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June 26, 2009

Stop Waxman-Markey, the "Cap 'n Trade" Tax

From this morning's Washington Times

The Democrat-led House pressed Thursday for enough votes to pass landmark legislation that would combat global warming by forcing U.S. companies to reduce their carbon-dioxide emissions, expanding expensive renewable-energy sources and trimming consumers' choices on new light bulbs and hot tubs.

Publicly, President Obama urged passage of the legislation -- one of his top priorities -- even though it faces near-unanimous opposition from Republicans. Behind the scenes, his top aides and environmental allies lobbied wavering Democrats to vote yes as early as Friday.
...
But resistance there remained high among both Democrats and Republicans to key components of the bill, including its complicated pollution-permit market system called cap-and-trade. In addition, Senate Democrats are divided over regional disparities in the impact of the bill.
...
The House bill would cut U.S. greenhouse-gas emissions -- primarily carbon dioxide -- 17 percent below 2005 levels by 2020 and 83 percent by 2050. It would also establish a new Renewable Electricity Standard (RES), which would force utilities to supply a minimum amount of their electricity from renewable energy sources.

The bill would reach carbon-dioxide emission targets by establishing a cap-and-trade system, which would require heavy emitters of carbon dioxide, and the oil and gas industry, to buy annual emissions permits from the government or through a secondary market.

The plan, as written by the House Energy and Commerce Committee, would auction a small percentage of the available permits, or allowances, directly to companies. The rest, more than 85 percent, would be given away to selected industries, local utility companies, states and Indian tribes.

Waxman-Markey, otherwise known as the Waxman-Markey, otherwise known as the American Clean Energy and Security Act of 2009 (ACES) is absolutely the nuttiest bill ever devised. It's designed to fight a non-existent problem, it creates a trading system that will serve no purpose other than to waste time and money, and dramatically increases government power. It's like something out of a Franz Kafka novel.

I could write forever about how no, there's no consensus among scientists that global warming is real, that carbon emissions are contributing to it, or that if it is occurring there's anything we can do about it. But Jim Manzi has a good post over at The Corner so I'll let him speak for me (follow the link to his piece for links to his sources):

It appears that years of debate about climate change and energy may now come down to a vote on an actual bill, the American Clean Energy and Security Act of 2009 (ACES). As I write this, the vote is scheduled for Friday. If it occurs, you will be asked to vote to implement carbon rationing in the United States.

Without regard to party or ideology, I believe that the evidence is clear that this law would be contrary to the public interest. Here is why, in a nutshell:

1. It would be a terrible deal for American taxpayers. According to the Environmental Protection Agency, it is projected to impose annual costs of about $1,100 per household (a little less than 1% of total consumption) by 2050. The benefits we will get in return? If the law works precisely as intended, in about one hundred years we should expect surface temperatures to be a about one-tenth of one degree Celsius lower than they otherwise would be. The expected costs are at least ten times the expected benefits, even using the EPA's cost estimates and assuming achievement of the primary goal of the legislation.

2. The argument that "Okay, it's a terrible deal standalone, but we need to lead the world by example" is extremely unconvincing. First, while you are probably not a climate-science expert, I bet you've negotiated a few things in your life. What do you think about the negotiating strategy of unilaterally giving away our most obvious leverage -- namely "we'll reduce our emissions if you reduce yours" -- and instead hoping that those nice men who rule China will be guilted into sacrificing their perceived economic self-interest if we just go first? Second and more fundamentally, as per many detailed analyses, the global deal that we would theoretically be chasing isn't even attractive, even if we assume every technical climate change prediction by the UN IPCC is correct.

3. Contrary to early expectations that auctioning cap-and-trade permits would generate $80 billion per year of government revenue, this law would not contribute materially to deficit reduction. You've seen the internal negotiations up close. Because so many allowances have been given away to special interests to try to get the votes needed to pass ACES, the CBO now estimates that it will bring in a net of a little over $2 billion per year over the next decade. As you know, this is about one one-thousandth of this year's budget deficit.

4. A further effect of all of these deals (which are entirely predictable in a democracy) is that ACES is very unlikely to achieve even the limited benefits that are claimed for it. The details of the bill mean that there is now not a hard cap on emissions for at least the first decade of its existence. What do you think the odds are that this will change at some undetermined point in the far future when all of the normal interest-group pressures of a democracy are supposed to magically disappear?

5. In short, Waxman-Markey would impose costs at least ten times as large as its benefits, would not reduce the deficit, and doesn't even really cap emissions.

So why the rush to get this enacted? Kim Strassel at the Wall Street Journal has the scoop:

Among the many reasons President Barack Obama and the Democratic majority are so intent on quickly jamming a cap-and-trade system through Congress is because the global warming tide is again shifting. It turns out Al Gore and the United Nations (with an assist from the media), did a little too vociferous a job smearing anyone who disagreed with them as "deniers." The backlash has brought the scientific debate roaring back to life in Australia, Europe, Japan and even, if less reported, the U.S.

In April, the Polish Academy of Sciences published a document challenging man-made global warming. In the Czech Republic, where President Vaclav Klaus remains a leading skeptic, today only 11% of the population believes humans play a role. In France, President Nicolas Sarkozy wants to tap Claude Allegre to lead the country's new ministry of industry and innovation. Twenty years ago Mr. Allegre was among the first to trill about man-made global warming, but the geochemist has since recanted. New Zealand last year elected a new government, which immediately suspended the country's weeks-old cap-and-trade program.

The number of skeptics, far from shrinking, is swelling. Oklahoma Sen. Jim Inhofe now counts more than 700 scientists who disagree with the U.N. -- 13 times the number who authored the U.N.'s 2007 climate summary for policymakers. Joanne Simpson, the world's first woman to receive a Ph.D. in meteorology, expressed relief upon her retirement last year that she was finally free to speak "frankly" of her nonbelief. Dr. Kiminori Itoh, a Japanese environmental physical chemist who contributed to a U.N. climate report, dubs man-made warming "the worst scientific scandal in history." Norway's Ivar Giaever, Nobel Prize winner for physics, decries it as the "new religion." A group of 54 noted physicists, led by Princeton's Will Happer, is demanding the American Physical Society revise its position that the science is settled. (Both Nature and Science magazines have refused to run the physicists' open letter.)

The collapse of the "consensus" has been driven by reality. The inconvenient truth is that the earth's temperatures have flat-lined since 2001, despite growing concentrations of C02. Peer-reviewed research has debunked doomsday scenarios about the polar ice caps, hurricanes, malaria, extinctions, rising oceans. A global financial crisis has politicians taking a harder look at the science that would require them to hamstring their economies to rein in carbon.

Read the whole thing. Her piece goes on and on with evidence like this.

The House will certainly pass this legislation. It is uncertain whether the Senate will follow suit. Stopping it will represent a victory not only for conservatives, but for the future of our nation. Write your Senators as soon as this thing gets through the House.

Posted by Tom at June 26, 2009 9:30 AM

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Comments

You quote Kim Strassel, who says

The inconvenient truth is that the earth's temperatures have flat-lined since 2001, despite growing concentrations of C02.

To the best of my understanding, this is not correct. Of the 10 warmest years on record, 7 have occurred in the 2000s, hardly "flat-lined". My source for this is the graph on page 4 of this WMO report. (summarized in this piece by Chris Mooney.)

Note that this fact alone does not necessarily imply that this bill is a good idea, it's merely one factor of many to consider when deciding policy questions like this.

Posted by: Jason Creighton at June 28, 2009 5:26 PM

This is the fact about Cap N Trade.

Posted by: Sam at July 8, 2009 8:41 PM

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