Wednesday, 24 June 2009

Congress to Vote on $846 Billion “Cap-and-Trade" Tax

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smokestacksThe Washington Post has reported today that Congress will vote Friday on the 1,092-page American Clean Energy and Security Act (H.R. 2454) to restrict carbon-dioxide emissions in order to fight global warming. The Congressional Budget Office estimates that the measure, which is also known as "cap-and-trade" legislation, would create $846 billion in higher taxes and increase federal “direct spending by about $821 billion.” In addition to the direct tax implications, the bill's extensive new “cap-and-trade” regulations could skyrocket all Americans’ utility bills and create massive job losses.

This legislation, which would give a double-hit to the wallets of consumers, is strongly backed by President Barack Obama. Obama stated in his June 23 press conference that the legislation would create government incentives for private enterprise to create energy-efficient devices. “This legislation is paid for by the polluters who currently emit the dangerous carbon emissions that contaminate the water we drink and pollute the air that we breathe. It also provides assistance to businesses and communities as they make the gradual transition to clean energy technologies.”

That sounds like people who emit carbon are horrible persons and “polluters” deserving of punishment, but the truth is that everyone who has read this article has emitted carbon since they began reading it. People emit carbon whenever they breathe, as does every animal on the planet.

Here are some other ordinary ways to emit carbon: bake a pie or a loaf of bread, drive your car anywhere, turn on your summer grill for some barbeque, have a campfire or even use a stove to heat your house with wood in the winter. All of these activities emit carbon dioxide — which, by the way, trees and all other plants need for photosynthesis. The more carbon dioxide in the atmosphere, the faster plants can grow. In other words, more carbon dioxide means more plants and more food.

If the power plants are emitting a dangerous pollutant into the atmosphere when they emit carbon dioxide, then you are too are polluting the atmosphere when you exhale. Yet energy companies would be restricted in how much carbon they can emit, or face punishing taxes and fines.

The Washington Post has reported that the legislation has “tweaks benefiting a range of companies, including algae-based biofuel producers and major petroleum refiners.” But it should be noted that these biofuels would be carbon-based. This means that when they burn, they won’t emit any less carbon into the atmosphere than petroleum products.

Obama sold the legislation as a “private sector” solution to the global warming issue: “These incentives will finally make clean energy the profitable kind of energy. And that will lead to the development of new technologies that lead to new industries that could create millions of new jobs in America — jobs that can't be shipped overseas.”

The “clean energy” promoted by this bill would only be “profitable" with substantial federal subsidies, including creation of a Clean Energy Deployment Administration to loan businesses money for what federal bureaucrats deem “clean” energy. It would also double the current $25 billion loan subsidy program for electric vehicles and include the essence of the “cash for clunkers” bill where auto dealers are subsidized up to $4,500 for selling more fuel efficient cars (but is in reality little more than another bailout for auto manufacturers).

The Republican minority complained in the House Energy and Commerce Committee report that the bill, if enacted, “would impose major new costs and expansive regulatory controls over a weak and struggling U.S. economy.” They’re right. They have some other complaints about the legislation that are also worth noting:

Rising Utility Bills: “The bill would impose enormous new direct and indirect costs on U.S. consumers and would have major implications for financial markets and international trade and commerce.”

Full Costs Of Bill Unknown: “The full costs of implementing the bill are not known and the bill was considered and reported by the Committee before cost estimates of all the titles were prepared or made available. While prices for energy and goods and services would rise for virtually all Americans, certain regions of the country will be particularly adversely affected by the legislation.”

More Job Losses: “Enactment of this legislation will unquestionably cause job losses in the U.S. in the manufacturing, industrial and other energy-intensive sectors.”

More Unfunded Mandates: “Upon the date of enactment of this bill, a 30 percent increase in building efficiency is required. Effective January 1, 2014, for residential buildings and January 1, 2015, for commercial buildings, an additional 50 percent increased efficiency is required. Subsequent three-year targets of additional five percent increases in efficiency are mandated through January 2030. These targets and deadlines were established with no concern for cost and with no assessment of feasibility.”

If enacted, the so-called “American Clean Energy and Security Act of 2009” would cause job losses for unknown thousands of Americans, increase taxes on all Americans, and increase all Americans’ utility bills by what even authors of the bill admit is an unknown level.

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