Utah’s House Legislature took a strong stance against cap and trade as well as the alleged scientific consensus by passing a nonbinding resolution yesterday 56-17. Specifically, the resolution “urges the United States Environmental Protection Agency to halt its carbon dioxide reduction policies and programs and with its “Endangerment Finding” and related regulations until a full and independent investigation of the climate data conspiracy and global warming science can be substantiated.
Most state representatives are not only questioning the scientific consensus but also the economic implications of cap and trade or similar carbon dioxide regulations. “I’m afraid of what could happen to our economy, to our rural life, to our agriculture, if such a detrimental policy continues to be pursued for political reasons,” said Rep. Kerry Gibson.
Heritage economists modeled the economic effects of a cap and trade system by state. By 2035, Americans living in the state of Utah will see their electricity prices rise by $805.04 and their gasoline prices rise by $1.26 per gallon solely because of the Waxman-Markey cap and trade bill passed in the House. As the economy adjusts to rising energy prices, employment will take a big hit in Utah. Beginning in 2012, job losses will be 14,875 higher than without a cap-and-trade bill in place. And the number of jobs lost will only go up, increasing to 23,962 by 2035.
Jim Scarantino, editor of the New Mexico Watchdog, hopes the Land of Enchantment follows suit. Scarantino writes, “Although proposed legislation to give the Environment Department and the Environmental Improvement Board authority to work on implementing a cap and trade regime for New Mexico has died in this legislature, the EIB is moving forward to consider a petition by New Energy Economy of Santa Fe and other environmental groups to impose a cap on C02 emissions statewide.”
If a federal plan to reduce carbon dioxide won’t do anything to reduce the earth’s temperature, you can imagine what a state plan would do. Nothing but create economic hardships for the state of New Mexico.
Utah’s rejection of the scientific consensus is a welcoming step and echoes many Congressional calls for an investigation and more scientific integrity. Capping carbon dioxide emissions will cost money and jobs and to cap CO2 based on inconclusive evidence makes it that much worse.
And maybe it’s time to take a second look at the Western Climate Initiative. The initiative includes both Utah and New Mexico, along with Arizona, California, Montana, Oregon, and Washington, and the Canadian provinces of British Columbia, Manitoba, Ontario, and Quebec and the goal is to reduce greenhouse gas emissions 15 percent below 2005 levels by 2020. When Senior Policy Analyst Ben Lieberman testified before the House and Senate Western Caucus last year, he warned that cap and trade would disproportionably affect the West. In fact, “Citing financial worries, the State of Arizona has backed out of a broad regional effort to limit greenhouse gas emissions in the West through a cap-and-trade system.”
The West is getting it. When will Washington?
Senate Finance Chairman Max Baucus made headlines this week for something other than healthcare. On October 27 Senator Baucus said he has “serious reservations” about the cap and trade bill, especially the increased near-term target of 20 percent carbon dioxide reduction below 2005 levels by 2020 – up from 17 percent in the passed House bill.
No changes can be made within the cap and trade approach can alleviate his concerns. Changing the targeted emissions reductions for 2020 from 20 percent to 17 percent might reduce the near-tem economic impact, but the reduction targets from there on out mirror the Waxman-Markey bill. The steeper the reduction targets in subsequent years, the higher energy prices will have to go to meet those targets.
The scariest numbers from The Heritage Foundation CDA analysis of Waxman-Markey were in 2035, when job losses reach 2.5 million, gasoline prices will rise by 58 percent ($1.38 more per gallon) and average household electric rates will increase by 90 percent. The Heritage model only goes out to the year 2035 but carbon dioxide reduction cuts are most stringent in 2050.
This is just one of many concerns the Senate has with the cap and trade. In June of last year 10 Democrats sent a letter to Senator Barbara Boxer and Senator Harry Reid stating their concerns over a cap and trade bill, the biggest being that it contain costs and prevent harm to the U.S. economy.
The Heritage Foundation analysis of Waxman-Markey found that implementing the bill would reduce aggregate gross domestic product (GDP) by $9.4 trillion from 2012-2035. Even the Congressional Budget Office acknowledged that “such legislation would also reduce economic activity through a number of different channels.”
Senators in coal producing states rightly have their own reservations. For instance, Senator Sherrod Brown (D-OH) said one of his top concerns was “a spike in energy prices” saying, “I don’t think we’re entirely there, for coal states.”
And we’ll never get there for coal states. President Obama’s infamous line when it comes to cap in trade is that electricity prices will “necessarily skyrocket”, but his message on coal was just as alarming. Although the President did talk about the possibility of clean coal, he also said, “So, if somebody wants to build a coal-fired plant, they can. It’s just that it will bankrupt them because they are going to be charged a huge sum for all that greenhouse gas that’s being emitted. That will also generate billions of dollars that we can invest in solar, wind, biodiesel and other alternative energy approaches.”
So we’re going to tax cheap, reliable energy (costs that will be passed on to the consumers) to invest in expensive, inefficient energy sources that cannot survive without government support.
Despite Boxer’s repeated attempts to promote cap and trade as a jobs bill, Senator Debbie Stabenow (D-MI) still has concerns: “My message over all is that for us to support what needs to be done in addressing global warming we need to demonstrate that, in fact, jobs are created.”
They won’t be; they will be destroyed. It’s important to stress that of the organizations that modeled cap and trade, not one scenario, including the EPA’s after generous assumptions, projected a net increase in income or employment from cap and trade. The entire debate was over the magnitude of income, consumption and job losses.
The Senate has a lot of problems with cap and trade. But there aren’t any solutions.