Wednesday, July 1, 2009

Big Government Capitalism: Green Energy

The Old Gray Lady reports on the making of Government sausage, Waxman-Markey edition, complete with economic botulism:

The bill was freighted with hundreds of pages of special-interest favors, even as environmentalists lamented that its greenhouse-gas reduction targets had been whittled down.

Some of the prizes were relatively small, like the $50 million hurricane research center for a freshman lawmaker from Florida.

Others were huge and threatened to undermine the environmental goals of the bill, like a series of compromises reached with rural and farm-state members that would funnel billions of dollars in payments to agriculture and forestry interests.

Automakers, steel companies, natural gas drillers, refiners, universities and real estate agents all got in on the fast-moving action.

The biggest concessions went to utilities, which wanted assurances that they could continue to operate and build coal-burning power plants without shouldering new costs. The utilities received not only tens of billions of dollars worth of free pollution permits, but also billions for work on technology to capture carbon-dioxide emissions from coal combustion to help meet future pollution targets.

...

The bill’s centerpiece is a cap-and-trade program that sets a ceiling on emissions of heat-trapping gases like carbon dioxide and allows polluting industries to trade emission permits or allowances to meet it. Mr. Obama said during the presidential campaign that all of those permits should be sold at auction, but the bill’s authors ended up giving away 85 percent free at the outset of the program, which won votes but that some environmental advocates said undercut the bill’s integrity.

Any guess as to the likely single biggest beneficiary of the bill? It looks to be General Electric. GE, who somehow managed to became a huge winner under the recent bank rescue legislation, has now secured promises for receiving FOR FREE so many of the carbon credits that they have started a new venture, Greenhouse Gas Services, to create a new profit center for the company. No wonder GE CEO Jeff Immelt recently wrote the following:

“The global economy, and capitalism, will be ‘reset’ in several important ways. The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner.”


And just in case the money from carbon credit trading weren't enough, I heard on the radio this morning that manufacturers who provide best in class energy efficient product will receive government payouts. Apparently:
From what I can make of the legislative gobbledygook on page 479 of the bill, it looks like the feds would pay the manufacturers of "Superefficient Best In Class Products" for each unit that they produce.
* $75 for each dishwasher
* $250 for each clothes washer
* $200 for each refrigerator or refrigerator-freezer
* $250 for each clothes dryer
* $200 for each cooking product
* $300 for each water heater

...

How much money are we talking here? Well, the entire section relating to super efficient appliances would get $600 million for FY 2011, 2012 and 2013 - and then "such sums" as may be necessary in the future.

The bill specifically says that "no less" than 40% of the money in those first three years shall be for "Premium Awards for Development and Production of Superefficient Best-in-Class Products."

And who leads in the development and manufacturing for all of these devices?

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