Tag Archives: cap and trade

Global Warming Policies’ Economic Chill

By MARGO THORNING | Posted Thursday, June 12, 2008 4:20 PM PT

Many Americans think that switching to energy-efficient light bulbs, buying environmentally friendly appliances and obeying a (100% recycled) bag of green living tips will be the extent of their contribution to curbing greenhouse gases. But the price tag to consumers could be a lot higher if some politicians have their way. In fact, U.S. households could expect a $2,900 annual hit to their family budget sooner than they think.

That’s just one figure causing concern as politicians race to address global warming. Therefore, it’s worth noting that at the same time Americans are concerned about climate change, they are also very concerned about the sluggish economy and the impact it is having on the pocketbook. It is only fair, then, to view the two issues side by side. When cooler heads prevail, the reality is clear:

There is weak public support for global-warming policies, which would end up costing the average family thousands of dollars.

First, it’s worth noting where Americans currently stand on global warming. According to Gallup, as much as 70% of the public during the late 1990s through 2000 said the environment should take priority over the economy. That number has dropped to just 49% this year.

Perhaps even more startling for some policymakers may be that “the environment barely registers as a top-of-mind concern” for the public when asked to name the nation’s biggest problem, according to Gallup’s research. Though the environment tops the list of problems Americans perceive for 25 years in the future, it still lags behind the economy and energy when taken together.

Even then, a poll from the Institute for Energy Research found that only 1 in 4 people citing the environment as their top concern rate global warming as the most serious threat.

None of this suggests the environment isn’t a concern, or that Americans are not concerned. The onslaught of scary warnings on global warming has worn down voters. Thus, many will tentatively agree when politicians ask them to support the cause. After all, a lot of people think, what’s wrong with kicking in a few bucks if it means a cleaner world?

Unfortunately, politicians are not asking for a few bucks. They’re asking that everyone give until it hurts, and then give some more.

Take, for instance, America’s Climate Security Act of 2007, sponsored by Sens. Joe Lieberman and John Warner. The climate would become more secure, they say, by thrusting rigid emissions rules on American business in a cap-and-trade system they liken to the free market at work.

(We are all too well aware of the “efficiency” big-government bureaucracy brings to an issue).

While the act would impose Uncle Sam further into our economy, the economic lives of average Americans would become far less secure. By requiring cuts in greenhouse gas emissions, the bill would increase energy costs ranging from gasoline to electricity. Those costs are just the beginning. Higher prices mean less economic activity, which will drag on job creation nationwide, further slowing the economy.

Those costs will hit home, literally. A joint analysis undertaken by the National Association of Manufacturers and the American Council for Capital Formation concluded that passage of the Lieberman-Warner bill, which was recently killed in the Senate but could return under another name, would have caused significant economic hardship. American households would have faced income losses of as much as $2,927 per year in just a dozen years, and as much as $6,752 per year in 2030. Job losses would have ranged from 1.2 million to 1.8 million in just 12 years and by as much as 4 million by 2030.

Additional research undertaken by the Heritage Foundation confirms these concerns. That organization found that under the Lieberman-Warner scheme, the average household would pay $467 more each year for its natural gas and electricity. Heritage says the average household will spend an additional $8,870 to purchase household energy over the 2012-30 period.

No one is asking politicians to be economists. But economists are telling politicians what they should already know: Government interference with our economy can have a very high price tag for working families.

Even if politicians don’t like to look at economic data on the cost of the Lieberman-Warner bill, polling figures are already equally revealing. Lawmakers can choose to heed those facts now, or they may have to face some tough polling information of their own when their constituents start getting higher energy bills.

Thorning is senior vice president and chief economist of the American Council for Capital Formation.

 

The Planet Tax

By INVESTOR’S BUSINESS DAILY | Posted Tuesday, June 03, 2008 4:20 PM PT

Global Warming: The Senate takes up a bill to strangle the economy and mortgage your children’s future in the name of saving the planet. Hold on to your wallets and your jobs. It’s going to be a bumpy ride.


Read More: Global Warming | Budget & Tax Policy


 

The U.S. needs a Domestic Energy Development Act, but what it might get this week is a Climate Security Act that makes human sacrifices of the American people on the altar of the environmental earth goddess, Gaia.

As Ben Lieberman of the Heritage Foundation points out, global warming is a concern, not a crisis. We have recently noted scientists who, on the basis of actual observation and not computer models, have said warming stopped in 1998 and will remain dormant at least for the next decade, even as emissions rise.

Global warming has been proved to be a natural, cyclical phenomenon determined by natural forces such as ocean currents and solar activity. This bill even ignores the global part, imposing draconian costs on just the American people and economy for marginal and temporary gains.

Lieberman states that the bill sponsored by Sen. John Warner, R-Va., and Sen. Joe Lieberman, D-Conn., no relation, would cost the U.S. manufacturing sector alone more than 1 million jobs by 2022 and 2 million by 2027.

GDP losses could reach $4.8 trillion by 2030. All this pain, he says, would “reduce the Earth’s temperature by one- or two-tenths of a degree Celsius — too small to even verify.”

The bill targets power plants, refineries, factories and transportation, and simply ignores the fact that from 2006 to 2030 the U.S. population will grow by 22% and the number of new housing units by 25%. Americans will need more energy, not less.

A study by Charles River Associates puts the cost (in terms of reduced household spending per year) of Warner-Lieberman at $800 to $1,300 by 2015, rising to $1,500 to $2,500 by 2050. Electricity prices could jump by 36% to 65% by 2015 and 8% to 125% by 2050.

Heritage reckons the bill will raise gasoline prices by $1.10 a gallon by 2030. To which Sen. Lieberman glibly responded: “People would be thrilled to have gas prices rise only 2 cents a year.”

But they’d rise much more than that, Joe, as you and your peers cut off forever the nation’s abundant energy resources.

According to Heritage, because of Warner-Lieberman, from 2012 to 2030 every U.S. household will pay on average $8,870 extra to buy energy, aside from higher gasoline prices resulting from locking out oil and gas in ANWR, the Outer Continental Shelf and in Rocky Mountain shale.

The bill aims to cut U.S. greenhouse gas emissions by 35% to 40% below 2005 levels. It will employ a “cap and trade” system whereby emissions would be limited on a yearly basis, with manufacturers and energy producers trading carbon credits like baseball cards. Since the European Union adopted them three years ago, their emissions have actually gone up several percentage points.

President Bush, estimating the proposed law “would impose roughly $6 trillion of new costs on the American economy,” has rightly said he’ll veto the bill in its present form.

What America needs is a bill with a Manhattan Project for nuclear power plants, a plan to develop the two trillion barrels of North American shale oil, and a map of where the rigs in ANWR and offshore will go.