As the national average of gasoline creeps to three dollars a gallon, economists are warning that high gas prices in the United States could slow the economic recovery. Other countries’ economies are recovering more quickly and increased production and activity is putting upward pressure on oil prices. That coupled with a relatively weak US dollar spells trouble for American drivers. Throw in carbon dioxide cuts and gasoline prices could reach unprecedented levels:
To meet the Obama administration’s targets for cutting greenhouse gas emissions, some researchers say, Americans may have to experience a sobering reality: gas at $7 a gallon. To reduce carbon dioxide emissions in the transportation sector 14 percent from 2005 levels by 2020, the cost of driving must simply increase, according to a forthcoming report by researchers at Harvard’s Belfer Center for Science and International Affairs. The 14 percent target was set in the Environmental Protection Agency’s budget for fiscal 2010.”
If you think it’s out of the question, it’s not. Members of Congress are working with oil companies now to levy a carbon fee on the transportation sector: “Key senators are weighing a request from Big Oil to levy a carbon fee on the industry rather than wrap it into a sweeping cap-and-trade system that covers most of the U.S. economy. If accepted, the approach — supported by ConocoPhillips, BP America and Exxon Mobil Corp. — could rearrange the politics of the Senate climate debate and potentially open up votes that may not be there otherwise.”
Such an approach would do nothing but cause more economic pain for American households. Higher gas prices lower employment, income, and spending, and Americans will have to dip into their savings to pay for higher gas prices. Heritage economist Karen Campbell details these effects in her paper, “How Rising Gas Prices Hurt American Households.”
Furthermore, a carbon fee would do very little to reduce CO2 emissions. As Senior Policy Analyst Ben Lieberman points out, gasoline prices have already reached these levels in Western Europe where nations have made commitments to cut CO2, yet we are outperforming them in terms of emissions reductions.
Higher fuel prices adversely affect just about every aspect of the economy. Food prices, for instance, will increase as it costs more to harvest, manufacture and transport food. And as the price of airline tickets rise, people will travel less. It may be easier to support these policies when public transportation is readily available – although the cost of public transportation will rise as well. However, many parts of the country do not have access to public transportation and have to drive a significant distance just to get to a grocery store.
Indeed, the rural, poorer areas will be hit hardest by a spike in gasoline prices as residents in these areas spend a larger percentage of their income on fuel. When gasoline prices passed the $4-per-gallon mark, Fred Rozell, pricing director at a fuel analysis firm said, “This crisis really impacts those who are at the economic margins of society, mostly in the rural areas and particularly parts of the Southeast. These are people who have to decide between food and transportation.” This map provided by the New York Times shows the percentage of income spent on gasoline throughout the country.
A targeted approach to reduce carbon dioxide emissions will give us the same results as a cap and trade system: Lots of economic pain for negligible reductions in emissions.
“The science behind climate change is settled, and human activity is responsible for global warming. That conclusion is not a partisan one.” – Environmental Protection Agency Administrator Lisa Jackson.
Forget being partisan or not. That conclusion of settled science isn’t existent. It hasn’t been for a long time, but they are especially bold words in light of the climate scandal involving the University of East Anglia’s Climatic Research Unit (CRU) and the flaws uncovered in the Intergovernmental Panel on Climate Change report. Yesterday, the Senate Minority Committee on Environment and Public Works (EPW) released a new report that scrutinizes the climate scandal and CRU and its connection with the IPCC and U.S. government policy.
The report delves into the email trail, the IPCC consensus of “unequivocal warming”, the legal and policy issues of Climategate and the EPA’s reliance on the IPCC to make regulatory decisions in order to reduce greenhouse gas emissions. The EPA’s endangerment finding, which took effect January 14, gives the EPA authority under section 202(a) of the Clean Air Act (CAA) to regulate greenhouse gases (GHGs). Sen. James Inhofe (R-Okla.), Ranking Member of the Senate Committee on Environment and Public Works, said:
“So this administration has said, “All right. We couldn’t go it legislatively so we’re going to do it on our own. We’re going to do the damage, inflict the economic damage to this country that would have come under cap and trade the same as if we had been able to pass it.” Now, I think that’s interesting. I would like to say this one thing. The chairman made the statement that the Supreme Court’s mandating this stuff. They’re not mandating a thing. The Supreme Court said you have three choices. You can either, well, either find an endangerment finding or do not find it, or you can say that the science is uncertain.
And I think what we’re going to be asking you to do, during the question and answer time is to find that it’s not certain. You can have an endangerment finding. That can change because you didn’t know at the time that you were basing this on the IPCC flawed science, that the science was flawed. You didn’t believe that, but nonetheless that’s where we are today. We’re going to be making the request, Madam Chairman, that we go back, relook at this and also that — that — and the EPA have their I.G. (Inspector General)looking into this just the same as all the other nations are doing at this time all throughout Europe.”
You can find the full report here. What’s most interesting is that it’s the politicians arguing that the science is settled while the climatologists suggest otherwise. Even Phil Jones, former director of the East Anglia’s CRU admitted, “I don’t believe the vast majority of climate scientists think this. This is not my view. There is still much that needs to be undertaken to reduce uncertainties, not just for the future, but for the instrumental (and especially the palaeoclimatic) past as well.”
The EPA needs to reevaluate the science before it moves forward on a long road of expensive and expansive environmental regulations.