blumenthal said...

Why anyone would take CEI seriously is beyond me. These people are shills. They will say whatever anyone want them to as long as they give CEI enough money. And that doesn't take much when you're a b-list "think tank" (and I use the term loosely) like CEI. They are so insanely jealous of Cato (and I am at least acquaintances with almost all the junior staffers at CEI) they are willing to blindly shill for anyone that will have them. If they had as much talent in their whole organization as Cato has in it's pinkie finger, they would be far better of than they are now. CEI: stop jerking off to Ayn Rand and grow up. If you have to lie to win, you might want to reconsider your argument.