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Timothy P. Carney: Alcoa's loves green, but not the environment

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Earth Day is no longer about planting a tree or learning about conservation as much as it's about lobbying for government policy. That's because, frankly, government policy is where the money is -- as aluminum giant Alcoa made clear in its latest quarterly report.

Alcoa reported that it will profit from new federal environmental regulations for which it lobbied. These regulations will drive up consumer costs and probably hurt the environment. But if you oppose the Alcoa-Obama agenda, you'll be tarred as some sort of industry shill.

President Obama's mode of operation is this: (1) Shoot bellicose words at the "special interests" and slurring any who oppose his government expansion as Big Business shills. (2) Turn around and work hand-in-hand with those very same powerful lobbyists to craft big-government legislation. (3) Take money and liberty from regular people in the name of "reform" and give it to the well-connected.

Rewarding K Street and the titans of industry isn't likely Obama's motivation -- it's simply the consequence of injecting government further into the economy. His major legislative actions all fit this mold: the stimulus, the Detroit bailouts, health care "reform," and now a Wall Street bill that would institutionalize bailouts and whose central regulations Goldman Sachs embraces.

Perhaps the most sordid case of special-interest porkfest portrayed as a war against the special interests is Obama's environmental push, particularly on climate change and fuel economy.

Democrats and environmental activists paint their push for subsidies, mandates, taxes, and regulations as a battle pitting oil companies against polar bears -- as if all the profit is on the anti-regulation side. Alcoa knows better, and the company's quarterly profit report shows it.

"Our markets are gradually improving," Alcoa Chief Executive Officer Klaus Kleinfeld wrote in his latest quarterly note, "and both policy trends and consumer sentiment bode well for aluminum demand."

Kleinfeld explained: "Just a few days ago, the U.S. finalized new rules that require increased fuel efficiency and for the first time set greenhouse gas emissions standards for cars and light trucks. ... Factors like these play to aluminum's superior advantages as a light, strong, versatile and infinitely recyclable material."

What does it mean when "policy trends ... bode well" for your product? In this case, it means government is bullying customers into buying your product. Alcoa, whose CEO gave the maximum contribution to Obama, and whose former VP for "public strategy" now works at the Treasury Department, lobbied for these regulations.

Alcoa has repeatedly supported stricter Corporate Average Fuel Economy standards and is a member of the U.S. Climate Action Partnership, a lobby for restrictions on greenhouse gas emissions. These policies act as energy taxes -- effectively taxing the weight of a car.

Absent such regulations, an aluminum car frame is much more expensive than a steel car frame. With these regulations, aluminum, which is lighter, becomes more desirable.

So what's the problem? Alcoa is getting rich, but more people are driving lighter-weight, more efficient cars, right? Industry and the Earth both win, right? Hardly.

Making aluminum car frames requires much more energy than making steel car frames. One stage in the process -- dissolving the alumina to get pure aluminum -- inherently gives off carbon dioxide and the far more potent greenhouse gasses hexafluoroethane and tetrafluoromethane.

But Alcoa makes its aluminum in Australia, where Washington's CAFE and climate policies can't touch it. Down under, naturally, Alcoa's lobbying agenda isn't nearly so green. The Australian newspaper reported in 2008 that Alcoa "has warned that even a modest carbon cost on aluminum production could lead to plant closures in Australia and moves to higher-emitting plants in countries such as China."

So Alcoa's green agenda not only costs consumers more, but it also leads to more greenhouse-gas emissions and more coal being burned -- and those who oppose this agenda are demonized for selling out the planet. Turns out, under Obama, it is pretty easy being green.

Timothy P. Carney is the Washington Examiner's lobbying editor. His K Street column appears on Wednesdays.

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