GOP and Industry Cave on Kyoto

I'm inspired to try going 2 for 2 with Latte Sipper (see his comment).

Those who choose to look can see that the government coercion enabling E85 is on the verge of being applied to another "problem:" DAWG.

Kimberly Strassel writes today in WSJ's 'Potomac Watch' Why our CEOs are warming to Kyoto.

Democrats want to flog the global warming theme through 2008 and they'll take what help they can get, even if it means cozying up to executives whose goal is to enrich their firms. Right now, the corporate giants calling for a mandatory carbon cap serve too useful a political purpose for anyone to delve into their baser motives.

[...]

There was a time when the financial press understood that companies exist to make money. And it happens that the cap-and-trade climate program these 10 jolly green giants are now calling for is a regulatory device designed to financially reward companies that reduce CO2 emissions, and punish those that don't.

Four of the affiliates--Duke, PG&E, FPL and PNM Resources--are utilities that have made big bets on wind, hydroelectric and nuclear power. So a Kyoto program would reward them for simply enacting their business plan, and simultaneously sock it to their competitors. Duke also owns Cinergy, which relies heavily on dirty, CO2-emitting coal plants. But Cinergy will soon have to replace those plants with cleaner equipment. Under a Kyoto, it'll get paid for its trouble.

DuPont has been plunging into biofuels, the use of which would soar under a cap. Somebody has to cobble together all these complex trading deals, so say hello to Lehman Brothers. Caterpillar has invested heavily in new engines that generate "clean energy." British Petroleum is mostly doing public penance for its dirty oil habit, but also gets a plug for its own biofuels venture.

Finally, there's General Electric, whose CEO Jeffrey Immelt these days spends as much time in Washington as Connecticut. GE makes all the solar equipment and wind turbines (at $2 million a pop) that utilities would have to buy under a climate regime. GE's revenue from environmental products long ago passed the $10 billion mark, and it doesn't take much "ecomagination" to see why Mr. Immelt is leading the pack of climate profiteers.

But here's where I'll probably lose Latte:

But read the fine print. The new vaunted committee will have no legislative authority, but exists solely to hold hearings and to "communicate with the American people." Ms. Pelosi and Harry Reid want to talk about this issue . . . and talk, and talk and talk. But not necessarily anything more.

That's because Democrats want global warming as an issue through 2008. With Al Gore getting his Oscar nod, they've got a "problem" that captures the public imagination, as well as an endless supply of cash from thrilled environmental groups. No need to spoil it with a solution.

Not long ago there was a large, well-known American corporation that profited by trading on the rise and fall of energy markets as they were artificially driven by government mandates which they had lobbied for. It was called Enron.

Economics and Markets Posted by JohnGalt at January 26, 2007 12:29 PM