Cap & Trade: Metal Industries Very Divided on Legislation

by on
Style:
Category:
Green

Last week, the House passed a cap and trade bill with a vote of 219 for it and 212 against it. The bill will next go to the Senate where Senator Barbara Boxer (D-CA) hopes to introduce and vote on a bill before the August recess. But a controversial provision in the bill will likely spark huge debate both within the Senate and for President Obama in terms of whether or not he will support the bill with the provision intact. The provision calls for tariffs on all goods imported from countries that don’t have a similar carbon emissions restriction. The provision would affect many countries’ goods but would certainly take aim at Chinese and Indian origin materials. Democrats added that provision to ensure US industries do not have to face unfair competition abroad.

Who supports cap and trade and who opposes it? In the broadest terms, several organizations have taken positions against cap and trade. These include the National Federation of Independent Businesses and the National Association of Wholesaler-Distributors. The NAW’s membership comprises a broad range of other industry trade associations as opposed to specific companies. The trade associations relevant to the metals industry include: American Machine Tool Distributors Association, Copper and Brass Service Center Association, National Fastener Distributors Association, Petroleum Equipment Institute, Metals Service Center Institute among many others. Both organizations have prioritized Cap & Trade legislation as key vote, according to Roll Call. This means, both associations will grade various legislators based on their specific votes for this legislation. Grades help determine how PAC monies are allocated and which Congressmen/Congresswomen receive support from the trade association.

Other groups also have come out publicly against Cap and Trade. These include the US Chamber of Commerce and the National Association of Manufacturers (NAM). The National Mining Association has also come out against the bill according to Roll Call yet Rio Tinto is a member of USCAP (The United States Climate Action Partnership) that supports the legislation.

From a company perspective, many of the big US steel mills and even the mini-mills (who have less to lose by the proposed legislation since they emit less carbon) have all come out opposing the bill. These firms include: US Steel, AK Steel, Arcelor Mittal and Nucor.

Supporters of the legislation appear more heavily skewed toward power companies (who will receive 60% of the pollution permits for free) and non-profit organizations. Here is a breakdown of members of USCAP, in support of legislation:

Source: USCAP Website and MetalMiner

What can we conclude? If cap and trade becomes reality, large manufacturers have hedged their bets and have taken positions in support of legislation likely in exchange for helping shape the details as to how caps and pollution permits will be allocated. That’s probably a good strategy.
Cap and trade, if passed, will have serious ramifications for our economy. Check out our earlier posts on the subject:

  1. Will Cap and Trade Cost American Jobs?
  2. Carbon Cap and Trade: Impact on Metal Buyers
  3. Carbon Cap and Trade: Impact on Metal Buyers Part Two

–Lisa Reisman

Leave a Comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.