In President Obama’s first big speech to Congress, just a month after he took office, he said: “I ask this Congress to send me legislation that places a market-based cap on carbon.”
They didn’t. Indeed, largely because of Obama’s own words on the campaign trail, it became clear that under his plan for a cap-and-trade system, “electricity rates would necessarily skyrocket” and that if “somebody wants to build a coal-powered plant, they can. It’s just that it will bankrupt them.”
These facts became well known and contributed directly to the smashing defeat of his proposed cap-and-trade legislation during his first term, when it barely squeaked the through the House and was dead-on-arrival in the Senate even though Nancy Pelosi and Harry Reid were running the places.
Yet this week, the president had his EPA issue the Clean Power Grab, a 1,560-page rule coercing states to adopt precisely the cap-and-trade policies he previously admitted required legislation from Congress. They did it with wildly creative lawyering to twist the Clean Air Act of 1970 into a global warming law.
Longtime liberal Congressman John Dingell said: “This is not what was intended by the Congress and by those of who wrote that legislation.… So we are beginning to look at a wonderfully complex world which has the potential for shutting down or slowing down virtually all industry and all economic activity and growth.”
The failed 2009 cap-and-trade bill called for a 20 percent reduction in greenhouse gas emissions over 11 years and 42 percent reduction over 21 years. The Clean Power Grab splits the difference, requiring a 32 percent reduction over 15 years. Otherwise it is nearly identical. The administration is simply acting as if the law they wanted passed.
If they succeed, it would mean steeply higher electric bills and major manufacturing job losses for what, according to conventional climate models, would avert less than 0.02 degrees Celsius of global warming by the year 2100.
Can they get away with it? There will certainly be litigation, and President Obama’s own Harvard law professor, liberal legal giant Laurence Tribe, has said of the Clean Power Grab: “Burning the Constitution should not become part of our national energy policy.”
But the recent history of a related rule, and the insidious structure of the Clean Power Grab, suggest that President Obama and the EPA may succeed even if they ultimately lose in court.
In June, the Supreme Court caught the EPA failing to even consider billions of dollars in costs, and struck down another expensive anti-coal rule. The EPA’s response was a smug press release saying the illegal rule had already accomplished its purpose: “EPA is disappointed that the Court did not uphold the rule, but this rule was issued more than three years ago, investments have been made and most plants are already well on their way to compliance.”
In those three years , the value of the country’s three largest publicly traded coal companies was crushed from $25 billion to just $1 billion. That’s 96 percent of the wealth of a vital American industry already wiped out.
The Clean Power Grab similarly seeks to lock itself in permanently, even if eventually found illegal, by coercing states to do most of the dirty work of enacting draconian caps on fossil fuel use into state law. Those laws would continue in effect after the EPA rule is struck down, and would create permanent rent-seeking corporate cronies who benefit from emissions trading and renewables mandates that would make the laws almost impossible to repeal.
All state leaders should protect their citizens from higher electricity prices and job losses by rejecting the Obama administration’s call to submit a state plan. And they should join the effort to defeat the Clean Power Grab in court, in Congress, and at the ballot box.
Phil Kerpen is president of American Commitment and a free-market policy analyst.