U.S. climate change bill, radically bad law: John Kemp

-- John Kemp is a Reuters columnist. The views expressed are his own --

By John Kemp

LONDON (Reuters) - The American Clean Energy and Security Act (HR 2454) that cleared its first hurdle last week when it was approved by the Energy and Commerce Committee of the House of Representatives is a radically bad piece of legislation.

But ironically the bill's many flaws are precisely what make it more likely to be approved.

Its arcane complexity and cartload of concessions to special interests is testament to the continuing and baleful influence of Washington lobbying firms. It typifies everything advocates of good government decry about the policy process.

In backroom negotiations, an unholy alliance of environmental groups, energy companies, Wall Street firms and regulators has been forged that will create a massive and arbitrary program to reward favored interests at the expense of the consumer and the taxpayer.

The result is a complex cap-and-trade system for reducing greenhouse gas emissions which legislators almost certainly do not understand and which will have unpredictable effects. Costs and benefits will be distributed unevenly to reward firms with the best connections and highest-paid lobbyists.

But there is enough complexity to hide its likely cost, and the authors have probably given away enough concessions to buy the votes they need to assemble a 60-vote super-majority in the Senate. As a result, the cap-and-trade system set out in HR 2454, or something like it, has a fair chance of being enacted into law later this year or in 2010.

A QUESTION OF ALLOCATION