The Exponentially Increasing Costs of a Manufactured Environmental Crisis

Cap and trade looms on Capitol Hill as Democrats, Republicans square off over global warming, American energy, and a record-setting punitive tax marketed as environmental salvation

By Jeff Schreiber
America’s Right

Planet Earth may be cooling, but talk of energy, global warming and taxes is certainly heating up the House of Representatives.

Mark-up on the American Clean Energy and Security Act of 2009, the cap-and-trade legislation proposed by Democrat Congressmen Henry Waxman and Ed Markey, began today. For those unfamiliar with the legislation or with the basic idea behind it, cap-and-trade essentially places a pecuniary value on emissions of carbon dioxide, which the Obama administration and liberal hippies everywhere insist is destroying the very fabric of our planet and civilization.

Under the system proposed in Waxman and Markey’s thousand-page bill, the federal government, based upon assessments made by some bureaucracy or another, would issue a limited number of emissions permits which utilities and other businesses which emit CO2 can purchase and trade with one another. Companies and industries forced to weather an exponentially increased cost of doing business will inevitably pass that increased cost on to consumers, resulting in what President Obama admitted would be “skyrocketing” energy costs. Essentially, from the president who promised not to raise a single tax on the middle class, every American would see a large increase in the price of electricity, gasoline, and every single product which requires the expenditure of energy to harvest, produce, package, manufacture, distribute or deliver — in other words, everything.

Texas Republican Rep. Joe Barton, ranking Republican on the House Energy and Commerce Committee, wrote last week that “[n]obody understands exactly what the legislation means in dollars and cents” but notes that the standards set by the legislation would be equivalent to the amount of carbon emissions by Americans in 1875. Current CO2 emissions, Barton says, is where Waxman and Markey want America to be . . . in 2050.

Almost as troubling as the Democrats’ hope to drag America back to the late 19th Century is the cost associated with doing so. Barton notes that even the Congressional Budget Office is hesitating to provide actual cost estimates on the legislation until knowing more about the cost of the emissions permits — but as Barton pointed out today, estimates on the costs associated with permitting are still up in the air:

We do know from what we’ve gleaned and the fact that the guts of the bill are now public that the costs are going to be astronomical. Now, why do I say that? About 7 billion metric tons of man-made CO2 are emitted each year, at least last year, by the U.S. economy. I don’t know what the substitute that’s going to be introduced actually uses as its baseline, and it may not be that baseline, but supposedly 85 percent of the allowances have been given away. Well, that leaves 15 percent. Fifteen percent of 7 billion is about 1.5 billion metric tons.

We don’t know what the cost of these tons is going to be. Your manager’s amendment uses a number $10 a metric ton. I’ve seen estimates as high as $200 a ton. EPA used $20 a ton. Most neutral economists use $50 to $100 a ton. So pick your number. Even at $10 a ton, that’s $15 billion a year. If you go up to $200 a ton, that’s $300 billion per year. To put that number in perspective, Mr. Chairman, the entire revenue generated by the electricity network of our country in 2007 was about $400 billion. So, no matter what number you use, you’re going to put a significant cost on the American economy.

For average Americans, Barton’s office estimates that Americans can expect their electricity bills to increase by 77 to 129 percent, the cost of filling at the pump to increase by 60 to 144 percent, and the price of home heating oil and natural gas to nearly double.

An analysis released today by The Heritage Foundation provides numbers which may be a little more precise, but equally as dismal. Look for an immediate $200 billion loss in gross domestic product, the conservative think-tank contends, followed by a recurring average loss of $380 billion per year. Even worse, the analysis states, “[a]s the economy recovers and the caps tighten, the detrimental effect of cap and trade gets more and more severe. In the worst years, GDP losses exceed $700 billion per year.”

According to Heritage, the downhill consequences of the Waxman-Markey legislation would be economically devastating:

  • The typical family of four will see its direct energy costs rise by over $1,500 per year.
  • Pain at the electric meter will cause consumers to reduce electricity consumption by 36 percent. Even with this cutback, the electric bill for a family of four will be $754 more that year and $12,200 more in total from 2012 to 2035.
  • The higher gasoline prices will have forced households to cut consumption by 15 percent, but a family of four will still pay $596 more that year and $7,500 more between 2012 and 2035.
  • In total, for the years 2012-2035, a family of four will see its direct energy costs rise by $22,800. These inflation-adjusted numbers do not include the indirect energy costs consumers will pay as producers are forced to raise the price of their products to reflect the higher costs of production. Nor does the $22,800 include the higher expenditure for such things as more energy-efficient cars and appliances or the disutility of driving smaller, less safe vehicles or the discomfort of using less heating and cooling.
  • As the economy adjusts to shrinking GDP and rising energy prices, employment will take a big hit. On average, employment is lower by 1,105,000 jobs. In some years cap and trade reduces employment by nearly 2.5 million jobs.
  • The negative economic impacts accumulate, and the national debt is no exception: Waxman-Markey will drive up the national debt 29 percent by 2035. This is 26 percent above what it would be without the legislation and represents an additional $29,150 per person, or $116,600 for a family of four. To reiterate, these burdens come after adjusting for inflation and are in addition to the $450,000 per family of federal debt that will accrue over this period even without cap and trade.


Liberals and granola-munching, patchouli-stinking hippies everywhere will be quick to argue the benefits of such legislation, relying upon the assumption that consumers will modify their own consumption and behavior because of higher prices for energy. Essentially, the lefties insist that the government will set the caps on pollution and, because of the increased price of doing business which will trickle down to consumers in the form of increased energy costs, eventually consumers will bring their consumption down enough so as to be consistent with the allotment set forth by the cap.

So, essentially, they set forth the desired emissions amount–in this case, consistent with America circa 1875–and then tax the bejeezus out of the American people and American business and industry in order to get there. And if consumption doesn’t naturally decrease to those levels because of the increased costs (or if families and businesses everywhere don’t go bankrupt in the process), what’s next?


From what presidential candidate Barack Obama said at a campaign stop in Oregon a year ago this past Saturday, it’s government control. After all, we all cannot drive our SUVs and eat as much as we want and keep our homes on 72 degrees at all times, and then just expect that other countries are going to be okay with it. Isn’t that right, Mr. President?

Regardless, Barton insists that any such benefit to the environment would be negligible. According to scientists who support the legislation, Barton said today, the environmental benefit would be “less than one degree Fahrenheit” over the next century. “We know the cost is significant,” he said, “We know the environmental benefit is basically nonexistent.”

The Heritage Foundation’s report today provided a similar–if not more telling–cost-benefit analysis of the Waxman-Markey bill (emphasis mine):

Is all of this economic pain justified by gains against global warming? Waxman-Markey raises energy prices by 55-90 percent. These higher energy prices push unemployment up by 1,105,000 jobs on average, with peaks over 2,479,000. In aggregate, GDP drops by over $9.6 trillion. The next generation will inherit a federal debt pumped up by $29,150 per person. All of these costs accrue in the first 25 years of a 90-year program that, as calculated by climatologists, will lower temperatures by only hundredths of a degree in 2050 and no more than two-tenths of a degree at the end of the century.

The impact of Waxman-Markey on the next generation of families is $1,500 per year in higher energy costs, over $100,000 of additional federal debt (above and beyond the unconscionable increases already scheduled), a weaker economy, and more unemployment. Furthermore, the recently proposed modifications to Waxman-Markey only make these problems worse: By devising a less-efficient pattern of government expenditures, this new draft would more than offset the gains from the proposed slight easing of targeted emissions reductions for 2020.

Given this cost-benefit analysis among others, and surely due to the modicum of common sense people insist exist in the deep recesses of the liberal soul, even many of Waxman and Markey’s Democrat colleagues are becoming wary of the effect such legislation would have upon their constituents. Several are facing skeptical business owners and boards of directors back home, wary of how extra costs could turn into increased unemployment. Barton even quoted one Democrat on the Energy and Commerce Committee as asking former Vice President Al Gore, during a recent hearing, what he should tell single parents and struggling constutents in his district about the costs associated with cap and trade — Gore, from what Barton said, offered no response.

Certainly, Democrats who travel to Capitol Hill from industry-heavy districts–and presumably must return there on holidays and occasional weekends as elections draw closer–must have misgivings about signing off on legislation which would cause further job loss and financial burdens at a time when America and Americans are already struggling. Apparently, discontent among fellow Democrats is so palpable that Waxman was forced to include various temporary protections and allocation provisions in order to woo those colleagues, provisions and protections which were kept secret until last Friday. From a piece published today by Christopher Horner at Human Events:

So on Friday came the details of Waxman’s “allowance allocation,” which is what he calls the ration coupons. That’s right: we’re all seven again, and the state is our Mommy, meting out our yearly energy allowance. Waxman released a two-page memo to describe the now 1,000 page bill, which is apparently how many pages it takes to hide the biggest tax increase in U.S. history and hand out favors to the Al Gore crowd.

In the Democrats’ now-commonplace Orwellian mode, the two-page memo was full of “protections” the bill offers, laid out in boldface type: “Protection from electricity price increases,” “Protection from natural gas price increases,” “Protection from home heating oil price increases,” “Protection of low- and moderate-income households.” Then comes “Transition assistance for industry,” comprised of “Protection for energy-intensive, trade-exposed industries” and “Protection for domestic energy production.”

That’s an awful lot of protection Waxman’s selling, and it begs the question: from what? His bill, of course. For nearly every sector that it targets with its taxation and “investment” provisions, the bill claims as a marketing ploy to have offered protection. These temporary, select deals were in return for allowing certain provisions of the bill to be designed according to the specifications of particular members of each of those targeted groups — as brazenly admitted by Waxman in the first draft of the bill’s “Findings” section.

Allegations of such collusion between policymakers and the Bush administration by the same Henry Waxman led him to launch investigations. Don’t expect any here.

Now this protection isn’t forever, mind you — just for a few years, in order to neuter opposition or provide cover for those whom he needed to vote for the scheme.

So here we are, about to bring the American economy to a standstill and forcing an exponential increase in the cost of living upon an American populace already stretched to the max, all for a benefit of less than a single degree in a climate already in the middle of a cooling trend, all motivated by unproven scientific conjecture motivated more by leftist ideology than environmental concern.

Henry Waxman and Ed Markey’s legislation is nothing short of an absolute nightmare. And, for a while, I worried that the Republican response would not be enough.

Late last week, my sources told me that Barton had approached House GOP leadership with what he called a “pro-energy alternative” to be proposed during the mark-up. Among other things, the plan required all new coal plants to utilize “best available control technologies” to mitigate carbon dioxide emissions, essentially admitting that CO2 should be treated like and regulated as a man-made pollutant, and keeping in line with Massachusetts v. Environmental Protection Agency, the 2007 decision in which the U.S. Supreme Court’s held as much. It wouldn’t take a genius to understand the effects such a concession, in the name of an alternative proposed by a Republican no less, would have on the coal industry. According to my source, House GOP leadership would not permit Barton to associate the committee with the alternative plan barring more consensus, essentially requiring that the plan be reworked.

And reworked it was. This afternoon, Barton detailed his alternative plan at a press conference. While I still haven’t set eyes upon the actual language of the plan–and likely wouldn’t be able to decipher it anyway–the summary of the proposal shows more good than bad. Chief among the latter is the idea that congress would be permitted to preempt state authority to regulate certain fuels and gases, as well as some carbon-capture-related language which could be inferred as to constitute the aforementioned “best available control technologies” provision. Nevertheless, the highlights of the summary are plentiful:

  • Extends tax credits and incentives for energy efficient appliances and upgrades to existing homes.
  • Promotes development of nuclear power facilities
  • Carbon dioxide must be specifically excluded from the list of “air pollutants” as defined by the Clean Air Act, effectively overturning, through legislation, Massachusetts v. EPA.
  • Outlines an “all of the above” approach to energy in America, promoting a commitment to expand use of nuclear resources, advocating the exploration of the Outer Continental Shelf, development of the Arctic Coastal Plain, and progression toward accessing oil shale resources.
  • Takes a free market approach to conservation, extending tax incentives for alternative fuel vehicles and, most importantly, providing a $500 million prize for the first U.S. automobile manufacturer to produce and sell 50,000 economically feasible vehicles with efficiency standards of 100 miles-per-gallon.

The success or failure of Waxman and Markey’s bill versus alternatives put forth by Joe Barton and others, including Georgia Congressman Tom Price, depends solely upon the people of America. Democrats being counted upon by Henry Waxman who are nonetheless on the fence about the effect that voting “yea” on such legislation would have on their political future must be reminded that their constituents cannot absorb a needless increase in the cost of living in the name of marginal gains against the trumped-up threat presented by a geopolitical movement masquarading as environmental activism.

Throughout all of this, it’s important to remember that this isn’t about the environment for the Democrats. It is about the transfer of wealth, and the forced end of American exceptionalism. American business and industry, and the jobs and revenue that come along with it, will be forced from American shores to nations which place no such counterproductive regulations on industry. American families will struggle, as increasing prices at the pump or in monthly energy bills could put people like myself and my wife–who struggle each and every month to keep in the black instead of the red–over the top when it comes to financial sustainability. Increased fuel costs will adversely affect the shipping industry, which in turn will adversely affect anyone who purchases clothes, appliances, paper goods or food.

And all in the name of one degree over a span of one hundred years — a single, monumentally expensive, endlessly insigificant degree deemed so important by people so egotistical as to think they know, above anybody else, exactly how warm or cold our planet was designed to be.

Share

Comments

  1. Anonymous says:

    “…people so egotistical as to think they know, above anybody else, exactly how warm or cold our planet was designed to be.”

    I have always said this. They have set themselves up as God.

    But then again, who said anything about “designed?” since most of that crowd holds to the cosmic accident theory.

    BTW, someone should buy Mr. Waxman some noseplugs in case he has to be out on a rainy day.

  2. goddessdivine says:

    This whole topic just makes my blood boil. It is so unreal how out of touch these people are. I think of the folks like my sister in Vegas who pay upwards of about $500/mo in the summer just to keep their home at around 77. They can’t afford a huge hike in their bill.

    It seems more like ‘crap and trade’.

  3. hockeymom120 says:

    wow … great article, jeff … everyone should post this everywhere … i’m sending it to friends and putting it up on the mommy forum i visit. this is the kind of thing that goes past democrat or republicans.

  4. Gail B says:

    Perhaps someone can answer a question for me:

    If the environment, healthcare, cap-and-trade, and on and on, were so all-fired important, why didn’t Obama work on them FIRST, instead of establishing an unsustainable national debt? All this stuff he’s going to try to push through–there’s no way the American citizens are going to be able to afford it. And, O has said that there will be inflation because of all the worthless money being printed, that the electric bills will go sky high, and that he’s pushing for regulation of about everything he can think of.

    He is not trying to boost the economy; he’s trying to make EVERYBODY dependent upon government–socialism.

    I’m not afraid of dirty air. I’m quite happy with my water. My automobile does not have excessive exhaust.

    I am afraid of everything that the liberal Democrats offer in a bill.

    Now. I’m sleepy. Jeff, I’ll give your article a proper reading in the morning. I know it will be another excellent piece of writing and full of good information.

  5. tm says:

    Another great piece.
    Question: Who would make money off of this?
    Answer: If you want to know who will make money off this look no further than Goldman Sachs. They want to run the carbon trading market. I could see a GSE getting involved run by the same types as Fannie and Freddie.
    And we all know how well that “all” worked out.

  6. Anonymous says:

    What are the odds of having this legislation reversed if Republicans/conservatives can take back the White House? Even that, though, seems a remote possibility, since Obamabotics and friends are in the process of ‘rigging’ the electorate with their seizure of the census and the coming push for amnesty. I don’t really have any hope that we’ll ever be able to take back the White House. What we’re witnessing is, quite literally, organized crime on a legitimized, national scale.

  7. THE JAWS OF LIES says:

    I’ll put my faith in God, not Al Gore, thank you.

  8. Anonymous says:

    OK, we all know what’s going on. How do we get the word out to those who don’t hang out in places like this? Is Glenn Beck the only voice on TV that gets it? My kid’s school shows Inconvenient Truth at lunch. The Limits to Growth crowd never went away, just into hiding, and now they are ready for paybacks.

  9. Gail B says:

    Neal Boortz was talking about the Waxman/Markey bill this morning. He makes a lot of sense when he gets mad! He was really worked up over this one.

    He said that scientists would “forget” to put a component into the computer models–giving the desired effect. He said that when all the information is put in, the computer models show that when the level of CO2 has been low, there was a bit of an ice age.

    What happens when it’s too cold to grow crops? People get hungry. I had just waked up when he was discussing it, but he mentioned that those in prison ATE new prisoners ALIVE (I didn’t get where this happened or when).

    He also mentioned that the sun’s activity lately has been quiet. When sunspots occur, the earth’s atmosphere is heated. I just read in a NASA story that when the sun begins its activity with sunspots again, the earth’s atmosphere will expand from the warmth and slow down the Hubble Space Telescope. It will fall in about 2025.

    BTW, we’ll see the new pictures from Hubble in September. They have to (bottom line) gradually put things into operation and fine tune it first, to avoid an electrical disaster.

    And, a week or so ago I heard that the Waxman/Markey bill will not make it out of the House anyway. Remember, those Representatives want to hold onto their jobs. A Democratic administration that causes an astronomical rise in our cost of living will not survive. People are waking up to the fact that this is not the change We the People had in mind!

    Great analysis, Jeff! Right on spot, as usual. (Just your ordinary, everyday EXCELLENCE!)

  10. mdb says:

    This cap and trade scheme is unusually transparent for politics & is the big reason why I'm baffled that anybody supports it. The logic seems to just fall in you lap. Consider the following.

    1) The government imposes emissions caps beyond which businesses must pay for the right to emit. The immediate reaction of industry is to either pass on the cost or reduce output. A combination of the 2 reactions lead to higher cost for the consumer and "tax" revenue for the government.

    2) Proponents and opponents alike agree that the scheme does nothing for the environment. If it were a simple cap, it would at least pay lip service to being "green", but cap & trade is just a way to tax industry (which is passed to the consumer). Even as an "incentive" program to use less energy, it fails to have significant impact on the environment according to it's supporters.

    3) So, if there is no "green" effect & everybody know it, what is the end result? More tax revenue for the government. It's plain as day that this is a consumption tax on par with Tea Acts, Sugar Acts, etc. That is why I can't believe anybody, including the Al Gore faithful, actually supports this. I could at least understand somebody supporting a cap system, but this is just a big lie.

    BTW – At some point in the last few years, I had submitted a comment on the whitehouse.gov website & had to register to do so. Last week, I received an email from "Obama" informing me of the importance of the upcoming healthcare debate & that the white house would be using the whitehouse.gov mailing list to keep people better informed of such issues in the future. While, in theory, this is not a bad idea, the email was not an "informative" letter, but rather a "propaganda" piece espousing the administrations side of things. I immediately thought "this is nothing but political spam". Isn't it illegal to use government resources for campaign purposes? This sounds like a big gray area, but it sure sounds like the admin is using gov resources paid for with my tax dollars to promote it's party's ideas. I unsubscribed immediately since that last thing I need is white house spam.

  11. RANGE... 300yards says:

    Bring it on Congress, this would trigger an Armageddon of a revolt, which I am in a mood for anyway. Lock & Load patriots.

  12. Gail B says:

    Just read an interesting post on ResistNet.com — (quote)

    If the GOP is looking for a new leader, I suggest a challenge. Over the next 12 months the man or woman who fights the hardest and achieves the most result in removing a Usurper from our presidency, and Protecting our Constitutional Rights in this country, wins the GOP nomination as presidential candidate. Let those who will achieve succeed!! Let “us” see what “you” are made of!! The winner has my vote! (end quote)

    I’m all FOR that!

  13. CFL BULBS SUCK says:

    My title says it ALL.

  14. I Beam says:

    I have no doubt that the looser representatives from my party will cave

  15. Rix says:

    Looks like my comment regarding Weimar Republic was not posted. Why, Jeff? Guess I’ll have to rephrase and repost it until the idea sinks in.

  16. JEFF SCHREIBER says:

    Rix — I didn’t see any such comment. I deleted a number of comments today and yesterday that suggested bodily harm upon high-ranking government officials, but nothing on Weimar.

  17. Rix says:

    Then I’m glad that my post fell to a computer glitch and not a censor’s stylus. Emotional outbursts aside, two main points were stressed in it: a comparison of current political predicament in USA with that of Weimar Republic, and a repeated suggestion to organize a mass refusal to pay federal taxes. These points will likely repeat in my future comments in all applicable threads, so there’s no benefit in reposting it here.

  18. CAL says:

    Thanks Jeff for this thorough and excellent article! People need to understand what is at stake here and this is a perfect piece to which to refer.

Trackbacks

  1. [...] forced erosion of American exceptionalism than it is about saving the environment or addressing the increasingly costly manufactured crisis known as “climate change,” this bill is just another example of Democrats looking to increase the cost of doing business in [...]

  2. [...] cap-and-trade legislation which would cause the average American family’s electricity bill to increase by 77 to 129 percent, the cost of filling at the pump to increase by 60 to 144 percent, the price of home heating oil [...]

Speak Your Mind

*