By Rep. Steve Austria
Under the cap and trade program, household energy costs are expected to increase between $1,600-$3,100 annually.
Last week, the House and Senate debated and passed the conference report to accompany the Democrats’ budget resolution (S. Con. Res. 13). This budget proposal paves the way for a massive new $646 billion energy tax, known as cap and trade.
Cap and trade limits the amount of carbon allowed to be released into the air. For example, if an energy-producing entity, like a coal-fired power plant, is unable to sufficiently lower its emissions; they must spend money to upgrade the plant or pay to release the carbon. This extra cost to industry is passed along to the consumer through increased energy prices. The non-partisan Congressional Budget Office estimates that under this current proposal, the average American household’s energy bill could increase by $1,600 annually. According to one D.C.-based think tank, prices could increase to as much as $1,900, equivalent to what many families spend on groceries, clothes or property taxes in a given year.
In addition, states that rely on more carbon-intensive sources of energy, like coal, will suffer an even greater cost. According to the Energy Information Administration (EIA), approximately 90 percent of Ohio’s electricity generation comes from coal.
The program places new regulations on our domestic industries making them less competitive with countries, like China and India, that do not face similar restrictions. This could result in businesses establishing operations overseas or outsourcing jobs in an effort to dodge the regulations. This could further erode the job growth of the U.S. manufacturing sector where Ohio has a strong presence. Indeed, the impact cap and trade could have on the average American household, and Ohio in particular, is deeply concerning, specifically in this economic environment.
Source: E-Newsletter from Congressman Steve Austria, May 6, 2009