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WASHINGTON — Indianapolis-based Earth-Solar Technologies Corp. has enjoyed a steady increase in interest in its solar energy systems since starting up two years ago.
And business will only get better if Congress passes the Obama administration’s plan to curb global warming by making it more expensive to emit greenhouse gases.
“It’s inevitable that the world is going to shift to renewable energy,” said Keni Washington, managing director of the company, which employs 20 people and hopes to hire hundreds more as business expands.
But while Indiana companies that tap into renewable energy sources or make energy efficient products stand to gain from the president’s cap-and-trade program, other employers — particularly the state’s many energy-intensive manufacturers — could find it more expensive to do business.
“Even a slight increase in operating costs related to energy costs could cause us to lose a contract with a customer,” Robert Clay, CEO of the auto parts maker Pridgeon & Clay, told a congressional committee Tuesday. The company has plants in Michigan and Indiana. “If our costs increase, we are vulnerable to competition from abroad.”
While President Barack Obama has argued that a shift from fossil fuels to cleaner energy sources would be a potential engine for economic growth, some Indiana lawmakers worry that Indiana has more to lose economically than to gain from the shift.
“It’s going to affect every ratepayer in the state,” said Sen. Evan Bayh, D-Ind. “It’s going to affect the economic vitality of Indiana. It’s vitally important that that issue be done right for Hoosiers.”
Bayh was one of eight Senate Democrats who joined a group of Republicans in opposing a fast-track procedural move that would’ve allowed the proposal to go through the Senate by a simple majority vote. Democrats, who are two seats short of the 60 votes needed to stop a filibuster, will now need Republican support to approve the plan.
Liberal advocacy groups say they’re stepping up the pressure on Bayh and other centrist Democrats to get with the program.
“Even if you oppose and you want to weaken or change or negotiate on cap and trade … that’s a very different thing than saying you will join with Republicans to prohibit the president from getting an up or down majority vote on his agenda,” said Robert Borosage, co-director of Campaign for America’s Future. “We think that’s going way too far and it’s adding to the obstruction that has kept us from making progress in a whole range of areas.”
Americans United for Change and MoveOn.org Political Action are running ads on radio, TV and the Internet urging Hoosiers to ask Bayh and other Indiana lawmakers to back Obama’s budget proposal, which includes the cap-and-trade plan.
If Washington does act to reduce the burning of fossil fuels, the main cause of global warming, Indiana would be hit harder than many other states. More than 90 percent of the power consumed in Indiana is generated by coal, which sends more heat-trapping carbon dioxide into the atmosphere for the amount of energy produced than any other energy source.
Indiana residents and businesses long have enjoyed some of the lowest electricity rates in the nation, about 20 percent lower than the national average. The low rates are one reason the state is the most manufacturing-dependent in the nation.
Environmental groups and others, however, contend that plenty of new jobs will come from shifting away from carbon-based energy.
A report done for the U.S. Conference of Mayors predicts that “green” jobs could provide as much as 10 percent of employment growth over the next 30 years. The report estimates there were nearly 9,000 green jobs in Indianapolis in 2006, and that could increase to more than 70,000 by 2038.
The Environmental Defense Fund, which identified 76 Indiana companies it says would benefit under a cap-and-trade system, argues that’s the only way to reward innovation and to drive demand for a new generation of technologies that will also add jobs.
But business groups say more jobs will be lost than gained.
The National Association of Manufacturers has estimated a cap-and-trade bill could cost Indiana thousands of jobs because of the cost of complying with the new standards and competition from other countries with lower energy costs.
The nonpartisan Congressional Budget Office estimated that cutting emissions 15 percent could cost the average household about $1,600. The biggest price increase would come in electricity, heating and cooling and other direct energy costs. But prices are expected to increase across the board because energy is used for almost all goods and services.
The Obama administration has proposed raising about $645 billion by auctioning off the right to emit a certain amount of carbon emissions into the atmosphere. Companies would have to buy more credits if they didn’t come up with ways to increase their energy efficiency and reduce their global warming pollution.
About $150 billion of the money raised from the auction would be invested in new technologies and the rest would be spent on tax cuts so consumers can adjust to higher prices.
Bayh said he’s concerned that Indiana wouldn’t get as much back as it would pay out.
“You’re essentially raising $645 billion in taxes from parts of the country that are carbon intensive and sharing it with the rest of the country,” Bayh said. “And I just don’t think that’s fair. We’ve got our challenges right now.”
Obama said the final program would have to take into account regional differences and protect consumers from huge spikes in electricity costs.
“Our point in the budget is let’s get started now,” Obama said. “We can’t wait.”
The National Association of Manufacturers has estimated a cap-and-trade bill could cost Indiana thousands of jobs because of the cost of complying with the new standards and competition from other countries with lower energy costs.
The nonpartisan Congressional Budget Office estimated that cutting emissions 15 percent could cost the average household about $1,600. The biggest price increase would come in electricity, heating and cooling and other direct energy costs. But prices are expected to increase across the board because energy is used for almost all goods and services.
The Obama administration has proposed raising about $645 billion by auctioning off the right to emit a certain amount of carbon emissions into the atmosphere. Companies would have to buy more credits if they didn’t come up with ways to increase their energy efficiency and reduce their global warming pollution.
About $150 billion of the money raised from the auction would be invested in new technologies and the rest would be spent on tax cuts so consumers can adjust to higher prices.
Bayh said he’s concerned that Indiana wouldn’t get as much back as it would pay out.
“You’re essentially raising $645 billion in taxes from parts of the country that are carbon intensive and sharing it with the rest of the country,” Bayh said. “And I just don’t think that’s fair. We’ve got our challenges right now.”
Obama said the final program would have to take into account regional differences and protect consumers from huge spikes in electricity costs.
“Our point in the budget is let’s get started now,” Obama said. “We can’t wait.”
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