By Marc Morano, EPW Blog
David Harsanyi in the The Denver Post ”Climate is Right for Another Swindle” starts How does Washington plan to resolve our energy problems and control atmospheric temperatures? Well, how do they fix anything? By proposing a gargantuan boondoggle. A “cap and trade” bill, one that will supposedly cut 66 percent of our emissions by 2050, is being debated in Congress this week. To begin with, proponents of America’s Climate Security Act have been misleading the public by claiming that cap and trade is a “market- based” solution. In truth, cap and trade does to the market what “American Idol” does to music. The idea sounds harmless: government caps emissions, and corporations trade the allotted credits among themselves. Some of the credits will be auctioned off by government. The Wall Street Journal estimates these auctions will net $6.7 trillion for government coffers by 2050. And those de facto taxes will not be paid by disreputable energy CEOs and their greasy lobbyist henchmen. They will be paid by you.”
L. Brent Bozell III in the Media Center’s Hurricane Lieberman-Warner writes “The media will sell this bill as an important solution that absolutely everyone who considers himself a responsible citizen will support. Virtually absent from the discussion will be the cost, both financial and in the loss of freedom. If either of these prices are covered, they will be vastly underestimated. A Heritage Foundation analysis is sobering. If you think Katrina was an expensive proposition, consider that according to Heritage, the economic damage of the bill would equal the cost of “660 hurricanes - 35 per year - for two decades.” Don’t expect that statement to make it on the evening news. The Congressional Budget Office (CBO) says Lieberman-Warner would effectively raise taxes on Americans by more than $1 trillion over the next 10 years. That won’t be a headline in USA Today, either.
The Investors Business Daily in ”The Planet Tax” notes “The Senate takes up a bill to strangle the economy and mortgage your children’s future in the name of saving the planet. Hold on to your wallets and your jobs. It’s going to be a bumpy ride. The U.S. needs a Domestic Energy Development Act, but what it might get this week is a Climate Security Act that makes human sacrifices of the American people on the altar of the environmental earth goddess, Gaia. As Ben Lieberman of the Heritage Foundation points out, global warming is a concern, not a crisis. We have recently noted scientists who, on the basis of actual observation and not computer models, have said warming stopped in 1998 and will remain dormant at least for the next decade, even as emissions rise.
Read more of the many editorials and op ed pieces from both the left and right here in this Round-up. See also today’s EPW summary with key points about the $6.7 trillion tax boondoggle that Lieberman Warner is.
EPW Debate on Lieberman Warner
Senator Barbara Boxer (D-CA), the chairman of the Environment & Public Works Committee, declared in her opening floor speech today that a “recession is the precise time to” enact the Lieberman-Warner global warming cap-and-trade bill because it “brings us hope.”
The Lieberman-Warner global warming bill would have many consequences, but “hope’ is not among them. The Cleveland Plain Dealer editorialized on June 1, that the bill “will just bore new holes into an already battered economy.” American workers, already suffering from a weakening economy, skyrocketing home energy, and gas prices would face more economic pain under the bill. With average gas prices across the country approaching or at $4 a gallon, the Senate’s global warming “de-stimulus” bill will further drive up the cost at the pump.
Despite these economic woes, Senator Boxer claimed that now is the “precise time” to pass a bill that will raise energy prices. “Why do this [the Lieberman-Warner bill] now? We’re in a recession. Precisely because we’re in a recession is why we should be doing this. This bill is the first thing that brings us hope,” Senator Boxer said during her opening remarks on the Senate floor today.
Senator Inhofe said on April 20, 2008: “Only in Washington could higher energy prices be characterized as not negatively impacting the U.S. economy. If Democrats have their way, Americans will pay significantly more at the pump, in their homes, and in many cases, with their jobs, all to accomplish an undetectable impact on the climate. The question now is which U.S. Senator will dare to stand on the Senate Floor a month from now to vote in favor of significantly increasing the price of gas at the pump?”
Here is a sampling of economic government and private economic analyses of the impact of Boxer’s Climate Tax Bill. Read more of the impact of the Lieberman Warner Bill here.
Read Senator Inhofe’s editorial in the Wall Street Journal this morning ”We Don’t Need a Climate Tax on the Poor” and this Roll Call story on Global Warming Draws Heat From Democrats. See Boxer’s claim the biggest tax in history is really the biggest tax cut in history here.
By Robert J. Samuelson, Washington Post
We’ll have to discard the old adage “Everyone talks about the weather, but no one does anything about it.” It is inoperative in this era of global warming, because the whole point of controlling greenhouse gas emissions is to do something about the weather. This promises to be hard and perhaps futile, but there are good and bad ways of attempting it. One of the bad ways is cap-and-trade. Unfortunately, it’s the darling of environmental groups and their political allies.
The chief political virtue of cap-and-trade—a complex scheme to reduce greenhouse gases—is its complexity. This allows its environmental supporters to shape public perceptions in essentially deceptive ways. Cap-and-trade would act as a tax, but it’s not described as a tax. It would regulate economic activity, but it’s promoted as a “free market” mechanism. Finally, it would trigger a tidal wave of influence-peddling, as lobbyists scrambled to exploit the system for different industries and localities. This would undermine whatever abstract advantages the system has. The Senate is scheduled to begin debating a cap-and-trade proposal today, and although it’s unlikely to pass, the concept will return because all the major presidential candidates support it.
Carbon-based fuels (oil, coal, natural gas) provide about 85 percent of U.S. energy and generate most greenhouse gases. So, the simplest way to stop these emissions is to regulate them out of existence. Naturally, that’s what cap-and-trade does. Companies could emit greenhouse gases only if they had annual “allowances”—quotas—issued by the government. The allowances would gradually decline. That’s the “cap.” Companies (utilities, oil refineries) that needed extra allowances could buy them from companies willing to sell. That’s the “trade.”
This is mostly make-believe. If we suppress emissions, we also suppress today’s energy sources, and because the economy needs energy, we suppress the economy. The models magically assume smooth transitions. If coal is reduced, then conservation or non-fossil-fuel sources will take its place. But in the real world, if coal-fired power plants are canceled (as many were last year), wind or nuclear won’t automatically substitute. If the supply of electricity doesn’t keep pace with demand, brownouts or blackouts will result. The models don’t predict real-world consequences. Of course, they didn’t forecast $135-a-barrel oil.
As emission cuts deepened, the danger of disruptions would mount. The Congressional Budget Office has estimated that a 15 percent cut of emissions would raise average household energy costs by almost $1,300 a year. That’s how cap-and-trade would tax most Americans. As “allowances” became scarcer, their price would rise, and the extra cost would be passed along to customers. Meanwhile, government would expand enormously. Call this “environmental pork,” and it would just be a start. Read more here.
Also see Wall Street Journal Editorial here on Cap and Spend.