Climate Bills and a Green Economy

When the Heritage Foundation did its analysis of Waxman-Markey, it broadly compared the economy with and without the carbon tax. Under this more comprehensive scenario, it found Waxman-Markey would cost the economy $161 billion in 2020, which is $1,870 for a family of four. As the bill's restrictions kick in, that number rises to $6,800 for a family of four by 2035. - The Cap and Tax Fiction, Wall Street Journal, June 26, 2009

On the cost of energy, The Wall Street Journal writes: "The whole point of cap and trade is to hike the price of electricity and gas so that Americans will use less. These higher prices will show up not just in electricity bills or at the gas station but in every manufactured good, from food to cars. Consumers will cut back on spending, which in turn will cut back on production, which results in fewer jobs created, or higher unemployment." Even billionaire Democrat donor Warren Buffet acknowledged that cap and tax is a 'huge tax ... and a fairly regressive tax.' And the Journal concludes: "Americans should know that those Members who vote for this climate bill are voting for what is likely to be the biggest tax in American history. Even Democrats can't repeal that reality." - More on the Cap & Trade Tax, A Red Voice in a Blue State, July 5, 2009

How Will Cap-and-Trade Affect You? It Will Spread the Wealth Around

September 29, 2009

Moonbattery - Obama famously told Joe the Plumber he wanted to "spread the wealth around." Now, we know what he meant by that.

According to the Institute for Energy Research, the Cap and Trade bill currently before the Senate would redistribute $14 Billion from the bottom 80% of income earners to the top 20% of income earners.

The Waxman-Markey bill distributes roughly $778 billion in free emission allowances to various politically-favored industries and others between 2012 and 2020, at the direct expense of non-favored industries and U.S. consumers. The ultimate impact of this giveaway of emission allowances is to transform the already regressive gross burden of a cap-and-trade system into a highly regressive federal climate policy that effectively redistributes tens of billions of dollars per year from low- and middle-income households to high-income shareholders.

Translation: the bill is set up to increase taxes on the middle-class and transfer those taxes to politically-connected industries.

Also, we recently learned that under Obama, all income levels are declining, but the middle-class is hardest hit. And Obama proposes to transfer even more middle-class wealth to the upper quintile under Cap and Trade.

By the way, in the Least Believable Lie of the Week, John Kerry claims he has no idea what the expression "Cap and Trade" means. He claims the phrase confuses Americans, so he wants his Cap and Trade bill renamed a "Pollution Reduction" bill. The Democrats used a similar line when they voted against posting the contents of the Health Care Bill online so Americans could read it before they voted on it. They said it would "confuse" people.

In both cases, what they actually meant was... people were figuring out what they were up to and didn't like it.

Cap and Trade: Who Wins, Who Loses

May 10, 2009

New Geography - ... Cap and Trade is not a solution – it is another money-making scheme cooked up by the “dangerous dreamers” of Wall Street. In the EU they at least have the good grace to call it a “Trading Scheme.”

A global carbon trading market already exists. “Pollution rights” have been traded since the 1990s when the Environmental Protection Agency held the first auction of air emission allowances, or pollution rights, at the Chicago Board of Trade. Starting with sulfur dioxide allowances, other pollutants were added in the next ten years to eventually create a complete trading market on the Chicago Climate Exchange.

“The right to use water or air is more valuable than food, and we can use the price system to allocate that right,” said Richard Sandor at the 2005 Milken Institute Global Conference (yes, that Milken).

The Chicago Mercantile Exchange and the New York Stock Exchange are now prepared to expand the environmental markets for industrial pollution, also known as the carbon markets, into “futures and options on more than 40 U.S. and international indexes [for pollution rights].”

But, really, do we want the same bunch of guys that gave us junk bonds, mortgage-backed securities and credit default swaps allocating air and water? Globally? Into the future?

Like sending subprime mortgages throughout the global economy, this scheme will allow pollution rights to be bought and sold by anyone. So, it isn’t just the factory next door to the power generator in Detroit that will be emitting the extra tons of carbon – factories in other countries will be able to sell their carbon emitting rights to power companies in Detroit. It’s a great money-making scheme for a solar-powered producer in Costa Rica – but a very bad deal for those breathing the air and paying for power in Detroit.

The Cap and Trade scheme is being supported by President Obama’s main economic advisor, Larry Summers – who once said we should export pollution to Africa because their per capita figures are too low.

“I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that.”

Cap and Trade gets the polluters mixed up with the victims of pollution. Shouldn’t the money generated from the sale of pollution rights accumulate to the persons harmed by the pollution? The idea that you can structure economic incentives to produce socially beneficial results really ends up being about creating paper profits for the money-traders at the expense of the people living with the pollution. This does not seem like a fair trade to me.

The Waxman-Markey Global Warming Bill is an "Energy Tax in Disguise"

July 5, 2009

David Limbaugh - The Heritage Foundation's senior policy analyst for energy and environment, Ben Lieberman, has produced a stellar paper on [the cap and trade bill]... Based on available evidence and analysis, Lieberman concludes 'that both the seriousness and imminence of anthropogenic global warming has been overstated.' But even if we assume the problem is as bad as the hysterics claim, the proposed bill 'would have a trivial impact on future concentrations of greenhouse gases... [It] would reduce the earth's future temperature by 0.1 to 0.2 degree C by 2100, an amount too small to even notice.'

The bill would bind only the U.S., not other nations, many of which, like China, are 'polluting' at a record pace. Also note that many European nations that have already imposed similar emissions restrictions have seen their emissions rise.

But what would the costs be for this quixotic legislative paean to earth goddess Gaia? Contrary to the flawed analyses being advanced by the bill's proponents, Heritage estimates that the direct costs would be an average of $829 per year for a household of four, totaling $20,000 between 2012 and 2035. But when considering the total cost as reflected in the cost of allocations and offsets, the average cost to that family unit would be $2,979 annually from 2012 to 2035.

Adding insult and hypocrisy to injury, the bill would hurt the poor the worst because they would bear a disproportionate burden of the higher energy costs the bill would trigger.

Now here's the kicker. The bill is also projected to harm the manufacturing sector and cause estimated 'net' job losses, averaging about 1.15 million between 2012 and 2030. The overall gross domestic product losses would average $393 billion per year from 2012 to 2035, and the cumulative loss in gross domestic product would be $9.4 trillion by 2035. The national debt for a family of four would increase to $115,000 by 2035.

More on the Cap & Trade Tax

July 5, 2009

A Red Voice in a Blue State - Heritage experts have been working round the clock to inform the public of the true costs of cap-and-tax legislation.

According to recent Heritage economic analyses, the costs of the proposed global warming bill will kick in when it takes effect in 2012. By 2035, a family of four's energy costs will increase dramatically:

· 90 percent increase in electricity costs

· 58 percent increase in gasoline costs

· 55 percent increase in natural gas costs

Lieberman points out that these are only "low-ball estimates" and that the burden of these increased costs will disproportionately affect the poor.



In addition, there is no concrete evidence that such carbon regulations will have a noticeable impact on the earth's temperature. As Heritage experts David Kreutzer, Karen Campbell and Nicolas Loris point out, cap-and-tax legislation will only bring "higher taxes and economic devastation in return for ... nothing."