Waxmen-Markey Disaster Makes it Out of the House

The key to passage of the bill was a compromise over "indirect land-use changes". Anyway the only way this bill reduces emissions is by killing economic growth. The bill is a disaster and just like the stimulus bill contains favors and boondoggles. As for the cap and trade program, most of the permits are free for starters and then the government begins to charge the energy companies who in turn will roll the cost onto us. Talk of rebates and cost offsets is a scam and leaves government with an even bigger favor machine, which is what this bill is all about in the first place.

Climate change legislation still must get through the Senate. Senators were expected to try to write their own version but prospects for this year were uncertain.

After the House vote, Senate Majority Leader Harry Reid said he hoped the Senate can pass a bill "this fall."Obama praised the House for taking "historic action" and urged the Senate to act. "It's a bold and necessary step that holds the promise of creating new industries and millions of new jobs, decreasing our dangerous dependence on foreign oil," Obama said.

With the House action, Obama will be able to tout significant progress toward tackling global warming after years of foreign countries criticizing Washington for not participating in international efforts.

The bill requires that large U.S. companies, including utilities, oil refiners, manufacturers and others, reduce emissions of carbon dioxide and other gases associated with global warming by 17 percent by 2020 and 83 percent by 2050, from 2005 levels.

They would do so by phasing in the use of cleaner alternative energy than high-polluting oil and coal.At the core of the bill, which is around 1,500 pages long, is a "cap and trade" program designed to achieve the emissions reductions by industry.Under the plan, the government would issue a declining number of pollution permits to companies, which could sell those permits to each other as needed.

Its a tax increase and breaks another of Obama's pledges not to raise taxes in a recession. By the way no one really knows whats in the bill or how it works so just like the stimulus package expect outcry and scandal after it becomes law. Of course the offset aspect is even more inane then any credit derivative swap:

Several House members expressed concern about the market to be created in carbon allowances, saying it posed the same risks as those in markets in other kinds of derivatives. Regulation of such markets would be divided among the Environmental Protection Agency, the Commodity Futures Trading Commission and the Federal Energy Regulatory Commission.

The bill also sets a national standard of 20 percent for the production of renewable electricity by 2020, although a third of that could be met with efficiency measures rather than renewable energy sources like solar, wind and geothermal power.It also devotes billions of dollars to new energy projects and subsidies for low-carbon agricultural practices, research on cleaner coal and electric vehicle development(PORK BARREL!)

The only silver lining is that some of the more onerous costs start in a couple years which would allow the GOP time to get back into power to reverse the worst of this bill. Its clear they got the votes by buying them with favors and pet projects. In the Senate they might be able to kill it and they certainly will create a different one, a bill we hope will be unpalatable to the house leading to its defeat. Waxmen and Markey need to be defeated, period.