Tuesday, January 4, 2011

The New Congress is in Session with the GOP in Charge of the House - And Industry is Worried

Yes, you heard right.  With Republicans taking over control of the House of Representatives and gaining seats to increase their minority position in the Senate, it seems industry is more than a little worried about the outcome.  In short, industry likes regulatory certainty, even if it means more regulation.  Industry can plan and invest and make business decisions when they know what requirements they need to meet.  Uncertainty (ironically) is a big old wet blanket on innovation and investment.

So while industry isn't going to be out there begging for stronger regulations, they do see a quagmire of uncertainty as Republicans follow through on their promises to put their legislative efforts into oversight investigations rather than regulatory predictability. Areas of environmental regulation that could be in a state of unrest include climate change and TSCA reform.  With last year's attempt to pass cap-and-trade legislation effectively dead for at least the next two years, new House Energy and Commerce Chairman Fred Upton has said he will fight EPA rules regulating greenhouse gas emissions.  Fellow Republican John Shimkus, who lost his bid to chair the committee to Upton, has been assigned a key subcommittee chairmanship, from whence he has promised also to hold hearings on EPA's authority to regulate greenhouse gases.  On the TSCA reform side, what seemed like a clear path forward in the last Congress appears now to be in a state of confusion as to how, or if, legislation to reform the now 35 year old law can be accomplished.

All of this has industry very very worried.  There is a general feeling among industry leaders that attacking the EPA, which was started by a Republican President by executive order, could be going too far and would not only create a potential for backlash but effectively stymie industry attempts to rebuild their way out of the deep recession.  Many in industry actually very much want to see government incentives for innovative new technologies, including green technologies.  And that could be severely debilitating to the utility and other energy-intensive industries.

What industry most wants now is not some partisan gamesmanship from the GOP but rather some regulatory certainty, and for climate change and EPA's greenhouse gas emissions rules, industry acknowledges that some control of CO2 emissions is both an environmental necessity and offers a regulatory certainty that will allow them to innovate.  Without some sort of certainty, industry will continue to sit out the recovery while China and other countries continue to pass by us in development of new renewable technologies.

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