Floor Remarks of Senator Bob Corker on the Climate Security Act, S 3036
June 3, 2008
Posted By Marc Morano – 6:43 PM ET – Marc_Morano@EPW.Senate.Gov
Floor Remarks of U.S. Senator Bob Corker
Mr. President, I rise to speak about the Lieberman-Warner climate act.
I want to say that I'm very excited to be here on the floor today, and I have tremendous respect for the sponsors of this bill and all those who have been involved for some time.
And I think everybody knows by this point, while there are numbers of arguments regarding the bill that's on the floor, I choose not to debate the science. I accept the fact that we as a country and we as a world need to address this issue.
I came here to the Senate to really focus on the big issues that our country has to deal with, and I saw this as one of those issues. And for that reason, a year ago I accompanied Senator Bingaman to Brussels, to Paris, and London. I sat down with carbon traders, with European Commission members. I met with cement manufacturers, utility providers and all those involved in this debate in Europe.
I also was fortunate enough to accompany the chairman, Senator Boxer, to Greenland to see the poster child of what this debate in some ways is about.
And ever since that time, I have been fixated on the goal of figuring out a way that we as a country can put in place policies that allow our GDP to grow so we can continue to ensure a better standard of living for those coming after us, having energy security as a country, and making sure that we have climate security all at the same time. That has been my goal. I've seen actually this debate that's taking place this summer right now as a tremendous opportunity for us to come together as a country and to focus on those things.
Some of the things that I saw in Europe were unintended consequences, things like fuel switching that took place. When people move from coal to natural gas and all of a sudden found themselves very dependent on an unfriendly government, Russia, to supply natural gas, and using that political clout over some of those countries that were so dependent.
And so I really have worked with Senator Warner and with others to try to craft legislation that I think works for our country. I see this as a tremendous opportunity. I really do.
A lot of people think that this is not a good time to be talking about climate change legislation. They say that because we have $4 gasoline at the pumps, this is a terrible time to be talking about legislation of this nature. I actually think this is a perfect time to be talking about it. I think there's a passion in our country exhibited by the chairman to address the issue of climate change. I think there are many people in our country that feel that same way. And I think that Americans throughout our country, seeing prices at the pump, feel very vulnerable as it relates to their own energy security and realize that we as a country need to have a comprehensive energy policy that we do not have today. And, so I see this tremendous opportunity for these two groups that have been at odds for so many years, actually generations, to actually come together and to do something that is good for our country, both from the standpoint of the environment, but also making sure that our country is energy secure.
I'm going to say something I know may not be that well received. But I think this bill, unfortunately – and with all the respect that I have for the sponsors – I think this bill, unfortunately, squanders that opportunity. The reason I say this bill squanders that opportunity is instead of addressing those two things I just mentioned in a pure fashion, instead we have resorted to the old-time politics of making sure we support various interest groups around our country and spread trillions of dollars around the country to try to win support for this bill, and I think that is a shame.
I plan to offer some amendments that I'll discuss at the right time, but let me make sure the American people understand what happens with cap-and-trade legislation. The fact is that what this bill contemplates is capping the amount of carbon emissions that our country emits and then reducing that cap over time from the year 2012 to 2050, and establishing a price for that carbon by creating an auction.
It's much like if Senator Domenici, and I, and Senator Warner decided we were going to create a company. So what we did was we allocated ourselves shares of that company. And then in order to make that company grow, we sold public shares out in the marketplace. Those public shares would generate income into our company and allow us to grow if that's what we wanted to do, but the day that we went public it would enrich us. Those allocations of shares that we allocated to ourselves would enrich us immediately because they become marketable securities.
Obviously, what this bill does is, number one, it takes in trillions of dollars into the Treasury beginning in the year 2012 through an auction process. In other words we sell carbon allowances on the public market. The very day that occurs the allowances – that are talked about as if they mean nothing – become marketable securities and they enrich all of those entities that receive those allocations. That's where I think this bill really misses the mark. The auction proceeds that come in in this bill – which by the way, let's be fair and I’m not I will not use words that are demagogic –but when we pass cap-and-trade legislation, we all understand it increases the costs of energy that is generated through fossil fuels. That's a fact. That's petroleum, that's diesel, that's coal, that's ethanol, all of those things that when they are consumed emit carbon, cost more on day one. So the American public is going to be paying for that. Everything that Americans buy, if this bill passes, that has something to do with energy will increase. When they go to the gasoline pump it will cost more. When they pay their utility bills at the end of the month it will cost more. When they buy food and clothing it will cost more.
What this bill unfortunately does is take in trillions of dollars –by the way, the EPA has modeled this based on a price of $22 per ton for carbon in the beginning. I want people to understand that in essence, today in London, carbon is selling for $41 a ton – but based on the modeling that is in place, this bill over the life of the bill, transfers wealth of $6.7 trillion by the modeling I just mentioned. If it were based on the prices of carbon today in London it might be as much as $13 trillion. Now we all know if this bill passes every American will pay more for energy and I understand that. By the way, I want everybody in this body to know that I am open to discussing cap-and-trade legislation that takes our country in the right direction.
What I am so opposed to and I am so saddened by the fact that this bill takes trillions into our Treasury and then – in much of it pre-prescribed, nondiscretionary spending – spends that money out from the year 2012 through the year 2050. We talk about earmarks in this body. This is, in fact, the mother of all earmarks, or to be neutral, the mother and father of all earmarks. This, in essence, creates an entitlement program from the year 2012 through the year 2050. I don't understand if proponents want to affect our climate why they don't take those trillions in and then immediately redistribute all of those dollars back to the American citizens. The reason is, and I'm sad to say this, the reason is this bill attempts to win support of the American people and interest groups throughout our country by the same old thing that's gotten our country in trouble today. That is, spreading this money around to various interest groups throughout our country and then pre-prescribing the spending in a way that I don't know of any bill that has done this since Medicare or Social Security. I don't know of a bill that has done this to this extent in modern times.
Let me just mention another piece that really goes unnoticed: the allocation process. This bill allocates out, to entities all across this country, carbon allowances. Those are marketable securities. It's the same as owning a share in IBM, and it’s a tremendous transference of wealth, and 27 % of the allocations in this bill go to entities that have nothing to do with emitting carbon. I have no idea why we would do that in legislation of this nature. I think it's reprehensible.
One of the reasons we see so many people walking the halls of our Senate offices in tailored suits carrying nice briefcases, is people that are in the know – and I know the senator mentioned – some of the companies realize this is a tremendous transference of wealth. And if they sit at the table and they have something to do with how these allowances are allocated, that might be better for them even than operating their companies well because we are creating a situation that transfers trillions of dollars of wealth.
I'm going to be offering some amendments, and I am disturbed that some of the sponsors have indicated that these are poison pill amendments. I have focused solely on the policies of this bill. I have never used demagogic language to describe this bill – never. I've never tried to debate the science. I'm trying to focus on the policies of this legislation.
The reason we have cap-and-trade legislation being discussed is the fact that we want to limit the amount of carbon emissions that come out of our country. So one of the other pieces of this bill that to me is just truly, truly offensive is this bill allows for something called international offsets which – and I'll be going into this in detail later on when I offer amendments – is something that encourages companies in our country to go through a loophole so that they don't have to pay the full price of carbon and can actually spend billions of dollars in countries like China where we already have tremendous, tremendous trade deficits. I absolutely have no understanding of why we would permit that kind of thing in a bill like this that is being designed to limit carbon emissions in our country. These international offsets have been documented to be fraudulent. We've had tremendous problems in working through the United Nations who administers the programs. I have no idea why international offsets, which have been so fraudulent and have nothing whatsoever to do with lowering emissions in our country, would be part of this bill.
So let me just say in general, I realize we're not going to pass a bill this year in all likelihood. I think that, in many ways, is regretful. I think we as a country right now today when the American people are feeling very vulnerable and right now we have many senators in this chamber that have such a passion as it relates to climate security, I think it's regretful that we cannot come together and as a part of this legislation add many of the components, for instance, that Pete Domenici from New Mexico has led us on, and really create a bill that doesn't just address climate, that also addresses our country's energy security. The American people are looking to us right now to act like adults. I have to tell you that for some period of time we have not owned up to our country's major problems. We have not done that. We have a tremendous opportunity in this body this week and next week to really address our country's environmental issues simultaneously with energy security. I think that's what the American people are looking to us to do.
I regret the fact that this bill, instead of being about climate security, instead of being about something that really drives our country toward using technologies that would cause our country to be energy secure, I regret the fact that this bill instead has ended up being about money. It has ended up setting up a command-and-control economy. Look at these various wedges on this pie chart. I could show many, many more. It is an amazing thing that from the year 2012 through the year 2050 over $1 trillion of this money is pre-prescribed. It's an amazing thing to me, that as it relates to technology, there is a five-person board that has been set up to decide where trillions of dollars will be spent.
I can't imagine this body approving legislation of this type. What I hope will occur is that the American people will become aware of what this debate is about. I hope that all of us will have a constructive debate in this body. And my goal and my hope is that we as a body will come together around climate change in an appropriate way and energy security in such a way so that the generations coming after us will have a better quality of life."