Economy in the Front - Carbon Caps in the Back

Mar 5, 2010

Two from the Wall Street Journal. First from the homepage:

President Barack Obama's energy strategy came under attack on at least three fronts Thursday, highlighting the conflict that has hobbled one of the administration's top domestic priorities. On Thursday, big utility operators and some state officials blasted the administration's formal announcement that it would drop plans for a federal nuclear-waste vault beneath Yucca Mountain, Nev...On Capitol Hill, a group of Democratic lawmakers introduced legislation to block the administration from using the Clean Air Act to regulate carbon-dioxide emissions. Meanwhile, Democratic lawmakers urged the administration not to use federal stimulus dollars to help finance a wind-energy project that involves a Chinese maker of wind turbines

...The Energy Department's move to formally drop its application for the Yucca Mountain waste site could hobble efforts to build more nuclear power plants—a strategy the Obama administration has promoted as a way to reduce U.S. greenhouse-gas emissions...Also Thursday, the White House strategy to use the Environmental Protection Agency to regulate emissions of greenhouse gases came under attack from Democratic lawmakers from coal states...The agency has come under pressure over plans to eventually regulate greenhouse-gas emissions from large industrial facilities, such as power plants. "I am dead-set against the EPA's plowing ahead on its own with new regulations to limit greenhouse-gas emissions from coal-fired power plants," Mr. Rahall said.

Then on to Kim Strassel's Potomac Watch:

Most of the climate debate focuses on Washington. This misses a more clever and committed force—environmental groups that impose their agenda on companies via pressure, legal threat and sympathetic regulators. A textbook example has been quietly unfolding in the insurance sector. The question is whether governors will stand by to let green activists effectively regulate their businesses.

Enter the National Association of Insurance Commissioners, the professional body for state regulators. Unlike, say, the National Governors Association, NAIC has a quasi-regulatory role. Insurance is complex, and the association develops model bills for state legislatures to vote on. This has at times been beneficial, but NAIC'S structure also means activist commissioners can drive its agenda. No surprise then when several commissioners—with the prodding of outside green groups—several years ago dragged NAIC into the climate debate. It began innocently enough, with a task force charged with producing a "white paper."  Yet under the direction of members such as Wisconsin Insurance Commissioner Sean Dilweg and Pennsylvania Commissioner Joel Ario—both climate crusaders—the task force turned itself into a national climate regulator. In particular, in unveiled its "Climate Risk Disclosure Survey," a document insurers must complete and make public. This survey was not put forward for legislative approval, but rather presented as something state commissioners must issue unilaterally.

...The survey—already issued in some states—flows from the tenuous position that climate change poses grave risks to business. As such it is designed to coerce insurers to adopt and require climate policies, or risk financial and legal fallout. It's also crafted to pressure insurers to shift their sizable investment portfolios away from, say, Exxon, and into the sort of "socially responsible" investments ballyhooed by Ceres. Companies that refuse will be prime targets for trial lawyers who claim they have failed to protect investors. It is, in effect, regulation via public and legal pressure.

...Activists groups have meanwhile sought to further spin this victory. Ceres went to Washington last year and made the argument to new Obama Securities and Exchange Commissioner Mary Schapiro that if even state insurance regulators were willing to act, surely so must the SEC? In January the agency issued new regulation requiring publicly listed companies to disclose their "climate risks" to investors. Thus does an unaccountable political body, advised by unaccountable green groups, fundamentally rewrite the rules of business. Many state governors and politicians remain in the dark about this back door power grab. If they want a say in how their states enforce climate policy on the business community, they might want to intervene soon.

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