Our Democratic-controlled Congress is trying to pass what could possibly be “the biggest tax in American history,” the Waxman-Markey “American Clean Energy and Security Act,” H.R. 2454. The Waxman-Markey bill “aims to dramatically reduce carbon dioxide emissions by making greenhouse gas-emitting businesses purchase or trade government-rationed or- auctioned coupons in a ‘market.'”
Make no mistake about it, Waxman-Markey will slow economic growth and lead to increased direct (electricity, gasoline) and indirect (increased consumer prices for products and services passed on by companies) energy costs for all Americans. Just what will the price of “cap-and-trade” ultimately be? According to the Heritage Foundation, “by 2035, global warming legislation would inflict real GDP losses of $9.4 trillion, rasie an avergae family’s annual energy bill by $1,241, and destroy 1,145,000 jobs on average.”
And the Heritage Foundation is not alone in reaching this conclusion. An article in today’s Wall Street Journal observes that:
The hit to GDP is the real threat in this bill. 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. Some companies will instead move their operations overseas, with the same result…
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.
Still, all this might, arguably, be worth it if we could reasonably expect a cap-and-trade scheme such as Waxman-Markey to have a discernible impact on carbon emissions. Unfortunately, this does not appear to be the case. Europe’s experience with similar cap-and-trade regimes, for example, indicates that they have a “negligible impact on pollution.”
One might wonder how, in the present economic climate, a piece of legislation that would act as a serious drag on economic recovery could possibly be passed by Congress. I think, in this regard, the Denver Post get’s it just about right:
When it comes to environmental policy, politicians will rely on your good intentions on the issue and not much else. With cap-and-trade, however, the economic tradeoffs are so damaging, the environmental benefits so negligible and the plan such a clutter, that selling it — even to Democrats — is turning out to be difficult.
Difficult, but, alas, not impossible.
It’s also telling that the Congressional Democrats defeated three amendments proposed by Republicans: “one to suspend the program if gas hit $5 a gallon; one to suspend the program if electricity prices rose 10% over 2009; and one to suspend the program if unemployment rates hit 15%.”
Those suggestions seem eminently reasonable to me. What strikes me as unreasonable is pressing forward a piece of legislation that would increase energy costs, eliminate jobs, and impede our economic recovery.