Carbon Pricing and Regulatory Uncertainty

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Bloomberg writes today about the months-long effort by utility companies to get Congress to pass a climate bill that includes a cap-and-trade component. Industry lobbyist Ralph Izzo is discouraged:

“I don’t know what more you can do,” Izzo said. “We are essentially volunteering to be the first to be regulated and people don’t want to do it.”

….“The odds are still very long,” said David Brown, senior Vice President for Federal Government Affairs at the Chicago- based utility Exelon Corp., who estimates he’s held hundreds of meetings with senators and staff on the issue. “Everybody’s just exhausted.”

Utility companies anticipate Congress will eventually pass legislation that mandates reductions in greenhouse gases and favors renewable sources of energy, rather than letting the U.S. Environmental Protection Agency decide how best to regulate.

Still, not knowing when Congress will step in makes planning investment difficult. “There’s a lot of capital sitting on the sidelines just waiting for more regulatory clarity,” said Lewis Hay, CEO of Juno-Beach, Florida-Based NextEra Energy Resources LLC.

Italics mine. Conservatives keep complaining that the recession isn’t really the fault of weak demand, it’s the fault of businesses holding back on investment because of uncertainty over new regulations. This is about 90% bogus, but to the extent it’s true, one solution is simply to pass regulations that make the investment picture clearer. A cap-and-trade bill would have done that. But now that it’s been killed, no one knows what will happen next. Regulations from the EPA based on the Clean Air Act? A carbon tax sometime in the future? Or what?

You want regulatory certainty? Pass a cap-and-trade bill. This makes it clear what the primary regulatory tool will be; it makes it mostly clear what the future price of carbon emissions will be; and those who want even more clarity can largely hedge away the remaining uncertainty in the futures market if they want to. But now, none of that can be done. And the planet will continue to heat up. And we run the risk of the EPA being forced to make things worse by applying a badly-constructed law to the problem. Nice work, conservatives.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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