Emanuel leaping or being pushed?

The earlier report on Rahm Emanuel indicated that Barack Obama’s chief of staff wanted out of the White House because he has tired of dealing with ideologues.  Perhaps some of those ideologues have begun pushing more than Rahm has begun leaping.  Raw Story reports today that a proposal to scale back cap-and-trade legislation to only utility companies, the kind of compromise that Emanuel would likely either author or champion, will benefit one of Emanuel’s former employers in Chicago:

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Rahm Emanuel, chief of staff to President Barack Obama, said in little-noticed remarks Friday that his administration will consider a climate change bill that only includes carbon caps on electric utilities.

“The idea of a ‘utilities only’ [approach] will also be welcomed,” he said, while “a wide range of ideas will be discussed.”

The proposal would be a boon to the oil and steel industries, as well as US manufacturers, who have argued that capping their carbon emissions would reduce their competitiveness overseas. President Obama has taken heat from liberals after a primetime speech on the BP oil spill failed to include aggressive proposals for climate change laws.

They won’t be the only beneficiaries, either.  Forbes reported on Friday that passage of the scaled-down bill could add 30% to the share value of nuclear-energy producer Exelon — and Exelon has some friends in high places:

A watered-down, utilities-only climate change bill would greatly leverage the profitability of US nuclear power generator Exelon, an Illinois-based company that provides the largest share of power from nuclear reactors of any company in the United States. Exelon operates six active nuclear reactors in Obama’s home state.

Prior to joining the Obama Administration, Emanuel actually helped create Exelon by advising on the merger of two companies that merged. Exelon also employed senior White House adviser David Axelrod as a consultant.

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The connection here is pretty tenuous.  Raw Story doesn’t say whether Emanuel has any continuing interest in Exelon.  Nor does it mention whether Exelon would have benefited in a similar manner from the passage of cap-and-trade as it exists today, which it probably would, although that passage is almost certainly impossible now.  Nuclear producers will definitely see benefits from higher fees and taxes on electricity production based on coal, as those producers look for alternate sources of mass production, assuming that the legislation removes hurdles from building and operating nuclear facilities.

What’s more interesting is the timing and direction of this new revelation.  The leak to the Telegraph could have come from Emanuel or from his opponents in the White House, as the ideologues may be wanting to blame Emanuel on the perceived slow pace of Hopeandchange on the Left.  More likely, though, it came from Emanuel or his sympathizers who want to make his unhappiness with the direction of this White House, or lack thereof.  This blast, however, obviously comes from people unsympathetic to Emanuel and perhaps specifically because of his resistance to the ideological march of the rest of the Obama administration.

Addendum: A utilities-only approach may let some industries off the hook for direct costs of cap-and-trade, but it’s still no bargain.  They need to use massive amounts of energy for producing steel and making other products, and transporting them to market.  Embedding the taxes and penalties of cap-and-trade even in just the utilities costs in the US will drive prices higher, erode buying power for consumers, and make us less competitive overseas.  The utilities-only approach still hammers families regardless of whether their employer gets a small reprieve or not.

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David Strom 12:30 PM | April 23, 2024
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