Cap and Trade Follies

As Waxman-Markey, or using its cute euphemistic name, ACES- the American Clean Energy and Security Act of 2009- makes its way through Congress, it is best that everyone stand back, take a deep breath and look at this 600-page monstrosity.  Given Congress’ previous performance in actually reading the laws they write and railroad through Congress, hopefully our elected officials will do a better job this time around because the stakes are just as high as with TARP, the budget and porkulus.  In fact, it is important that we demand they read it and they answer one very important question- what will this cost not only me individually, but us as a nation?

There is no doubt that this bill, if implemented, will have a far-reaching economic effect on everyone who owns a car or a home.  It will have an effect on every energy-dependent business in this country.  And although as currently designed, everyone will pay- the economic impact will know no boundaries- some areas of the country will pay more dearly than others.

First off, this bill has very little to do with “security,” so lets dispense with the “S” in the title.  By “security,” one guesses they mean ending America’s dependence on foreign oil which is a nice goal.  But, this law is designed to decrease greenhouse gases, thus slowing global warming, thus appeasing Al Gore, thus allowing him to retire to his “energy-efficient” mansion in Tennessee with its multiple fireplaces.  But I digress…  The vast majority of oil- domestic or imported- is refined into gasoline.  The bulk of this legislation addresses greenhouse gases emitted by industries (primarily, the energy sector).  So there is very little security in this bill.  If the goal is energy security, there is plenty of coal, natural gas and oil reserves in the US to reliably power this country for centuries.  In addition, the US sits on the eighth largest uranium reserves.  Of the seven countries above us, six are reliable allies (like Canada and Australia).  Yet, in the name of energy security, there is absolutely no mention of nuclear energy in this bill.

But there are a lot of costs by establishing a cap-and-trade scheme.  I am not going to insult the reader’s intelligence by explaining this concept and how it allegedly works.  Suffice to say, it has been tried by the European Union to utter failure.  Not only did it not raise the anticipated revenues predicted, it was fraught with fraud and abuse.  Ironically, carbon dioxide emissions increased among EU nations while those in the US decreased.  Additionally, several industries- notably the coal and steel industries- needed life support in certain countries from their respective governments.  Eventually, the system was scrapped.  Yet, Obama states that this is the “best” system to control greenhouse gases.

Simply put, cap-and-trade is a hidden tax.  By forcing companies to buy and trade permits, it costs money.  Those costs are not borne by the business but passed on to the consumers- that is how things work- period!!  And here is where everyone needs to demand the truth.  Searching various web sites, it is interesting to note that the more conservative think thanks give more detailed information and estimates on the costs of this law to the American consumer.  For example, they range from a low of $1,145 per year for the average family of four (The Tax Foundation) to a high of $4,042 (National Association of Manufacturers).  As for the more liberal/progressive think tanks, I found only one actual quote of $750 (The Center for Budget and Policy Priorities), but that applied to only low income (less than $20,000 household income) families.  Obama’s EPA puts the cost the cost at an astronomically low of $150 per year which seems quite strange since the EPA under Bush put the cost of the less stringent Warner-Lieberman bill at $1,375.  The Congressional Budget Office itself places the cost at about $1,600 per year.  Note that in certain parts of the country, mainly the south, the costs would be even higher.  Using all these figures, including Obama’s EPA figure, the average still comes out to $1,387 per year on average.  In a recession, can the average family afford this additional expense?  Indeed, under any economic circumstances, can anyone be forced to bear these costs?

The standard response from the other side is that the cost of doing nothing will be greater.  Really?  Most analysis of this bill indicate that if this law achieves its goals and everything goes as planned (fat chance), the net effect will be to lower the average temperature by .04 degrees Celsius within five years and 0.22 degrees within 50 years.  Without getting into the nefarious science underlying this hoax perpetrated on the public, is it worth the following: the loss of 884,000 American jobs, an aggregate $7.4 trillion hit in GDP, a 90% increase in the cost of electricity over the life of the bill, a 74% increase in gasoline prices, a 55% increase in the cost of residential natural gas, an average hit of $1,600 to every household’s wallets, and a 29% increase in the size of the Federal debt?  All of these givens in exchange for, at best, 0.22 degrees change in average global temperature, if (and its a big if) everything goes right!  Additionally, there is absolutely no way enough “green jobs” would be created to offset the loss jobs in other areas of the economy, notably the higher-paying energy sector jobs.  It is interesting to note that as Americans throughout the country were losing jobs, the energy sector employment held steady or actually increased.

Using the Rahm Emmanuel motto never to waste a crisis, the Democrats, backed by their environmental allies, are trying to railroad this legislation through Congress.  Henry Waxman has a self-imposed deadline of releasing the bill for House “debate” and obvious approval by Memorial Day.  And they need to move fast because, quite frankly, people are starting to see through the charade.  A historical look at polls show that although people generally believe the earth is getting warmer, less and less are more convinced this is caused by man.  A CNN poll on 4/26/09 noted that 51% of Americans oppose a cap and trade scheme while an ABC News/Washington Post poll on 4/24/09 found that 77% of respondents were concerned about the costs of this legislation.  And an April 1st, 2009 poll by Marist College found that 69% of respondents viewed global warming as a minor problem or no problem at all.  Simply put, Al Gore and rest of those putting forth the doomsday scenarios are losing credibility among the people.  Instead of bringing us slide shows of polar bears on ice floes (that is how they get from point A to point B) and ice falling in the ocean (it happens every year!) and hurricanes (they, too, happen every year), they fail to bring us the dollar signs this legislation will cost other than their stock talking points.

And that is where the public needs to demand from their representatives in Washington the truth about the costs.  They need to contact their represenatives and Senators and ask them what this will cost them specifically and to leave the bulls*!# talking points out of the discussion.  Then express your concern not only for you personally, but your neightbor and the Nation in general.  As Obama and the environmental Nazis march us down the path to economic ruin over something that may be a created problem to advance the political career of a losing former Vice President, it is incumbent upon every American to demand that the costs be explained and spelled out in stark terms to the consumer.  Think about it: are we really expected to take the word of climatologists and meteorologists over computer-generated model predictions of weather 100 years down the line when they can’t predict a simple thunderstorm 24 hours in advance?  Express your displeasure through your voice and your votes.