A bad bill at a bad time is the growing consensus against the Waxman-Markey climate change bill. Now, the Air Transport Association of America (ATA) which noted that it puts an “onerous tax” on aviation at a time when it can least afford it, said contradictions in just passed House legislation make it confusing. ATA noted language in the bill recognizes aviation’s unique contribution to the global economy and calls for continued effort to establish an emissions reduction plan through the International Civil Aviation Organization.

Meanwhile, Americans support for a cap-and-trade system is declining according to a Washington Post poll that indicated while the vast majority favor legislation to reduce emissions, the percentage opposed to cap-and-trade has risen from 42% in July 2008 to 52% recently.

The 1,300-page bill’s goal is to reduce greenhouse gases (GHGs) 17% below 2005 levels by 2020 and by 83% by 2050. It provides for the majority of permits to be given away, a 2012 effective date and an estimated price of $13 per on of CO2. However, press reportes indicate that one of the few segments for which permits will not be given away is transportation. While the cost per ton is expected to increase over time, the bill does include provisions preventing deep swings in a given year. Recently, the Congressional Budget Office estimated that the annual energy cost increase per household would be about $175 by 2020.

“The nation's airlines have an impressive environmental record and are committed to working with the administration to address climate change, but we have strong concerns about the Waxman-Markey bill and its punitive one-size-fits-all approach," said ATA President and CEO James C. May. "This cap-and-trade bill creates an onerous fuel tax on the airline industry. Fuel costs will skyrocket, hindering the ability of U.S. airlines to continue to improve their environmental performance through fleet modernization and technological advances, weakening their ability to compete in the global markets."

ATA cited provisions within the bill that passed last week concerning the proper venue for imposing emissions restrictions. "These conflicting views in the Waxman-Markey legislation indicate clearly that, at least as to aviation, far more work needs to be done to construct the right approach to dealing with climate change. What we have now just does not make sense."

ATA’s statement cited language offered by Congressman Rick Larsen which made it into the bill. Stating the U.S. should:
• Continue to actively promote, within the International Civil Aviation Organization, the development of a global framework for the regulation of greenhouse gas emissions from civil aircraft that recognizes the uniquely international nature of the industry and treats commercial aviation industries in all countries fairly; and
• Work with foreign governments towards a global agreement that reconciles foreign carbon emissions reduction programs to minimize duplicative requirements and avoids unnecessary complication for the aviation industry, while still achieving the environmental goals.

In addition to opposition by ATA, the U.S. Chamber of Commerce and the National Association of Manufacturers also opposed the bill which passed 219 to 212. However, some giant corporations such as Dow Chemical and Ford support the bill. The battle now moves to the Senate.
The bill's complexity assures its impact on the economy is completely unknown. Two things are clear, there will be a new line item in corporate financial reports covering the cost of carbon permits and costs will rise of everything.

"I don't think we've ever seen anything of this magnitude before, . . . and I don't know that any other country has either," Kenneth Green, an energy expert at the American Enterprise Institute told the Denver Post. "This is a huge reorganization of the entire energy economy." The Post also quoted
Bryan Migone, an energy expert at the Brookings Institution that without free permits, the cost of transportation will rise faster including an increase the price of gasoline 20 to 30 cents per gallon in the near term, more in the long term.

Wall Street Analyses
Analysts are weighing in on what Waxman-Markey could mean for companies and investors. Mostly bad things, it turns out.
Cap-and-Trade Plan: Climate Change Reactions
Why Waxman - Markey Bill Is Bad for U.S. Consumer, Energy Industry
US oil production would cease

Short Take
AirPlus Survey on Travel Alternatives
An AirPlus report found that teleconferencing and web-conferencing are increasingly being used as alternatives at 81% and 71%, respectively. AirPlus International, a global provider of corporate travel payment solutions, when on to say that over half did agree that virtual meetings are as effective as meeting in person, it is interesting that 25% believed that it is rarely or almost never as effective.

Respondents cited increasing travel costs and decreasing budgets were cited for the renewed interest in teleconferencing. The report is based on a survey of 192 travel management professionals in North America and Europe in April 2009.