Tag Archives: cap-and-trade

The Price of Being the Enemy

by Gary Palmer

The evidence is undeniable – global warming is now a major problem for practically every person in America, including the people of Alabama. If you don’t believe it, check your monthly utility bill or the price of gasoline to see that global warming is a big problem in terms of what it costs you.

Technically, the problem is not global warming. It began with cooked up statistics that leftist politicians and environmentalists used to push an agenda that will devastate our economy and do nearly nothing to impact the global temperature. A formidable array of politicians and scientists have bought into the proposition that human activity is bad for the planet.

This belief is not new. In their book The First Global Revolution published by the Club of Rome in 1998, authors Alexander King and Bertrand Schneider make the case for using predictions about worldwide environmental catastrophe to force nations to change economic and governing policies.

King and Schneider wrote, “In searching for a common enemy against whom we can unite, we came up with the idea that pollution, the threat of global warming, water shortages, famine and the like, would fit the bill. In their totality and their interactions these phenomena do constitute a common threat which must be confronted by everyone together.” They concluded, “All these dangers are caused by human intervention in natural processes, and it is only through changed attitudes and behavior that they can be overcome. The real enemy is humanity itself.”

Hmmm. Based on that statement it would be logical to conclude that, if people are the enemy, policies that punish people are not necessarily bad as long as the policies can be billed as helping save the environment.

Needless to say, that would not go over well with most Americans who are opposed to such schemes as Cap and Trade. Even though the Cap and Trade bill died in the U.S. Senate last year (after passing in the House), the Environmental Protection Agency (EPA), with the full support of the Obama Administration, is in the process of implementing it anyway. If the EPA succeeds in this effort, the impact on the American economy will be devastating.

A Heritage Foundation analysis of the Cap and Trade bill that passed the U.S. House of Representatives projected that the GDP for the United States would decline by a cumulative $9.4 trillion between 2012 and 2035. Heritage also projected that net job losses would approach 1.9 million by 2012 and could approach 2.5 million by 2035. The irony of the job losses is that they will hit manufacturing and mining particularly hard, eliminating thousands of union jobs.

Additionally, the Tax Foundation projected that the total burden of the Cap and Trade bill passed by the U.S. House of Representatives in 2009 would cost the average family of four over $1,200 per year. Moreover, this burden is regressive across income levels, consuming a significantly higher percentage of low income households’ income. According to the Tax Foundation, the Cap and Trade bill will cost households in the bottom 20th percentile of household income $617 per year or about 6.2 percent of their income.

Even though the U.S. Senate rejected the Cap and Trade bill, the Obama Administration is using the EPA to implement it anyway and at significant cost to low- to middle-income families. Perhaps as a way to justify new, more costly regulations, the EPA released a report earlier this year claiming that the Clean Air Act of 1990 will avert 230,000 premature deaths and add $2 trillion to our economy by 2020. The estimated economic benefits in the EPA report range from $250 million to $5.7 trillion, making it appear that the estimators could not come up with anything close to what the economic benefit might be, so they split the difference at $2.7 trillion.

Claiming that 230,000 lives were spared a premature death as a result of the EPA’s actions is in the same genre as justifying the billions of dollars wasted with the Stimulus Bill by claiming it saved an unspecified number of jobs. No one can prove that environmental regulations have saved lives any more than it can be proved that implementing cap and trade regulations will save the planet, but we can see the proof of the impact that these regulations are having on our household income.

High utility bills and the price of gasoline are just part of the price you pay for being the enemy.

Gary Palmer is president of the Alabama Policy Institute, a non-partisan, non-profit research and education organization dedicated to the preservation of free markets, limited government and strong families, which are indispensable to a prosperous society.

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.

Rep. Steve Austria on Cap and Trade Tax

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