New Information Sheds Light on Cost of Cap-and-Trade

According to brand new numbers released by the Obama administration, American families could face the equivalent of a 15 percent increase in income taxes, or an additional incurred cost of $1,761 per family per year, because of the president’s plan to attack the farcical crisis of climate change through a cap-and-trade system.

And even those numbers are misleading. These are only direct energy costs, and the White House’s number is even higher than the number proffered by The Heritage Foundation a few months ago. Additional costs will also increase, as businesses of every sort will be passing along its own increased energy costs onto consumers — that means, as consumers face increased electricity bills at home, they may also face higher prices for everyday food items, for electronics, for gasoline, for clothing, and for everything else at the consumer level. $1,761, friends and neighbors, is just the tip of the iceberg.

As a reminder, here are the projections I reported here at America’s Right back on May 18, 2009, in a piece entitled The Exponentially Increasing Costs of a Manufactured Environmental Crisis:

For average Americans, [Texas Congressman Joe] 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.

Now, consider that perhaps the easiest possible number to predict–the increase in direct energy costs for the average American family–has come out higher than the projection by Heritage, and it makes you wonder how much higher the other projected costs will be. Furthermore, that this is all projections being done by the government should underscore exactly how much of a low-ball number we’re seeing. Remember, folks, that in 1966, the House Ways and Means Committee estimated that Medicare would only cost $12 billion yearly by 1991. When it comes to picking winners and projecting costs, the government doesn’t exactly set records for accuracy.

My worry is that the ongoing debate over health care has caused people to forget about the other mechanism by which our federal government can insert itself into nearly each and every aspect of our daily lives. Remember, folks, that the Waxman-Markey bill has already passed the House.

In order to fight this thing, we need to frame the legislation for what it is–an enormous tax on the middle class, a tax that could permeate everything–and remind people of what it could mean in terms of governmental size, scope and influence. We must not only stand up and say “no,” but employ the Doctrine of Constructive Obstrucutionism: stand up, say “no,” and get on the record with viable alternatives.

I had thought, for a while now, that this item was dead in the water. As it turns out, I was wrong, and we need to be on the lookout for this secondary death knell to the American economy.



  1. Gail B says:

    As far as I am concerned, the liberal progressive Democrats shot their wad when they passed the absurdity widely referred to as the Stimulus Bill.

    Each American should each tell his or her Congressional representatives to vote NO on EVERYTHING from here on out, because everything they're proposing is going to either raise the national debt (we've already passed the point in time for the deficit) and thus raise taxes, cost of living, and so on. Seniors will not even get a cost-of-living increase, but Pelosi's RATS are being taken care of, right along with Florida's TURTLES!

  2. Dee says:

    The other item that is not receiving much media coverage is what is happening in Venezuala. They want to produce nuclear power and Russia is willing to help them. Of course, they state that they only want to use it for peaceful means. Is anyone worried about this?

  3. Rix says:

    Rampant tribalism again. I'll quote myself: "…at any cost to the foraging grounds…"

  4. Claudia says:

    I was reading about the budding alliance between Chavex, Iran and Russia this morning and YES, I AM VERY CONERNED ABOUT IT!!!

    Also, as a senior, who is dependent on certain monies to get by, and theya re not giving us an increas this year and EVERYTHING is going up daily, I don't know how I will survive in the winter, with not enough heat….. typical temps where I am are about 28 degrees in the daytime and go down to about 0 to minus 19 at night, and IF I DON'T HAVE HEAT, how will my home stay warm and my pipes not break because of frozen water.

  5. Gail B says:

    Deleted comment was a duplicate of the one above it.

    Instead, I want to add that this administration/regime has an internal sickness that is beginning to cause me cronic nausea from worrying about our future.

  6. Anonymous says:

    More shocking, though not surprising numbers with regard to how screwed we will all be. All part of obama's master plan….

  7. Gail B says:

    Heat from light bulbs near the pipes will keep them from freezing. There is also heat tape.

    Check into the Amish "fireplaces" that heat for about 8 cents a day. (Click on my name in the comment and send me an email).

    My civil engineering friend from high school cut his heating bill in third last winter.

  8. Anonymous says:

    Claudia: Don't worry…WE WILL HELP YOU! Just say the word, and I will help you in any way I can.

    Gail B: Well, look at it this way: Your nausea will help your watchband not get too tight! Hee hee!

    Lisa in TX

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