Will Congress' New Enviro Legislation Sell Us Out to the Coal Industry?

I have a close friend whose family—long before it was deflated by the Great Depression—once had significant wealth derived from a coal-related business. 

Several generations of the family read a dog-eared book reverentially titled "The Story of Coal."  And the family used to take pride that it once owned, among other things, a racehorse, a boxer and a congressman.

Yes, the Gilded Age was a heady time if you were a coal baron.  Tycoons like Henry Clay Frick (when he wasn't hiring Pinkertons to shoot down striking workers) luxuriated at mansions, enjoyed lavish European vacations—even had their own song.

Coal interests obviously wielded enormous political clout in an era when a miner's only friend was a canary. But does the coal industry still have that kind of influence? More specifically, will we have to buy off coal interests in order to enact even a moderately effective plan to tackle global warming?

That's a key question raised by bipartisan legislation introduced last week by Senators Jeff Bingaman, D-N.M., and Arlen Specter, R-Pa. The bill would create a mandatory economy-wide program to reduce greenhouse gas emissions.  It would do this by capping heat-trapping emissions and permitting industry to buy and sell emission credits.

Although the bill falls short of visionary plans introduced by Senator Bernie Sanders, I-Vt., and Rep. Henry Waxman, D-Calif., it is certainly a creative tour de force: it gives out free credits to agriculture (that's what apparently lured Senator Tom Harkin, D-Iowa, to co-sponsor it) and promises to steer revenue to the state of Alaska. (That brought co-sponsorship from Alaska Republican senators Ted Stevens and Lisa Murkowski, neither of whom had backed a mandatory carbon control bill before.)

But perhaps the most creative aspects of the legislation involve direct overtures to the coal industry and power companies that burn coal.  It would do this through a variety of financial incentives, including giving free pollution credits to coal-burning power companies based on past pollution levels. It would also throw in a bonus—free credits to coal mines. 

These credits amount to giving the companies big money. As we noted in a report last month, coal-burning power companies could reap billions of dollars under this sort of approach, which would favor them at the expense of taxpayers.

Not surprisingly, some of the nation's biggest global warmers—including American Electric Power (No. 1) and Duke Energy (No. 3)—promptly declared their support for the Bingaman-Specter plan, which also includes an environmentalist-criticized "safety valve" feature, which would allow a company to avoid making an emission reductions if the cost exceeds a certain amount. 

Duke's glib chairman, president and CEO James Rogers, who is bidding to become the P.T. Barnum of the power industry, contended the bill could become a "bridge" to a low-carbon future (though Rogers recently noted to Wall Street analysts that Duke is forging ahead with plans to build a large, old-fashioned coal-burning power plant in North Carolina.) 

Bingaman's biggest coup was attracting the endorsement of labor groups, led by the United Mine Workers of America and the AFL-CIO.  The mine workers were drawn in by some desirable incentives aimed at spurring use of advanced, lower-carbon coal.

Momentum for action on global warming does seem to be building. Just this week, the Business Roundtable, the CEOs of the nation's biggest companies (including ExxonMobil, Southern Company and Peabody Coal) joined the chorus calling for legislation, though they stopped short of endorsing a specific plan.

Bingaman and his allies have been candid that their goal is to find a political middle ground that can actually be enacted, rather than seeking some utopian solution to global warming that could keep the issue tied up in Congress for years to come.