SCR 15, Ohio Cap & Trade Resolution

Before the 4th of July break, the Ohio Senate passed concurrent resolution S.C.R. 15 by a vote of 21-11. S.C.R. 15 is a concurrent resolution opposing Cap and Trade legislation being proposed in the U.S. Congress. it has already passed the U.S. House of Representatives but not in the Senate.

President Barack Obama proposed this legislative scheme to Congress that would establish a specific limit or cap on greenhouse gas emissions. Emitters of green house gases would be required to purchase government credits (tax credit) until the cap is met after which, emitters would be allowed to sell or trade their remaining credits (tax) to others.

So why is the Ohio Senate against this method of reducing carbon and other greenhouse gas emissions? Didn’t they do the same to the automobile industry? Yes, and cars now cost as much as much as houses once did.

The following are the reasons why the Ohio Senate opposes the federal government’s cap and trade bill. Increased taxation by means of cost inflation is the first reason.

Companies that are required to participate in the cap and trade program will ultimately pass the cost of participation in the program on to consumers. The Congressional Budget Office estimates that price increases resulting from a 15% cut in greenhouse gas emissions would cost the average household between 1.7% to 3.3% of its after-tax income every year, with households in the bottom fifth of the income scale losing the largest share of income.

In addition to pushing costs up on most consumer goods, it would severely impact the cost of energy to all Ohio businesses and citizens.

The combustion of coal produces more than 50% of the electricity generated in the United States, with Ohio receiving more than 85% of its electricity from coal. Thus, the cap and trade program will result in massive increases in energy costs for all consumers because the cost to produce electricity from coal will be markedly higher. The increased energy costs will disproportionally impact states in the middle part of the United States such as Ohio that are more reliant on coal. The Congressional Budget Office has acknowledged that these increases in energy costs will effectively act as a regressive tax affecting every household in the nation, with a disproportionate effect on poorer families.

The Senate also recognizes that the federal government would gain billions of dollars at the huge expense to Ohio consumers and workers.

The cap and trade program will result not only in a massive windfall of hundreds of billions of dollars for the federal government through the sale of emissions credits, but also in the loss of hundreds of thousands of jobs. The program ultimately will not result in the overall global decrease of greenhouse gas emissions because many industries that emit greenhouse gas will merely relocate to countries with less stringent standards.

The solution proposed by the Ohio Senate is simple:

[E]nact legislation that encourages states to establish and develop their own renewable energy portfolio standards.

The Ohio legislature has already proposed and enacted legislation toward this goal several years ago. Requiring energy providers to use clean energy technology and provide Ohio consumers a set percentage of clean energy was one enactment. This and other aspects of Ohio’s energy plan renders cleaver taxation scheme of Obama and Democrats redundant and counter-productive.

In light iof these facts, one has to agree with the Ohio Freedom Alliance that the passage of S.C.R. is a victory for Ohio. It is an important step to stopping the federal government from furthering a form of taxation without representation.

The next step is for the Ohio House of Representative to pass their version of the anti- Cap & Trade Resolution H.C.R. 25.

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