Political Snapshot: The Cap-and-Trade Controversy
June 26, 2009 4 Comments
Political Shapshots offer a concise summary of a current issue. Each Snapshot has a representation of the left and right perspective, as well as the TruPolitics take on the issue.
This week, House Democrats proposed a landmark climate bill aimed at greatly reducing greenhouse-gas emissions. The bill calls for a “cap-and-trade” system which would create a market for companies to buy and sell the right to emit carbon dioxide and other gases. The bill would force a shift from coal and other fossil fuels to more energy efficient sources, while also establishing new building codes that punish environmentally unfriendly structures. The stated goal of the highly controversial legislation is to cap greenhouse-gas emissions at 17% of 2005 levels by 2020, and at approximately 80% by 2050.
Right: Republicans have long been opposed to the cap-and-trade system, claiming that it will come at a high cost to consumers, taxpayers, and the economy. They believe that the increased costs to manufacturers, coming 
either through forced investment in “environmentally friendly” facilities or payment for carbon emissions, will be passed through to consumers through higher costs and lost jobs. Many on the right also fundamentally disagree that climate change is a pressing issue, citing the growing body of scientific research that refutes its affects.
Left: Democrats have stated that the legislation is necessary to stem the rapid growth of U.S. carbon emissions. These emissions, say many scientists, are doing great damage to the environment and may result in irreversible climate change. President Obama promised such legislation to supporters during his campaign, and passage of the controversial bill would be seen as a noteworthy victory on a foundational administration policy. The new program would also give the president strong bargaining power ahead of international climate negotiations later this year, where the U.S. may face push back for its refusal to participate in the Kyoto Protocol. Significantly, the proposal has seen heavy resistance from Farm Belt and Blue Dog Democrats whose constituents may face increased job loss and decreased industry profit.
TruPolitics: Which of the following is more important to you: 1. American jobs; low energy costs; cash for consumers; strong U.S. industry; or 2. Reduction in greenhouse-gas emissions; environmentalist policy? Your answer to that question will frame how you feel about cap-and-trade policy. For environmentalists, who see climate change as a growing and palpable threat, the increased costs to consumers and damage of U.S. industry are a necessary trade-off. But it is a foolhardy trade-off.
Firstly, the costs of the bill will be significant. Many companies will be forced to rebuild factories and reform emissions, a heavy up-front investment cost. Those that cannot afford the investment will have to pay for their increased emissions, a heavy recurring cost. These costs will have a triple affect on the U.S. economy: 1. Companies will pass the costs through to consumers, resulting in a form of energy tax on consumers; 2. Companies will suffer from increased costs, driving down profitability and creating job loss; 3. Companies will move overseas to nations like China and India that do not have the same constraints on greenhouse gases.
Those reasons are why the U.S. did not participate in the Kyoto Protocol under both the Bush and Clinton administrations—the results would be far too costly for domestic production and industry. They are also why the U.S. Chamber of Commerce, the National Association of Manufacturers, and many Farm Belt Democrats oppose the legislation, warning that it will cause a mass migration of business out of the country.
Secondly, the scientific community is still largely divided over climate change. In 2007, a body of U.N. scientists conferred to draft a document demonstrating the damages of climate change. A few months ago, over 700 scientists (13 times the amount that drafted the U.N. proposal) said they fundamentally disagree with the findings. Dr. Kiminori Itoh, a Japanese environmental physical chemist who contributed to an earlier U.N. climate report, said man-made warming is “the worst scientific scandal in history.”
Al Gore’s famous movie “An Inconvenient Truth” lays out a compelling and emotional case for climate reform, and joins with a large body of research showing the potential dangers of greenhouse gasses. Nobel Prize winner Ivar Giaever, on the other hand, calls global warming the “new religion,” based on faith rather than fact. 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 on the issue. The earth’s temperatures have flat-lined since 2001 despite growing concentrations of CO2, and peer reviewed research has now debunked extreme scenarios about polar ice caps, hurricanes, and rising ocean levels.
The bottom line here is simple: The global warming debate is far from settled. The legislation, then, creates a significant cost to the American economy in favor of what is at best a highly politicized theory. The Heritage Foundation projects the bill will cost the economy $161 billion in 2020, which is $1,870 for a family of four. By 2035, when the restrictions on emissions ratchet up, that number rises to $6,800. Are you willing to pay $6,800 in favor of a partisan theory? If you work in the agricultural or manufacturing industry, are you prepared to lose your job because of an environmentalist agenda? This is a classic case of politics overriding prudence.
-Matt Benchener from TruPolitics.net
There’s another element to cap and trade that has been missing from the “official” debate. The Democrats have focused only on the direct costs to citizens – the higher energy costs for energy used in the home.
Unwillingly, all of us have become substantial stakeholders in GM and Chrysler. They, like all other companies, will face dramatically higher costs as a result of this bill. Cap and Trade jeopardizes our “investment” in these companies, making it less likely we’ll ever recover those funds.
In addition, higher energy costs and the need to construct new plants years ahead of previous plans will increase costs of all goods and services. Either companies providing those goods and services will charge more, or (if the goods are replaced by lower-cost items from foreign firms) job losses and increasing trade deficits will result.
In any likely outcome of this plan, U.S. taxpayers will face much higher costs for everything, and the U.S. ecomomy will be saddled with additional costs … all to have a very slight impact on emissions of “greenhouse gasses.” Even if human-caused global warming is proven to be a reality, the costs from this legislation dramatically outweigh the potential benefit.
Indeed Matt, this Global Warming theory is another politicized religion of the Left. But people have more common sense than they thought, so now they started to call it more vague: “Climate Change”. But people realize it’s all the same thing.
Here’s what has stumped me about Global Warming. Global Warming only works if you use reports that are unreliable and skewed to the left, and does not work if you use standard data, historical data, and most mainstream tests. I read an article where a climatologist went to Congress with studies that showed how Global Warming is not happening as predicted by environmentalists. In a portion of the article, he talked about how one of the agency reports that environmentalists use to prove their point ignores a significant portion of the data collected by said agency.
As to glacier melting, the most significant glacier meltdown, mentioned many times by environmentalists, has been found to have volcanic conditions underneath that are causing the rapid melting of the ice in this particular area. Whenever large icebergs break off from this section, however, environmentalists are quick to blame pollution and global warming.
Well if this bill passes the senate a lost of jobs will be lost, the only bright side is as a party we can use this as sign of the democrats failure.
In my own state we lost 500 jobs because the local dem wanted to tax cigars!! That plant has been there since the early 1900′s!!