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TOPIC: "Energy bill packed with tax breaks" (Jeanne Cummings, Politico, 5/12/10)

Sanders

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Date: May 12, 2010

"Energy bill packed with tax breaks" (Jeanne Cummings, Politico, 5/12/10)	Permalink

Energy bill packed with tax breaks By JEANNE CUMMINGS \| 5/11/10 8:02 PM EDT The long-awaited energy bill that will be introduced in the Senate on Wednesday provides for billions of dollars in consumer refunds and tax credits to offset price hikes, while the nation tries to wean itself from foreign oil and reduce harmful emissions into the atmosphere. The legislation, called the American Power Act, was drafted by Sens. John Kerry (D-Mass.), Joe Lieberman (I-Conn.) and Lindsey Graham (R-S.C.) in consultation with business and environmental groups. According to a cryptic draft summary circulated on Capitol Hill on Tuesday night, the legislation seeks to reduce harmful emissions by 17 percent by 2020 and 80 percent by 2050. It would impose a national set of emission standards that would result in the shuttering of two state-run cap-and-trade emissions programs already operating on the West and East coasts. Those states would be compensated for the lost revenue. In response to the spreading oil spill in the Gulf of Mexico, the legislation would allow states to ban oil drilling within 75 miles off their coast. States that do permit drilling could share in nearly 40 percent of the oil profits, but about 13 percent of that income would have to be used on conservation projects. According to sources, a plank that would have allowed drilling in the eastern part of the Gulf has been dropped, which could ease filibuster threats from Sen. Bill Nelson (D-Fla.). Another provision would give the Department of the Interior new power to assess the environmental impact of drilling. As the energy sector adjusts to new emission standards, utility companies would receive tax rebates to ensure that consumers are protected from price spikes. Some consumers could also be eligible for energy tax refunds under the law. According to the summary of the bill, roughly two-thirds of the revenues generated by the new law would be passed back to consumers through energy bill discounts or direct rebates. The legislation would also provide assistance to businesses that are heavy energy users or trade sensitive. The vast majority of the revenue envisioned in the legislation would come through a variety of programs aimed at putting a price on carbon emissions. However, the draft version offered scant details about how those programs would work. For instance, to put a price on the carbon in exhaust emissions, the legislation is expected to set a cap on them and require transportation firms to buy permits for each ton of carbon emissions. But those details are not in the summary. More @ Politico.com ---------------------------------- While the government will make $$$ handily off of the trillions of dollars of carbon trading market (on the trading of which Fannie Mae seems to be holding patent - what's that all about?), these tax-cuts are temporary and can be easily reversed/revoked/can be left to expire... and in the meanwhile all producers of all products will raise their prices to pass on their incurred cost (which the carbon taxes and trading costs would be) with margins on top of that... and then the service sector will raise their prices to make up for the inflation... and so on. This is bad news. Every product and service has a 'global wellness' and 'human value' component to it. The current proposal seems to be defining the global wellness as a separate element to be priced and factored into the products, as if it was never there before. From a theoretical 'value proposition' standpoint, I understand this completely.. but the creation of artificial assets and trading them and eeking tax dollars out of that - that has risks for the economy... especially if these 'assets' are not managed. The real solution which is definitely requiring those good actions that the "carbon trading' is supposed to police is definitely needed. But the artificial asset creation and trading market - that is just awful for the economy. The real goal here is to have so much improvement that we actually have more credits than debits in that carbon market. But the market will depend on the buyers of these credits just as much. So, here is the interesting question that I have pondered on... IF THIS GOES THRU... what do we need to do as consumers to keep the prices in check? As consumers, our power is in looking closely at companies to see how much they are in the hole on carbon credits. The more they are in the hole, the greater their cost-share in pushing that cost to us as consumers. Companies will necessarily need to be inventive on ways to reduce their carbon deficit account. We as consumers may have to push each company to disclose its carbon account balance. A new game altogether. Note that there are some natural material extraction companies that are necessarily at a disadvantage in this equation. Their core business is itself not in keeping with the new framework being proposed. They will have to find ways to extract that is far less harmful to the environment and to the people, and find more ways to bring green back to earth. Huge challenge to manage, and even bigger to swallow for companies. I just hope that the prices do not shoot up... or if they do, we will become even bigger importers of China-made products and that simply defeats the original goal. -- Edited by Sanders on Wednesday 12th of May 2010 04:52:36 PM __________________ *Democracy needs defending* - SOS Hillary Clinton, Sept 8, 2010 Democracy is more than just elections - SOS Hillary Clinton, Oct 28, 2010 Madam Secretary Blog at ForeignPolicy.com Project Vote Smart - Stay informed and engaged!

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