Archive for the ‘Consumer Protection’ Category

On Monday we submitted our comments to the EPA on its draft Clean Power Plan. Roughly two million people told the EPA they support the plan, which aims to cut carbon emissions from power plants 30 percent by 2030 from 2005 levels. We strongly support the plan, and we think the agency should make it much stronger and even more consumer friendly. Contrary to the conventional wisdom, we can advance those two goals at the same time. Fighting climate change is good for consumers. Fighting it more aggressively—with a focus on low-cost solutions—is even better. The short  version of our recommendations is that the Clean Power Plan should use much more energy efficiency and renewables, much less natural gas (if any), and likely no nuclear power.

We care about climate change because it will be devastating to consumers—to all Americans, that is—and especially  to the poor, the elderly, and other vulnerable populations. We also care about protecting consumer budgets—again particularly those of low-income households. Consumers usually pay for upgrades or other changes in electricity infrastructure on their utility bills, and for this reason opponents of climate change policy have been arguing that the Clean Power Plan will hurt consumers. Cutting carbon emissions will cost money, they argue, straining household budgets.

We found the opposite. The strongest tools to reduce carbon emissions from power plants are actually the least expensive and the most beneficial to consumers. If the EPA were to craft the rule using a simple organizing principle—cut carbon incrementally by using the lowest-cost strategy to displace the most carbon-intensive electricity generation—the rule would be much stronger and less expensive. Here are the key points:

  • Treat efficiency and renewables as replacing fossil-fuels, in order of the most carbon intensive. The proposal assumes that new natural gas generation will replace coal. But it treats energy efficiency and renewables as merely adding to the pool of available power rather than displacing coal or natural gas. That doesn’t make sense. The point of boosting efficiency and renewables is to displace fossil fuels—and in fact that’s what usually happens in the market because fossil-fuel generation usually has higher operating costs. This simple common sense change would strengthen the rule a great deal.
  • Strengthen the efficiency targets significantly. Energy efficiency is by far the lowest-cost way to cut carbon emissions, but the EPA overestimates its cost by 60 to 100 percent. It also sets its targets too low. The agency expects us to increase efficiency by just 1.5 percent annually even though the best states are already pursuing gains of 2 percent or more. And it considers only utility efficiency programs like weatherization of homes, leaving out things like 1building codes and appliance standards. Boost the efficiency targets, and you get a much more powerful, less expensive rule.
  • Strengthen the renewables targets significantly. As UCS has demonstrated, the EPA makes similar mistakes with renewables. States can add nearly double the amount of renewables that the proposal projects, at much lower cost.
  • Curb the use of natural gas. The plan’s reliance on natural gas is misplaced for multiple reasons. First, because of methane emissions, switching from coal to natural gas may not have any climate benefit for more than 100 years. We need to fix the problem well before then. Second, the proposal’s reliance on natural gas will lead to more environmentally hazardous fracking, which the EPA should not be encouraging, and put additional pressure on natural gas prices, which are already projected to rise 23 percent by 2030, straining household budgets. Finally, the EPA underestimates the cost of using natural gas to replace coal because it overlooks that we need to phase out natural gas soon too. Natural gas emits less carbon than coal, but still very significant amounts, and we need to reduce carbon emissions to zero as quickly as possible. The real cost of switching to natural gas is the cost of the current change plus the expense of moving to renewables in a few years. We would save a lot of money by going straight to renewables.
  • Curb (likely eliminate) the use of nuclear power. Nuclear power is usually an exorbitant boondoggle that consumers get stuck subsidizing through their electricity bills. The EPA’s proposal gets the cost of nuclear power wrong in nearly every way. It underestimates the costs of subsidizing existing nuclear plants that can’t make money. It omits the multi-billion-dollar cost of completing nuclear generators currently under-construction. (These projects nearly always run way behind schedule and cost billions more than budgeted; we would save a lot of money by scrapping them even mid-construction.) It also fails to account for the cost of storing nuclear waste, a problem we still haven’t solved but which will cost billions, and ignores the possibility of catastrophic accidents. As of late 2012, Tokyo Electric Power Co. was estimating that the cleanup from the Fukushima disaster would cost up to $137 billion. It’s hard to find space for nuclear power in sound climate policy when every other option is cheaper and efficiency and renewables can accomplish so much.

The Clean Power Plan already represents a significant step in fighting climate change, and it will make consumers far better off. For those reasons, we told the EPA that we strongly support the plan. But we need to do better—and we can.

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Most of us use Google products on a daily basis and are familiar with the company’s powerful email and Internet search services. But these days, there is a lot more to Google’s technological operations — and they come with myriad new ways to collect our information. Now the company that used Street View cars to collect unsuspecting people’s information, and received the Federal Trade Commission’s largest civil penalty ever for misleadingly tracking Safari users, is reaching new levels of political power.

A new Public Citizen report, “Mission Creep-y,” explores Google’s accruing power, both in terms of personal data collection, and federal and state government influence, raising the question of whether it could become too powerful to be held accountable.

Key findings about Google’s growing political power:

  • Over the first three quarters of 2014, Google ranked first among all corporations in lobbying spending, according to OpenSecrets.org, and is on pace to spend $18.2 million on federal lobbying this year. In fact, it has spent $1 million more on lobbying than PhRMA, the powerful trade association of the pharmaceutical industry.
  • Since 2012, no company has spent more money on federal lobbying than Google.
  • Of 102 lobbyists the company has hired or retained in 2014, 81 previously held government jobs. Meanwhile, a steady stream of Google employees has been appointed to high-ranking government jobs – an indication of the company’s growing influence in national affairs.
  • Google’s political action committee (PAC) spent $1.61 million this year, according to Federal Election Commission records. That surpasses, for the first time, PAC expenditures by Wall Street bank Goldman Sachs.
  • Google funds about 140 trade associations and other nonprofits across the ideological spectrum – including some working in issue areas relevant to Google’s practices on privacy, political spending, antitrust and more.

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It’s been a big week for climate change. Here’s a roundup of the news in case you’ve had trouble keeping up:

Yesterday, UN Secretary General Ban Ki-moon hosted a UN Summit on climate change in New York, convening leaders in government, business, finance and civil society to “galvanize and catalyze climate action.” The idea was that world leaders would announce major new initiatives. To some extent it was a success, although it didn’t prompt major announcements from the U.S. or China, the 800-pound carbon emitters in the room.

President Barack Obama spoke at the summit, urging aggressive action, particularly from China. He announced an executive order requiring federal agencies to “factor climate resilience” into foreign aid and development decisions. Regarding major actions on climate change, he simply referred to the EPA’s proposed rule to curb carbon emissions 30 percent from 2005 levels by 2030, which Public Citizen strongly supports and seeks to strengthen. He also noted that the U.S. is on target to meet its pledge to cut emissions 17 percent from 2005 levels by 2020. For its part, China said it would try to peak its carbon emissions “as early as possible.”

Just last week, the U.S. made two other announcements:

  • The Department of Energy proposed a rule that would require hotels to use more efficient heating and cooling equipment. The rule could reduce carbon emissions by 11.29 metric tons, which is like taking 2.3 million cars off the road. It’s also another example of how climate change policy makes good economic sense. DOE estimates that the rule would cost businesses up to $9.39 million per year but save them up to $13.1 million per in energy costs. Those benefits are in addition to $7.2 million annual savings from reduced carbon emissions.
  • The White House announced that it secured voluntary commitments from some large chemical manufacturers and retailers to phase out hydrofluorocarbons, or HFCs, more quickly than the law requires. This is an important development, as HFCs are 10,000 times more potent than carbon dioxide in causing climate change.

There were several other important developments around the summit as well:

  • The Global Commission on the Economy and Climate issued a blockbuster report concluding that stopping climate change might not cost us anything. The crux of the analysis: Over the next 15 years, we’ll spend $90 trillion on new infrastructure world-wide anyway. Ambitious measures to combat climate change would add just 5% to that figure. When you factor in the benefits – like better public health from reduce air pollution – the measures will likely be net-positive for the economy.
  • New York City announced a major plan to increase the energy efficiency of buildings, which will set the city on target to curb its greenhouse gas emissions by 80 percent by 2050 from 2005 levels. That’s the reduction that the UN has said industrialized countries must make to prevent catastrophic climate change.
  • The World Bank announced that 73 countries, 22 states, and over 1,000 businesses have pledged support for putting a price on carbon. The list includes the European Union and China, but not the U.S. It doesn’t provide any specifics on what anyone will do. Nor is it legally binding. But it’s a start.
  • The Rockefeller Brothers Fund, originally launched with Standard Oil money, led 180 institutions and hundreds of individuals in announcing that they will divest $50 billion in assets from fossil fuels.
  • Over 340 institutional investors worldwide that control at least $34 trillion in assets called on governments to put a price on carbon.
  • Google announced that it would sever ties with the American Legislative Exchange Council (ALEC) because of the group’s opposition to sound climate change policy. “Everyone understands climate change is occurring and the people who oppose it are really hurting our children and our grandchildren and making the world a much worse place,” Google Executive Chairman Eric Schmidt said. “And so we should not be aligned with such people — they’re just, they’re just literally lying.” Public Citizen pointed out that by the same reasoning, Google should leave the U.S. Chamber of Commerce as well. Facebook soon announced that it too was leaving ALEC.

Ahead of the UN Summit, over 300,000 – and possibly as many as 400,000 – people joined the People’s Climate March in New York City. It was the largest climate demonstration in history, shattering the organizers’ goal of 100,000 participants. In addition to the march in New York, activists held 2,808 other events in 166 countries.

We also learned some bad news last week:

  • The Global Carbon Project reported that greenhouse emissions grew by 2.3 percent in 2013, demonstrating that we still have a long way to go in fighting climate change. We need to start moving in the opposite direction, quickly.
  • This past August was the hottest in recorded history. May and June also set new records, and April tied the record set in 2010.

So we have our work cut out for us. But we can solve this problem – and evidence is mounting that stopping climate change will benefit consumers and the economy, not hurt us. We just need to convince our governments to act. You can start by telling the EPA that you support its proposal to curb carbon pollution from existing power plants.

This Labor Day, I’ll be thinking about my family.

My great grandfather, an immigrant from eastern Europe who crossed the Atlantic to work in a western Pennsylvania steel mill, died in that mill in 1929 when a piece of industrial equipment came crashing down on him.

His daughter – my grandmother – was less than a year old.

How many millions of families have suffered similar tragedies? The deadly nature of work in the “Steel Valley” is well documented. Local histories and literary classics such as Blood on the Forge and Out of This Furnace testify to this bloody past.

Clearly, we’ve come a long way since 1929, most significantly with the formation of the Occupational Health and Safety Administration (OSHA) in 1971.

Nevertheless, tragic workplace deaths occur in America almost every day. Scroll through OSHA’s 2014 document recording “FY14 Fatalities and Catastrophes to Date” (PDF), and you’ll begin to get a sense of the lives lost each day that may have been prevented.

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As a general rule, cost-benefit analyses are suspect.

Such analyses – which federal agencies perform to weigh the health and safety “benefits” of regulations (benefits like lower infant mortality rates and reliably safe and clean drinking water) against the “cost” of lost profits to Corporate America – result in a distorted model of a regulation’s impact. Invariably, the distortion creates a bias that exaggerates the regulation’s “cost,” largely because cost (measured in dollars and cents) is more easily quantified than benefits.

So one might think it’s a good thing that economists at the FDA have started factoring in pleasure – or, more specifically, its loss – when weighing the costs and benefits of new regulations. And one might think that a regulation that is expected to result in lower infant mortality rates, fewer cancer diagnoses, and longer, healthier lives for the American public to be a winner in terms of “pleasure,” right?

Unfortunately, one would be wrong.

Shockingly, the FDA’s cost-benefit analysis for a new tobacco regulation resulted in the rule’s projected health and safety benefits – fewer instances of heart and lung disease and fewer early deaths – being reduced by 70 percent due to the “loss in pleasure” smokers endure when trying to break their addiction.

As an ex-smoker myself (tobacco-free since 2008), I am well aware that the symptoms of nicotine withdrawal certainly constitute a “loss in pleasure.” But the notion that a smoker’s physical discomfort for a relatively brief period of time somehow trumps by 70 percent the health benefits of quitting (not to mention the increase in one’s disposable income and the gradual restoration of one’s senses of taste and smell) is utterly outrageous.

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