Cap-and-Tax Opposition Resource Center; Impacts of Costly Climate Bill Exposed

Democratic leadership in Washington are aggressively working to pass global warming cap-and-trade legislation that, if passed, would drastically increase energy costs at the gas pump, in the grocery store, and in our homes - all for no environmental gain. The purpose of this webpage is to serve as an online resource center for anyone looking to learn more about the severe economic impacts of the cap-and-trade legislation. This page will be updated frequently with the latest news and additional links will be added as the debate continues in Congress.

*If you feel we are missing important information, please feel free to contact us and we will consider adding links to the page. Contact: matt_dempsey@epw.senate.gov

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RECENT HEADLINES

1/5/10: AP: Bingaman: Cap and trade bill unlikely this year - ALBUQUERQUE, N.M. -- The chairman of the U.S. Senate Energy and Natural Resources Committee said Tuesday that it's unclear whether Congress will be able to pass cap and trade legislation aimed at reducing greenhouse gas emissions this year. Sen. Jeff Bingaman, D-N.M., said there's no consensus on what form a cap-and-trade system would take, but strong desire exists in both the Senate and House to pass other energy-related bills that would curb pollution blamed for global warming.

11/7/09: Oklahoman Editorial: Climate shift: Senate likely to warm to Inhofe's view - Sen. Jim Inhofe lost his battle with Democrats over climate change legislation, but his ultimate victory might be in view. Democrats on the Senate's Environment and Public Works Committee approved a bill last week that would require a 20 percent cut in U.S. greenhouse gas emissions by 2020, mainly through a cap-and-trade system. Led by Inhofe, Republicans boycotted the vote, claiming the legislation's cost hadn't been fully analyzed by the Environmental Protection Agency. No matter. Democrats had more than enough votes to prevail with or without them present. The full Senate will be different. There Inhofe's argument - that emissions targets essentially returning the United States to 1977 levels could cripple the economy - likely will find bipartisan traction...No one in the Senate knows the issue better, and if/when the entire body debates it, evidence is strong the climate will favor Inhofe.

Fact Check 

Economic Impact of Cap-and-Trade on Consumers

Authors of Kerry-Boxer admit bill will cost American jobs -  In Section 311, titled "Climate Change Worker Adjustment Assistance," the authors clearly admit the bill will put people out of work.  The bill provides "adjustment assistance" to workers who have been "adversely affected" by the bill's mandates, which will cause higher energy prices, fewer jobs, and slow the economy.  In other words, we'll sack your job, and then put you on green welfare.  Not exactly the best recipe for putting "millions of people back to work." 

Washington Post: In Michigan, A Yellow Light For Green Jobs (October 6, 2009) - LANSING, Mich. -- If the future of American manufacturing lies in green industries, the Michigan governor's pursuit of jobs offers a cautionary tale. Four years ago, Jennifer M. Granholm set out to remake her state, which took an exceptional walloping with the decline of the auto industry, as a pioneer in creating environmentally friendly jobs. Today, however, jobs are still disappearing much faster than she can create them, raising questions about how long it will take Michigan and other hard-hit states to find new industries to employ their workers.

WSJ - Strassel: Rent Seekers Inc.: It isn't often an energy company (of all things) gets to present itself as an environmental crusader, cozy up to Washington rulemakers, buy political protection, and pad its bottom line-all in one neat little announcement. So give Pacific Gas & Electric, PNM and Exelon credit for going for the gold.

The Rebate Myth: "I have been around the block a few times. People are not going to get that refund. It is not going to hit them. People are going to be unemployed and they are not going to have any recourse whatsoever. The Government will have failed them again." Harry Alford before the Senate Environment and Public Works Commitee, July 16, 2009

Boxer Says Goal is to "Soften the Blow" from Cap-and-Trade - Admits That Cap-and-Trade Will Hurt Jobs, Families, Consumers - During a hearing on July 16, 2009, in the Senate Environment and Public Works Committee, Sen. Barbara Boxer (D-CA.), chairman of the committee, said that her goal is to "soften the blow" of cap-and-trade legislation, implicitly acknowledging that cap-and-trade will harm the economy. "The biggest priority is softening the blow on our trade sensitive industries and our consumers. I just want you to know that, that's the goal," Sen. Boxer said.  In response, Harry Alford, president of the National Black Chamber of Commerce, dismissed claims that the government could redistribute revenues from cap-and-trade to "soften the blow" on the poor, the elderly, those on fixed incomes, and consumers.  "Madam Chair, I will do that, I have been around the block a few times.  People are not going to get that refund, it's not going to hit them, people are going to be unemployed, and they are not gonna have any recourse whatsoever, the government will have failed them again."

Inhofe to Kerry: Cap-and-Trade Is Defined As a ‘Tax, and A Great Big One’ - On Sept. 25, 2009, Senator Inhofe responded to remarks made by Senator John Kerry (D-MA), who said, “‘I don't know what 'cap and trade' means. I don't think the average American does,’ adding, ‘This is not a cap-and-trade bill, it's a pollution reduction bill.’" Senator Kerry's remarks come as Senator Kerry and Senator Boxer intend to introduce their cap-and-trade bill on Wednesday, September 30. “I think the best way to help Sen. Kerry define cap-and-trade is to turn to Rep. John Dingell (D-MI), who said that cap-and-trade ‘is a tax, and a great big one,’” Sen. Inhofe said.  “No matter the semantic games employed, or the extent to which Democrats wish to hide the truth from the American people, cap-and-trade will mean more job losses, more pain at the pump, and higher food and electricity prices for consumers.

Treasury Department Analysis Shows Cap-and-Trade Proposal Raises Taxes on American Families  (09/16/09) - Senator Inhofe responded to an economic analysis by the Treasury Department that President Obama's cap-and-trade proposal violates his pledge not to raise taxes on the middle class: "During the campaign, President Obama promised tax relief for the middle class. That was then, this is now: the President's own economic team said his cap-and-trade proposal would cost each family $1,761 per year.  To keep his promise with the middle class, the President should have changed course.  Instead, he eagerly supported cap-and-trade in the House.  And he continues to support it now.  And if President Obama gets his way, middle class families, indeed all families, will pay more for gasoline, food, electricity, and much more.

New Analysis Shows President Obama's Cap and Trade Proposal Will Destroy Jobs, Harm Consumers: On April 28, 2009, Senator Inhofe welcomed new economic analysis by the Coalition for Affordable American Energy (CAAE), a coalition of more than 180 trade associations and the U.S. Chamber of Commerce. The report analyzes the projected costs of the climate provision recently proposed in the Obama Administration's 2010 budget. The study, conducted by Charles River Associates, predicts job losses and increased energy costs, as well as disparate regional impacts.

Inhofe Warns of Costs of Massive $6.7 Trillion 'Climate Bailout' EPW Hearing (2/29/09) Excerpt from openings statement: As you know, no one likes to talk more about climate science than I do.  However with this being the first climate change hearing in the 111^th Congress, and in the midst of a deep financial crisis and recession, I thought I'd start by quoting Ronald Reagan: "There you go again." In these turbulent financial times, rather than opening with climate hearings analyzing the issues that concern Americans, such as how cap-and-trade policies and taxes will affect our energy prices and our bottom line, we are here today to focus once again on speculative computer model predictions of 50 to100 years away of a looming climate catastrophe, and the public health and ecological chaos that will result from man's supposed effect on his climate by the continuing  use of fossil fuels.  Full Committee hearing entitled, "Update on the Latest Global Warming Science."

International Realities

WATCH - EPA's Jackson Confirms EPA Chart Showing No Effect on Climate Without China, India: During a hearing on July 7, 2009 in the Senate Environment and Public Works Committee, EPA Administrator Jackson confirmed an EPA analysis showing that unilateral U.S. action to reduce greenhouse gas emissions would have no effect on climate.  Moreover, when presented with an EPA chart depicting that outcome, Energy Secretary Steven Chu said he disagreed with EPA's analysis. "I believe the central parts of the [EPA] chart are that U.S. action alone will not impact world CO2 levels," Administrator Jackson said.  Sen. James Inhofe (R-Okla.) presented the chart to both Jackson and Secretary Chu, which shows that meaningful emissions reductions cannot occur without aggressive action by China, India, and other developing countries.  "I am encouraged that Administrator Jackson agrees that unilateral action by the U.S. will be all cost for no climate gain," Sen. Inhofe said.  "With China and India recently issuing statements of defiant opposition to mandatory emissions controls, acting alone through the job-killing Waxman-Markey bill would impose severe economic burdens on American consumers, businesses, and families, all without any impact on climate." 

Will China Follow This Time?: A mantra repeated endlessly in the cap-and-trade debate is that unilateral U.S. action on climate change will spur China (and other developing countries) to follow suit.  This mantra is spoken with metronomic regularity, despite China's unequivocal opposition, stated over and over again, to accepting mandatory emission cuts.  Such opposition should be no surprise: China has amassed a long and ignominious record of divergence on issues in which the United States has taken the lead. 

China Wins Big with Waxman-Markey - Inhofe Floor Speech - Says Road to Copenhagen on Collision Course: WASHINGTON, D.C. - U.S. Senator James Inhofe (R-Okla.), Ranking Member of the Senate Environment and Public Works Committee, on June 25, 2009 delivered a Senate floor speech noting that China's resistance to join any international efforts to reduce their carbon emissions will mean any global warming bill signed into law in the US would severely damage the US economy while having a negligible impact on climate.

WSJ Editorial: Carbon Reality, Again It's turning out that the biggest problem with carbon taxes is political reality. Australian Prime Minister Kevin Rudd has just announced he will delay implementing his trademark cap-and-trade emissions trading proposal until at least 2011. Mr. Rudd's March proposal would have imposed total carbon permit costs (taxes) of 11.5 billion Australian dollars (US$8.5 billion) in the first two years, starting in 2010. This would have increased consumer prices by about 1.1% and shaved 0.1% off annual GDP growth until at least 2050, according to Australia's Treasury. Support has fallen among business groups and individuals who earlier professed enthusiasm for Aussie cap and trade. Green gains were negligible; Australia accounts for only 1.5% of global greenhouse gas emissions.

INDIA SAYS, ‘HECK NO, WE WON'T GO': "If the U.S. acts, the rest of the world will follow."  This is a common trope asserted by eco-enthusiasts bent on passing cap-and-trade.   No international agreement is possible, they say, unless the U.S. first assumes the burden of mandatory carbon reductions.  We now hear that the U.S. can gain "leverage" in international negotiations in Copenhagen later this year if EPA makes a finding that greenhouse gas emissions endanger public health and welfare under the Clean Air Act.  Presumably, this means such action will coax China, the world's leading emitter of CO2, and India, the world's third largest CO2 emitter, into accepting binding emissions cuts.  "Unless we show that we are capable and willing to regulate and limit our emissions, we are not going to get an international agreement," said David Bookbinder, the Sierra Club's chief climate counsel.  Similarly, Annie Petsonk, international counsel with the Environmental Defense Fund, said, "To the extent that the endangerment finding pushes that process domestically, that's important for our negotiating partners to know."

Defeat of Cap-and-Trade in the Australian Senate: After his election in 2007, Australian Prime Minister Kevin Rudd fulfilled a campaign promise to ratify the Kyoto Protocol.  Then earlier this year, he proposed a cap-and-trade plan, dubbed the “Carbon Pollution Reduction Scheme,” or CPRS, to reduce Australia’s emissions.  The CPRS requires reductions between a range of 5 and 15 percent below 2000 levels by 2020.  The CPRS covers 75 percent of Australia’s emissions, and auctions 70 percent of allowances, moving to a full auction over time.   The proceeds of the auction would accrue to households to mitigate the costs of the CPRS.  

Warning on Green Jobs

Inhofe-Bond Issue Warning on Green Jobs: On April 27, 2009, Senator Inhofe joined Senator Kit Bond (R-MO), Ranking Member on the Green Jobs and New Economy Subcommittee, to announce a report highlighting the poor performance of taxpayer-funded green jobs programs. The report details a number of misconceptions and exaggerations propagated by green job advocates. In fact, many so-called green jobs pay lower wages, require expensive taxpayer subsidies, and often are created at the expensive of well-paying manufacturing jobs.  

EPW FACT OF THE DAY: GREEN DYSTOPIA: It's a common (green) refrain: pass cap-and-trade legislation to reduce greenhouse gas emissions by 80 percent and the ineluctable result is a growing economy, greater prosperity, and green jobs galore.  "If the American Clean Energy and Security Act were enacted tomorrow," Frances Beinecke, president of NRDC, said, "millions of clean energy jobs would be created, starting right away."  Worried about the drought in capital investment?  How about corporate profits? Beinecke says pass cap-and-trade. "[Waxman-Markey] will unlock large-scale private sector capital investments starting today, saving companies money in the short and long term and boosting the recovery."  Want to encourage technology innovation?  Strengthen energy security?  Restore the balance of trade?  End world hunger?  Enact cap-and-trade, the green unified field theory: "Properly designed legislation," declared Beinecke, "will encourage innovation, enhance America's energy security, foster economic growth, improve our balance of trade, and provide critically needed U.S. leadership on this vital global challenge."

Fact Check: Free Market?:  The centerpiece of Waxman-Markey is a cap-and-trade scheme, but a significant portion of the bill is a liberal litany of mandates, including, but not limited to: a renewable electricity standard (Section 101); performance standards for new coal plants (Section 116); greater efficiency in building codes (Section 201); lighting efficiency standards (211); appliance efficiency standards (Section 212); auto emissions standards (Section 221); and industrial plant energy efficiency standards (Section 241).  Or, as a recent Washington Post editorial put it, the bill “contains regulations on everything from light bulb standards to the specs on hot tubs, and it will reshape America’s economy in dozens of ways that many don’t realize …”

BROKEN WINDOWS AND GREEN JOBS: With all of the talk these days about green jobs—or, more precisely, the Democrats’ version of taxpayer subsidized green jobs—EPW Policy Beat wondered whether they will usher in a “clean energy future.”  They won’t.  We came to this conclusion after reading Henry Hazlitt’s classic book, “Economics in One Lesson.” 

A NET LOSS ON EARTH DAY: As the New York Times recently put it, "No one believes that renewable energy can fully replace what has been lost on the American factory floor..."  Except, of course, President Obama.  Upon closer inspection, one finds that the Times is right: the plant that "was sold and then stopped operations" in 2007 was the Maytag washing machine factory, which employed 1,800 people in a town of 16,000.  Obama today highlighted green jobs at wind energy facilities amidst the rubble of Maytag.  Both would employ 700 workers-no doubt a welcome development for Newton, but it represents a net job loss.  Moreover, workers at the Maytag plant earned $20 an hour with health benefits; workers at the TPI Composites wind turbine facility, across the way from where Obama delivered his speech, would earn $13 an hour.  For the record, this is not the first time Obama has raised an example of green jobs that fell short.

WSJ Editorial: California's 'Green Jobs' Experiment Isn't Going Well (1/31/09) Gov. Arnold Schwarzenegger was all smiles in 2006 when he signed into law the toughest anti-global-warming regulations of any state. Mr. Schwarzenegger and his green supporters boasted that the regulations would steer California into a prosperous era of green jobs, renewable energy, and technological leadership. Instead, since 2007 -- in anticipation of the new mandates -- California has led the nation in job losses.

Inhofe Hill Blog Post: Don't Let Green Job Mandates Push Us into the Red (2/5/09): With the backdrop of a severe recession, President Obama and Congressional Democrats are pitching the ideas that the regulation of greenhouse gases will result in a "green job" boom and have the desirable side-effect of cleaning up the environment. In short, limiting carbon and other greenhouse gas emissions will force Americans to turn to clean energy sources that will employ millions of people. Reality, however, suggests otherwise. In all likelihood, energy bills will rise, manufacturing costs will soar, and there will be an exodus of well-paying jobs.

REPOWERING THE RECESSION: With green jobs being so much in vogue, EPW Policy Beat had occasion to review a recent ad by the estimable "Repower America," a group whose raison d'être is, as Al Gore urged last July, to "repower" the nation with 100 percent clean electricity within ten years. Repower America is a project of the Alliance for Climate Protection, whose chairman of the board is Al Gore. Here are excerpts of the ad as recounted in a press release from the group, followed at intervals by our critique: 

Endangerment Finding - Obama's Backdoor Energy Tax  

WATCH: Inhofe on Kudlow Speaks About Obama Backdoor Energy Tax - The Environmental Protection Agency's (EPA) proposed greenhouse gas rules are meant to intimidate lawmakers into passing climate change legislation, one Republican senator argued Thursday. Sen. Jim Inhofe (R-Okla.), a global warming skeptic and ranking member of the Senate Environment and Public Works committee, said that EPA was unlikely to follow through on its threat to issue new rules to businesses on emissions. Also See Inhofe Statement on EPA's intention to restrict greenhouse gas emissions under the Clean Air Act.

Inhofe Calls EPA's Endangerment Finding a ‘Ticking Time Bomb': Senator Inhofe spoke out on the Senate Floor on May 1, 2009 about the Obama Administration's recent announcement of an endangerment finding for carbon dioxide and five other greenhouse gases. Senator Inhofe calls the decision a "ticking time bomb" that presents "policymakers with a false choice: Use an outdated, ill equipped and economically disastrous option under the Clean Air Act, or pick another bad option-cap-and-trade-that commits us to requirements for which affordable and reliable technology does not exist." 

WSJ Editorial: Reckless 'Endangerment': The Obama EPA plays 'Dirty Harry' on cap and trade: President Obama's global warming agenda has been losing support in Congress, but why let an irritant like democratic consent interfere with saving the world? So last Friday the Environmental Protection Agency decided to put a gun to the head of Congress and play cap-and-trade roulette with the U.S. economy. The pistol comes in the form of a ruling that carbon dioxide is a dangerous pollutant that threatens the public and therefore must be regulated under the 1970 Clean Air Act. This so-called "endangerment finding" sets the clock ticking on a vast array of taxes and regulation that EPA will have the power to impose across the economy, and all with little or no political debate.

‘SCARE TACTICS': In their comments on EPA's Advanced Notice of Proposed Rulemaking (ANPR) on greenhouse gas regulation under the Clean Air Act, both groups did ask EPA to regulate such sources; moreover, both groups asserted that EPA is required by law to apply the PSD program to sources emitting above 100 or 250 tons per year.  No exceptions.  Scary indeed.

Inhofe Floor Speech: Trial Attorney's Dream: Another Attempt to Regulate Greenhouse Gases without Public Debate: Senator Inhofe delivered a March 3, 2009 speaking out against back-handed attempts to regulate greenhouse gases without transparency of public debate: Once again we are faced with a back-handed attempt to regulate greenhouse gases without the transparency of public debate.  Section 429 of the omnibus appropriations bill currently includes yet another Congressional handout to extreme environmental interests and the trial bar.  This rider is clearly an attempt to legislate on a spending bill - just the sort of bad habit that Democrats in Congress and the White House promised to give up during the last election. 

Republicans Offer "All of the Above" Energy Plan

Politico: Inhofe Op-Ed Put Nuclear Energy in the Energy Mix - July 13, 2009 - Listen carefully in Washington, and almost everyone agrees that nuclear energy must be a part of our future domestic energy mix, and for good reason: Nuclear energy is the world's largest source of carbon-free energy, generating over 70 percent of our emission-free electricity here in the U.S. Nuclear energy is a clean, safe, reliable and domestic source of affordable energy that has created 15,000 new jobs in the last year.  The need to grow our domestic energy supply is clear. The Energy Information Administration projects that our demand for electricity will increase by 26 percent by the year 2030, requiring nearly 260 gigawatts of new electricity generation. Every source will need to grow and produce more energy to meet that demand. Curtis Frasier, executive vice president of Americas Shell Gas & Power, recently warned that the recession could be masking a global energy shortage: "When the economy returns, we're going to be back to the energy crisis," he said. "Nothing has been done to solve that crisis. We've got a huge mountain to climb." 

Inhofe Applauds Bipartisan Support for Natural Gas Vehicles - U.S. Senator James Inhofe (R-Okla.), Ranking Member of the Senate Environment and Public Works Committee, applauded Senators Robert Menendez, Orrin Hatch, and Harry Reid for introducing legislation today supporting vehicles that run on natural gas. On June 25, 2009, Senator Inhofe joined Sen. Mark Pryor (D-Ark.) to introduce bipartisan legislation that seeks to increase the production and sale of natural gas and propane vehicles and develop natural gas and propane vehicle infrastructure across the country.  The Pryor-Inhofe bill would help lower fuel costs for consumers, reduce America's dependence on foreign oil, and strengthen the economy in regions rich in natural gas.  "I am pleased to see that a growing number of my colleagues, Republican and Democrat, support legislation that promotes vehicles that run on clean natural gas," Senator Inhofe said. "The promise of natural gas and propane as a mainstream transportation fuel is achievable today -- not 15 or 20 years from now.

Inhofe-Pryor Seek Increased Use of Natural Gas and Propane Vehicles - WASHINGTON D.C. - U.S. Sen. Jim Inhofe (R-Okla.), Ranking Member of the Senate Environment and Public Works Committee, joined Sen. Mark Pryor (D-Ark.) today to introduce bi-partisan legislation that seeks to increase the production and sale of natural gas and propane vehicles and develop natural gas and propane vehicle infrastructure across the country.  The bill would help reduce the burden of fuel costs for consumers, encourage the development of more environmentally-friendly sources of energy, reduce America's dependence on foreign oil, and strengthen the economy in regions rich in natural gas. 

Heritage Foundry Blog: Inhofe's Road to Clean, Affordable Energy: U.S. Senator James Inhofe (R-OK), has been among the most effective opposition voices against cap and trade global warming legislation in recent years and his rebuttal to Al Gore's global warming assertions are spot on. Yet, the Senator from Oklahoma is an advocate for a clean environment. It just so happens that he recognizes that nuclear energy is the best way to provide American's with affordable, emissions-free electricity. And that was the subject of a speech that the Ranking Member of the Senate Environment and Public Works Committee delivered on the floor of the United States Senate yesterday. While hearing global warming skepticism on Capitol Hill is unusual enough, Senator Inhofe took his independent voice a step further by giving an entire speech on nuclear energy (or energy policy in general) without advocating corporate handouts, subsidies, or mandates. Senator Inhofe instead chose to focus on the benefits of nuclear and how the nation might better address some of the regulatory hurdles that unnecessarily raise costs and give rise to the need for subsidies to begin with.

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