Illinois Chamber Doesn’t Understand It’s Own Arguments

The Illinois Chamber of Commerce is taking Obama to task for being against the Clear Skies Bill

s Senator Obama Seeing Purple?

Protecting Our Environment, While Balancing our Energy Needs

Last year, candidate Barack Obama gave what will long be remembered as one
of the great convention speeches. ?He spoke passionately about the need to
remove labels like “red” and “blue” states. ?He challenged all of us to build and
work toward consensus solutions to the public policy questions that face us as a
nation. ?In essence, he argued that seeking common ground means seeing
purple. ?

An important question in search of a “purple solution” is how do we achieve
higher air quality standards, without adversely impacting the price of electricity
and the economy? ?Regardless of political party, everyone wants to breathe
cleaner air and have affordable electricity powering a growing economy. ?These
two goals aren’t mutually exclusive and President Bush’s Clear Skies Initiative is
that “purple solution.” ?

This year, Senator Obama has a pivotal vote on Clear Skies legislation when it
comes before the Senate Committee on Environment and Public Works.

America’s air has become markedly cleaner in the 35 years since the Clean Air
Act was passed in 1970. We will continue to do more to improve air quality;
however, we need to consider the most efficient and productive way to achieve
the desired result. ?Existing law is now a tangle of overlapping and sometimes
conflicting regulations that fail to provide consistency, clarity or certainty. This
inefficient process makes achieving cleaner air more complicated and costlier
than ever, delaying improvements in air quality, and costing Illinois valuable jobs.

Clear Skies provides a more reasonable approach. It requires significant
emissions reductions from power plants. Specifically, three air pollutants ? sulfur
dioxide, nitrogen oxide and mercury ? will be reduced 70 percent from 2002
levels by 2018, or sooner.

Power plants across the country will have to spend billions of dollars to comply. ?
However, Clear Skies will put in place a coordinated, national plan to
simultaneously reduce these three air pollutants instead of separate, overlapping
measures to address each pollutant. This plan will be far more efficient and far
less expensive than disparate regulations that will have to be implemented
piecemeal by each state and each power company.

Clear Skies will lock in dramatic emission reductions today and provide power
companies with a clear timeline and greater flexibility in determining how to
coordinate the unprecedented capital investments necessary to meet these
emission caps. Utilities will be able to focus resources on multi-pollutant control
technologies and strategies that will achieve these major emission reductions at
the lowest possible cost.

Clear Skies also will ensure that coal, an important abundant resource and
economic driver in Southern Illinois, will continue to play a cleaner role in future
electricity generation.

Clear Skies isn’t one-sided. ?It will not be inexpensive, nor will it be easy to
implement. In fact, achievement of the nationwide reductions called for in Clear
Skies will require the largest single industry investment in air pollution controls in
the history of our country. ?While Clear Skies might not offer everything to those
who argue for even more immediate stringent air quality standards, the
legislation can’t be dismissed as having trivial impact on air quality. ?It is a
compromise, which it must be for passage. The advantages of Clear Skies’
sensible approach ? clean air, achievable deadlines, and at an affordable cost ?
seem like a very “purple policy.”

This is a perfect opportunity for Senator Obama to demonstrate that as an office
holder he intends to use his influence to promote compromise and find political
value in the constructive progress that may be achieved in pursuing the color
purple.

By Douglas L. Whitley
President &?CEO
Illinois State Chamber of Commerce
312-983-7100

Contact:
Margaret Kearney
312-251-9913

Readers here should be able to identify the problems, but I’ll recap:

====An important question in search of a “purple solution” is how do we achieve higher air quality standards, without adversely impacting the price of electricity and the economy?

The misrepresentation above implies that this bill will improve air quality at the same rate as other solutions including the current CAA and can do it at a better price.

I, unlike many environmentalists, prefer market incentives to achieve the same goal–a level of air that is healthy. In this case, you should set the standard of air quality you expect to get to and then choose the most efficient way to get there. What the administration and the Illinois Chamber is promoting is a poorly designed market system that has lower air quality goals than current law would produce. That’s a far different thing than saying we get the same rate of air quality improvement cheaper.

===Clear Skies also will ensure that coal, an important abundant resource and
economic driver in Southern Illinois, will continue to play a cleaner role in future
electricity generation.

Except this isn’t true. The Administration claims two things.

1) The bill will make reaching air quality goals cheaper by reducing costs through market incentives. This relies on the assumption that there may be more efficient systems other than Best Available Technology or MACT Most Achievable Control Technology. I think rightly, there are many times you can get to the same level of environmental protection cheaper than a one-size fits all solution by allowing relatively simple low technology answers to emissions.

2) The bill will promote the use of Southern Illinois coal. The specific wording above is cheeky because it doesn’t explicitly say Southern Illinois coal will do better. Southern Illinois coal is high sulfur and to be burnt requires expensive initial investment in scrubbers and/or Selective Catalytic Reducation.

Under a permit system, unless it forces extremely low emissions (and Clear SKies doesn’t–see below), expensive capital investments are discouraged in favor of low tech and inexpensive changes that reduce emissions the cheapest way possible. Given Southern Illinois coal requires significant capital investment to burn, it’s likely to be disadvantaged under such a system.

There is no point to a permit system if the caps are so low they force the adoption of specific solutions to a emssion problem. At that point a BAT solution is just as cheap and may even be better in terms of providing faster economies of scale for the technology.

You can’t reasonably argue that the implementation will be cheaper and the best technology available will be utilized. It’s logically inconsistent as to why one adopts a tradeable permit system.

My personal views tend towards not worrying about sustaining industries in areas like Southern Illinois that in the long term are probably unsustainable anyway and concentrating on reaching the lowest cost to the environmental standard we choose to reach, but I’m not an Illinois politician facing a lot of workers who feel their jobs are in jeopardy. Given the twin objectives of reducing pollution and maintaining Southern Illinois coal jobs, a command and control policy as is currently in place for power plants makes a lot more sense.

There is one thing that could eventually change the calculation–inclusion of carbon as a regulated pollutant could eventually lead to the adoption of Southern Illinois coal because it is more efficient. But that would come in a trade-off where the carbon emissions make low sulfur, less efficient coal more expensive to burn because of the costs of increased carbon emissions over Southern Illinois coal*.

*The more technical minded know this is a gross oversimplification given carbon production depends upon fuel burnt and so barring all other factors the same engergy created by btu of coal is the same amount of carbon, but to make it simple here, all things are not equal.