Cap-And-Trade Policy and the Effect on the Economy

Cap-And-Trade Policy: Important Step or Political Agenda?

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Cap-And-Trade Policy:

The Validity of Climate Change

You've got to buy into the whole global warming routine before you accept the idea of a cap-and-trade policy. That's a big hurdle. You've got to believe pretty much that the world is going to come pretty close to coming to an end, if we don't immediately stop emitting carbon. And one of the ways global warming activists want to get that done is they want to institute government controlled cap and trade program.

We are old enough to remember the threat of a global ice age. No, we didn't live through the ice age -- I just remember when the front cover of Newsweek magazine had us all convinced that the world was going to freeze to death and it was all our fault. Because we have been doing public policy since the Ice Age, we also know how these amazing scientific discoveries always seem to be driven by a quest for research dollars, foundation dollars, and ultimately tax dollars. In other words, there are two sides to the global warming debate.

More information and arguments against global warming, here.

What is Cap and Trade?

The cap-and-trade policy advocated for by climate change activists is kind of like setting up a child's board-game: A business that emits carbon has got to do something about that or they are going to be taxed big time. So what the companies are able to buy credits to offset their carbon emissions and trade them around. So the government will set up how much carbon's allowed to come out. If you're a big carbon emitter, you've got to pay; if you're a little carbon emitter, you can trade.

Taxes and Unprecedented Government Regulation

A tax by any other name is a tax. You can call it "cap and trade" and drape it with all the green political speech you like but in the end - it's still a tax.

At an event in the historic town of Hanoverton, Ohio on July 3, 2009, Robert E. Murray, Founder, Chairman, President, and CEO of Murray Energy Corporation explained that the cap and trade would "put a $2 trillion tax over 8 years on 40 states."

"It is the largest tax in the history of the world," said an emotional Murray. "I just came up from my mines. I can't look my employees in their faces. I can hardly look them in the eye, because I can about tell you the year that they are going to be put in the unemployment line and their families destroyed."

The American Clean Energy And Security Act of 2009, all 900+ pages of it, is frightening. This piece of legislation is so exhaustive that it actually gets down to discussions about water coolers, roof tiles, and urinals. Congress is writing legislation that is so invasive into our lives that it will dictate the kinds of daily products that we use as it relates to energy consumption. All in the name of controlling the use of energy. All which are going to result in lifestyle changes in additional costs and even worse taxes. Don't believe us? Read the legislation for yourself, here.

It's a fantasy whereby the government is going to go ahead and say to businesses, "because you use energy we are going to require you to purchase the right to emit CO2."

...and guess who will end up paying for all of that.

Price Increase

All of these new costs will be passed along so that energy will cost more to use both in the manufacturing cycle, in the distribution cycle, in the transportation cycle, in the farming cycle, in the harvesting cycle -

Which means at the end of the day, it's going to come right down to your house and your paycheck, and you'll be paying more for energy, not just your heat and your lights and your air conditioning. You'll be paying more for everything. According to an article published by the Wall Street Journal on June 26, 2009, "The whole point of cap and trade is to hike the price of electricity and gas so that Americans will use less. These higher prices will show up not just in electricity bills or at the gas station but in every manufactured good, from food to cars." [1]

How much more will American families pay? According to the Heritage Foundation, "In 2035 the inflation adjusted GDP loss works out to $6,790 per family of four--and that is before they pay their $4,600 share of the carbon taxes." [2]

Conclusion

If Cap and Trade becomes the law of the land, we are in for a terrible bruising, both out of our paychecks and also across our industrial base. Right now the last thing America can afford to lose more jobs oversees where they don't have these kinds of government artificial taxes.

Sources

[1] The Cap and Tax Fiction, The Wall Street Journal, A12, June 26, 2009 http://online.wsj.com/article/SB124588837560750781.html

[2] CBO Grossly Underestimates Cost of Cap and Trade, by David Kreutzer, Ph.D., Karen Campbell, Ph.D. and Nicolas Loris, The Heritage Foundation, June 24, 2009 http://www.heritage.org/Research/energyandenvironment/wm2503.cfm