CEI
UPDATE: Cap-and-Tax
Friends – Last night, at 3:00 a.m., the House Democrats released a 300-page amendment to their 1,200-page national energy tax legislation. No one - not one single Member of Congress - has read the bill that the Democratic Leadership is bringing up for a vote today. Remember, Speaker Pelosi promised the American people at least 24 hours to read a bill before a vote in her “New Direction for America” document distributed in 2006 that remains on her website today. Another broken promise from Washington Democrats.
So at the conclusion of his floor statement this afternoon, Republican Leader John Boehner will read the 300-page amendment on the House floor to America and the assembled Members of the House. By House tradition, three Members have the right to deliver unlimited floor remarks - the Speaker, the Majority Leader, and the Minority Leader. This is the House equivalent of the filibuster in the Senate. We expect it may take a while, but Members of Congress, and - more importantly - the American people have a right know what the House is voting on.
You can view the floor proceedings on CSPAN or at http://www.c-span.org/.
Democratic Leaders Rush to Buy Off Special Interests
Washington, D.C., June 26, 2009 - The Competitive Enterprise Institute urges Members of the U.S. House of Representatives to vote later today against the Waxman-Markey energy rationing bill, H. R. 2454. The 1500-page plan would amount to the biggest tax increase in history and impose a huge range of government controls over energy use.
The stakes are high, explains CEI’s Director Energy and Global Warming policy, Myron Ebell. “The Waxman-Markey bill would be the biggest tax increase in world history,” said Ebell. “Enacting Waxman-Markey would almost certainly make America a second-rate economic power. Those Members of the House who vote for it are voting for long-term economic decline.
“The process for railroading this 1500-page monstrosity through the House has been outrageous,” Ebell added. “Members will be voting first and finding out what they have voted on later.” The new, 1200-page version of the bill was released late Monday night. But then late last night, Chairman Henry Waxman released an additional 309 pages, for a total of 1500. Now, Democratic leaders are allowing a total of three hours of debate before a vote and allowing only one amendment to be offered.
Ebell pointed to some of the falsehoods associated with the bill.
“Supporters of Waxman-Markey are now claiming it will create jobs, which is ludicrous,” said Ebell. “If that were true, why did Democrats on the Energy and Commerce Committee defeat Republican amendments to suspend Waxman-Markey if gasoline reached five dollars a gallon or electric rates doubled or unemployment topped fifteen percent? The Democratic leadership will not allow those amendments to be offered on the floor.”
Meanwhile, Democratic leaders in the House are rushing to buy off hold-outs with “free” carbon credits. “Chairman Henry Waxman (D-Beverly Hills) has given away 85% of the ration coupons to various powerful special interests in order to gain support for the bill,” said Ebell. “Some people are going to become very wealthy from cap-and-trade, but it isn’t going to be consumers.”
We urge that voters contact their Representative immediately by calling the House switchboard at (202) 225-3121. Tell your Representative to vote No on H. R. 2454, the American Clean Energy and Security Act. Voters may also send their Member an e-mail by going to www.cei.org/1984 and clicking on the link to the action page.
Also courtesy of Paul Chesser this analysis from the Beacon Hill Institute:
The Economic Effects of Proposed Cap-and-Trade Legislation
President Obama and several members of Congress have proposed legislation to reduce greenhouse gas (GHG) emissions in the United States. The Waxman-Markey Bill currently before Congress would bring GHG emissions, and hence carbon emissions, below 2005 levels in steps - 3% below those levels by 2012, 20% by 2020, 42% by 2030, and 83% by 2050.
Waxman-Markey would create a “cap-and-trade” system, under which U.S. producers would receive tradable permits to emit greenhouse gasses. Producers buying the permits would, in effect, pay a tax for the privilege of emitting greenhouse gasses currently emitted without charge. The resulting “carbon tax” would have an effect on production and employment similar to an explicit excise tax on production.
In this report, the Beacon Hill Institute (BHI) uses two computer modeling capabilities to estimate the economic effects of this tax on the Louisiana economy.
(Go to Web link for table of findings)
Cutting CO2 emissions by 83% over four decades - as proposed in the Waxman-Markey Discussion draft - might appear to be an easy goal, but the results indicate otherwise. The first point to note is that such cutbacks, whether done by the U.S. alone or in concert with others, would all be more expensive than doing nothing at all.
If the United States were to cut emissions alone, with no cutbacks (relative to trend) by other countries, it would bear the full cost of abatement (PV = $3.85 trillion) while reaping only about $0.27 trillion in benefits. This represents a net cost, relative to doing nothing, of $3.42 trillion. It would cost the United States $154 billion by 2020 and $1.318 trillion by 2050.
By 2045, the tax on carbon would need to rise to $714 per metric ton of carbon (equivalent to $195 per metric ton of CO2) to induce consumers to make the necessary cutbacks; from Table 1 we see that this would add $1.73/gallon to the cost of gasoline (in 2005 dollars) and 6.7 to 14.9 cents to a kWh of electricity - essential doubling the retail price of electricity.
The benefits are modest because by 2050 the U.S. would account for less than a sixth of world emissions of CO2; reducing U.S. emissions by 83% (relative to the 2005 level) by then would cut global emissions by just 11%, which would have a modest effect on climate, moderating the increase in global temperature by 2100 from 3.30C (the baseline no-controls case) to 3.12.
The Beacon Hill Institute used its STAMP (State Tax Analysis Modeling Program) model to estimate the resulting effects on the economy of selection of states.(2)
(1) William Nordhaus, 2008, A Question of Balance, Yale University Press.
(2) For a description about the model visit STAMP .
By Kimberley A. Strassel
Steve Fielding recently asked the Obama administration to reassure him on the science of man-made global warming. When the administration proved unhelpful, Mr. Fielding decided to vote against climate-change legislation. If you haven’t heard of this politician, it’s because he’s a member of the Australian Senate. As the U.S. House of Representatives prepares to pass a climate-change bill, the Australian Parliament is preparing to kill its own country’s carbon-emissions scheme. Why? A growing number of Australian politicians, scientists and citizens once again doubt the science of human-caused global warming.
Among the many reasons President Barack Obama and the Democratic majority are so intent on quickly jamming a cap-and-trade system through Congress is because the global warming tide is again shifting. It turns out Al Gore and the United Nations (with an assist from the media), did a little too vociferous a job smearing anyone who disagreed with them as “deniers.” The backlash has brought the scientific debate roaring back to life in Australia, Europe, Japan and even, if less reported, the U.S.
In April, the Polish Academy of Sciences published a document challenging man-made global warming. In the Czech Republic, where President Vaclav Klaus remains a leading skeptic, today only 11% of the population believes humans play a role. In France, President Nicolas Sarkozy wants to tap Claude Allegre to lead the country’s new ministry of industry and innovation. Twenty years ago Mr. Allegre was among the first to trill about man-made global warming, but the geochemist has since recanted. New Zealand last year elected a new government, which immediately suspended the country’s weeks-old cap-and-trade program.
The number of skeptics, far from shrinking, is swelling. Oklahoma Sen. Jim Inhofe now counts more than 700 scientists who disagree with the U.N.—13 times the number who authored the U.N.’s 2007 climate summary for policymakers. Joanne Simpson, the world’s first woman to receive a Ph.D. in meteorology, expressed relief upon her retirement last year that she was finally free to speak “frankly” of her nonbelief. Dr. Kiminori Itoh, a Japanese environmental physical chemist who contributed to a U.N. climate report, dubs man-made warming “the worst scientific scandal in history.” Norway’s Ivar Giaever, Nobel Prize winner for physics, decries it as the “new religion.” A group of 54 noted physicists, led by Princeton’s Will Happer, is demanding the American Physical Society revise its position that the science is settled. (Both Nature and Science magazines have refused to run the physicists’ open letter.)
The collapse of the “consensus” has been driven by reality. The inconvenient truth is that the earth’s temperatures have flat-lined since 2001, despite growing concentrations of C02. Peer-reviewed research has debunked doomsday scenarios about the polar ice caps, hurricanes, malaria, extinctions, rising oceans. A global financial crisis has politicians taking a harder look at the science that would require them to hamstring their economies to rein in carbon.
Credit for Australia’s own era of renewed enlightenment goes to Dr. Ian Plimer, a well-known Australian geologist. Earlier this year he published “Heaven and Earth,” a damning critique of the “evidence” underpinning man-made global warming. The book is already in its fifth printing. So compelling is it that Paul Sheehan, a noted Australian columnist—and ardent global warming believer—in April humbly pronounced it “an evidence-based attack on conformity and orthodoxy, including my own, and a reminder to respect informed dissent and beware of ideology subverting evidence.” Australian polls have shown a sharp uptick in public skepticism; the press is back to questioning scientific dogma; blogs are having a field day.
The rise in skepticism also came as Prime Minister Kevin Rudd, elected like Mr. Obama on promises to combat global warming, was attempting his own emissions-reduction scheme. His administration was forced to delay the implementation of the program until at least 2011, just to get the legislation through Australia’s House. The Senate was not so easily swayed.
Mr. Fielding, a crucial vote on the bill, was so alarmed by the renewed science debate that he made a fact-finding trip to the U.S., attending the Heartland Institute’s annual conference for climate skeptics. He also visited with Joseph Aldy, Mr. Obama’s special assistant on energy and the environment, where he challenged the Obama team to address his doubts. They apparently didn’t.
This week Mr. Fielding issued a statement: He would not be voting for the bill. He would not risk job losses on “unconvincing green science.” The bill is set to founder as the Australian parliament breaks for the winter.
Republicans in the U.S. have, in recent years, turned ever more to the cost arguments against climate legislation. That’s made sense in light of the economic crisis. If Speaker Nancy Pelosi fails to push through her bill, it will be because rural and Blue Dog Democrats fret about the economic ramifications. Yet if the rest of the world is any indication, now might be the time for U.S. politicians to re-engage on the science. One thing for sure: They won’t be alone. See editorial here.
By Paul Cheshire on Report from Beacon Hill Institute
Recent studies forecasting the potential economic benefits of government green job programs are critically flawed and erroneously promote these jobs as a benefit, according to a report released today by The Beacon Hill Institute (BHI) at Suffolk University.
The economic analysis reviewed the primary claims of three of the most influential green jobs studies and found serious economic flaws in each.
“Contrary to the claims made in these studies, we found that the green job initiatives reviewed in each actually causes greater harm than good to the American economy and will cause growth to slow,” reported Paul Bachman, Director of Research at the Beacon Hill Institute, one of the report’s authors.
The studies reviewed by BHI include:
* The United Nations Environment Programme, International Labor Organization, International Trade Union Confederation’s Green Jobs Initiative, “Green Jobs: Towards Sustainable Work in a Low-Carbon World.”
* The Center for American Progress, “Green Recovery: A Program to Create Good Jobs and Start Building a Low-Carbon Economy.”
* The U.S. Conference of Mayors, “U.S. Metro Economics: Current and Potential Green Jobs in the U.S. Economy” prepared by Global Insight.
The authors of the BHI critique identified a fundamental error in each of these studies, specifically “counting the creation of a green job as a benefit and rationale for its proposed program in and of itself.”
The BHI study also stresses that “Jobs ? green or otherwise ? are not benefits but are instead costs. If the green job is a net benefit it has to be because the value the job produces for consumers is greater than the cost of performing the job. This argument is never made in any of these three green jobs studies.”
The executive director of the Beacon Hill Institute and co-author, David G. Tuerck, went further, noting that “these studies are based on arbitrary assumptions and use faulty methodologies to create an unreliable forecast for the future of green jobs.
“It appears these numbers are based more on wishful thinking than the appropriate economic models, and that must be taken into consideration when the government is trying to turn the economy around based on political studies and the wrong numbers,” Tuerck said.
According to BHI, the results of the study also show estimates on how a state-based cap and trade policy will negatively impact both job growth and wages. One specific critique involves job creation in the state of Indiana, where previous reports did not take increased energy costs from a “cap and trade” system into consideration when looking at job creation. In that case, BHI developed a computable general equilibrium (CGE) model and found that contrary to previous studies, Indiana would lose more than 18,000 jobs in 2009, up to nearly 29,000 job losses in 2011, and that real disposable income would be cut by nearly $1 billion in 2009 and close to $1.5 billion in 2011.
The authors concluded by noting that further economic analysis is needed before governments move forward on green job initiatives. “All three green jobs studies we reviewed are riddled with economic errors, incorrect methods, and dubious assumptions. Economic policy should not be based on such faulty analysis. Serious economic studies of costs and benefits are desperately needed before the adoption of any green jobs proposal.”
The complete study is available Full Text of Study (PDF) (Go to link here to access).
Loss of jobs also a theme of this week’s Scientific Alliance Newsletter - excerpted here.