As the Senate prepares to take up the House-passed climate bill – variously known as climate control, cap-and-trade, or energy taxation – the hurdles to passage appear impassible.
One hurdle is the forbidding price tag of cap-and-trade legislation. A new Government Accountability Office (GAO) study finds that government at all levels – federal, state and local – will have to raise $16.6 billion in added revenue to buy carbon allowances if cap-and-trade becomes law.
Then there is the cost to tax payers. According to some estimates, cap-and-trade could impose a tax of $135 billion per year on the nation. The Congressional Budget Office estimates that reducing the level of CO2 to 15 percent less than the emissions of 2005 would raise an average American household cost of living by $1,600 annually. Brian Johnson, federal affairs manger for Americans for Tax Reform, explained that state government would likely have to raise their taxes to buy carbon permits. “They’re going to have to increase direct taxes on their citizens,” Johnson told CNSNews.com. Adele Morris, project director of climate and energy at the Brookings Institution, told CNSNews.com that to cover high energy costs, the federal government “would potentially have to appropriate added funds.”
Further complicating passage is that the political ground for cap-and-trade has become infertile. According to pollster Zogby, nearly sixty percent of the public opposes the legislation. Even Democrats have become disenchanted. For instance, ten moderate Senate Democrats from states heavily dependent on coal and manufacturing wrote President Obama in early August stating that they would not support any climate change bill that did not protect American industries from countries that didn’t have similar climate controls.
The ten Democratic Senators, who included Wisconsin’s Russell Feingold and Minnesota’s Al Franken, stressed that “any climate change legislation must prevent the export of jobs and related greenhouse gas emissions in countries that fail to take actions to combat the threat of global warming comparable to those taken by the United States.” Without support from Senators from coal-producing states, passage of cap-and-trade is unlikely. In addition, ten to 15 fiscally conservative “blue dog” Democrats are not on board, according to Marc Morano, executive editor of Climate Depot.
Some Democrats have even gone on the offensive against cap-and-trade. The legislation to limit CO2 emissions has “gotten out of control” and should be scaled back, according to Colorado’s former Democratic Senator. Timothy Wirth, a climate-change negotiator during the Clinton administration. As Wirth sees it, “the Republicans are right” to call the proposed legislation “a cap-and-tax bill.” Wirth’s opposition to cap-and-trade is all the more notable because he helped create an emissions-trading market some years ago that cut sulfur-dioxide pollution that causes acid rain.
Not least, there are concerns about the possible economic fallout of cap-and-trade. Testifying before the Ways and Means Committee in March, American Council for Capital Formation Chief Economist Margo Thorning urged lawmakers to weigh the minimal environmental benefits of cap-and-trade policies against their adverse impact on the U.S. economy, job growth and competitiveness. Thorning pointed to an analysis conducted jointly with the National Association of Manufacturers. It showed significant energy price increases by 2030. The study also showed that GDP would decline up to 2.7 percent by 2030. She said reductions in total U.S. employment (net of new jobs that may be created in “green” industries) by 1.2 million to 1.8 million jobs in 2020 and by as many as 4.1 million in 2030. She said results of modeling efforts from the Massachusetts Institute of Technology and others show similar results. Similarly dramatic declines in U.S. employment and GDP are forecast by the American Council for Capital Formation and the National Association of Manufacturers.
In the face of growing skepticism over cap-and-trade, the Obama administration is undeterred. Shortly after the narrow House vote on cap-and-trade, the president said that he hoped it would prod action by the Senate. He predicted that the legislation could make renewable energy “a driver of economic growth.” Following the president’s political script, Secretary of Energy Steven Chu has called climate change the greatest challenge facing science.
How to explain the administration’s tone-deafness on this issue? A look at the Environmental Protection Agency supplies one answer. In Obama’s EPA, disagreement is verboten when it comes to the dogma of climate change. Indeed, one climate change dissenter recently found out that the ideology is not to be questioned. EPA Senior Analyst Alan Carlin was told to clam up when his research contradicted apocalyptic climate scenarios. In a 98-page analysis, reported by Fox News, Carlin argued that the information that the EPA was using to back global warming was out of date and that global temperatures have declined, not risen. Carlin said that the EPA has suppressed his report and that his boss, Al McGartland, appeared to be pressured into reassigning him. Carlin said he is concerned that he’s seeing “science being decided at the presidential level.” Senator James Inhofe (R-Okla) ranking member of the Committee on Environment and Public Works, has ordered an investigation. Inhofe added that the landmark House bill “will be dead on arrival” when it comes to the Senate.
That may come as a shock to the administration. Seemingly indifferent to the fading fortunes of its favored legislation, and intolerant of dissent on climate change issues, the administration may be in for a rude awakening when cap-and-trade finally comes to a Senate vote.