• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • What Senators Kerry and Boxer Got Wrong About Energy and Cap-and-Trade

    In response to Sarah Palin’s July 14th Washington Post op-ed, Senators John Kerry (D-MA) and Barbara Boxer (D-CA), in their own WaPo op-ed, write they want to “put facts ahead of fiction and real debate ahead of rhetorical bomb-throwing.” Senators Kerry and Boxer will likely be the co-sponsors for the Senate bill to accompany the Waxman-Markey bill passed in the House June 26th.

    Kerry and Boxer first refute Palin’s claim that job losses are all but certain. Boxer and Kerry assert that investing billions of dollars in clean energy will jumpstart the economy by creating millions of jobs. They point to a recent report by Robert Pollin, James Heintz and Heidi Garrett-Peltier of the Political Economy Research Institute (PERI) that says the bill will create more than 1.7 million jobs.

    Heritage economist Karen Campbell dismantles the PERI study saying:

    “The study investigates the question of how many jobs would be needed if $150 billion were invested in clean energy over the next 10 years versus how many jobs would be needed if the same amount were invested in carbon-based energy industries. This is not any policy currently being debated today, and therefore is irrelevant to the debate. Secondly, this tells us nothing about the overall economic effect of borrowing money and using it to build clean energy capacity. Instead, they assume the money comes from a helicopter drop in the sky.

    While the methodology of the study tells us nothing about overall job creation, it did quite effectively demonstrate that it takes 2.5 million workers to get the same amount of energy from renewable fuel that 800,000 workers produce using carbon-based fuel. That is, the authors found it will take 1.7 million more workers to generate 4, 618 billion kwh of electricity in 2020 if 15 percent of it must come from renewable sources mandated by ACES versus the current mix (pg. 49).

    Yet, while the authors reiterate the loss in efficiency throughout the study, they seem unconcerned by the loss of economic growth and lower wages implied by basic economic principles.”

    More from Campbell here. A full dismantling of the PERI study from Campbell is available here.

    The reality is that it will destroy 1.15 million jobs. Higher energy prices ripple through the economy, producing slower economic growth and higher unemployment. The Heritage Foundation’s Center for Data Analysis found that, for the average year over the 2012-2035 timeline, job loss will be 1.1 million greater than the baseline assumptions. By 2035, there are a projected 2.5 million fewer jobs than without a cap-and-trade bill. But Heritage isn’t alone in these estimates. The Brookings Institute, a supporter of a carbon tax, projects that cap-and-trade will increase unemployment by 0.5% in the first decade below the baseline. Using U.S. Census population projection estimates, that’s equivalent to about 1.7 million fewer jobs than without cap-and-trade. A study done by Charles River Associates prepared for the National Black Chamber of Congress projects increases in unemployment by 2.3-2.7 million jobs in each year of the policy through 2030–after accounting for “green job” creation.

    Kerry and Boxer then point to the acid rain program established under the 1990 Clean Air Act as reason to dismiss cap and trade skeptics: “Naysayers predicted it would cost the economy millions of jobs. In fact, the United States added 20 million jobs from 1993 to 2000, as the U.S. economy grew 64 percent.”

    Not one of the three groups (Heritage, Brookings or CRA) is suggesting that the economy won’t grow if Congress passes cap-and-trade. It’s that the economy will be operating well under its potential. Senators Kerry and Boxer need a lesson from French economist Frederic Bastiat on the seen and the unseen. That is, the employment losses and losses in economic activity ($393 billion per year) occur relative to no cap-and-trade bill.

    Proponents of a cap-and-trade program for carbon dioxide often point to the acid rain cap-and-trade program as a success story – a reason to pass a carbon capping CO2 bill. But the market was already responding and reducing sulfur dioxide before the start of the program. Moreover, the acid rain program and a carbon dioxide cap-and-trade program are on two entirely different scales. Reducing carbon emissions is far more complex and ambitious than sulfur dioxide. A better comparison would be taking a look at what’s going on in Europe. We in the U.S. should be so fortunate that Europe’s gone through with a cap-and-trade program, because it is a perfect example of what not to do.

    Testifying before the Committee on Foreign Relations, The Heritage Foundation’s Senior Policy Analyst in energy issues explained:

    “Most western European nations are currently learning, the hard way, that ratcheting down carbon emissions [through cap-and-trade] is very difficult and expensive…To the limited extent European nations have reduced emissions below business-as-usual levels, it has hurt their economies. Almost every western European nation has had higher unemployment and energy costs than America, and a weaker overall economy, even as emissions were rising. Far from seeing evidence of the new green economy some are now promising, we are seeing that cap-and-trade has contributed to the harm. For example, Spain has been cited repeatedly as the example of a successful clean energy economy and source of green jobs, but it is rarely mentioned that Spain currently has 18 percent unemployment.”

    If Kerry and Boxer want substantive dialogue, they should stop filling the newspapers with fluff. For more substance, check out The Heritage Foundation’s Rapid Response page.

    Posted in Energy [slideshow_deploy]

    26 Responses to What Senators Kerry and Boxer Got Wrong About Energy and Cap-and-Trade

    1. Debbie A, Texas says:

      Who gave ownership of the air I breathe and the space I take up on the planet to the U.S. Federal government? Let's see? Inalienable rights – Life would include the air I breathe, Liberty, aka Freedom, includes the carbon footprint granted to me by birth, and the Pursuit of Happiness. The U.S. government does not own these things and therefore cannot sell or trade them. Put this up there with TRUE HOAX and mark us all STUPID for letting Congress get away with it!

    2. Gary, soon to be fro says:

      "Facts ahead of fiction, and political bomb throwing," the standard response when Liberals have no clue of the facts, and don't want their seemingly unlimited authority challenged by the minions. Just like Al Gore's statement, saying "It's all settled science, no further discussion needed." How in the world did we get ourselves in straight jackets, locked in an asylum for the criminally insane?

    3. Dave, Laguna Niguel, says:

      Its all about the money, just like Obama's objective of wealth transfer form those who work for money to those who don't. Cap and trade is all about a huge money grab, garnering a larger piece of the pie that heretofor belonged to oil and coal companies. Al Gore, thrown out of government, could not "invent" anything nor come up with an alternative fuel so he makes up all the lies about manmade global warming. I believe he has made over $12million so far, and Boxer and the rest of the democrats are in the money line. LIES are running this country.

    4. Keith Baker says:

      One should keep in mind that "greenhouse gases" make up 5% of the total atmosphere. That carbon gases make of 1.5% of that total 5%. So, the best man can do is influence 1.5% ( nevermind that not all green house gases would be impacted by any cap and tax) of the total 100%, how much help is that?

      Suppose you had an academic course where you could only influence 1.5% of your grade, no matter what you do? How hard would you work? How much of your total study time would you devote to that course?

      Now imagine a "team concept" where some of the team members said we will not study (India, china and others) how much would you work for that 1.5% then?

      If you use a dollar as the analogy and could acutally influence .015 out of every 100 through save "savings" what would your savings really be worth?

    5. Rmoen, Reno, NV says:

      It looks to me like cap-and-trade may never see a Senate vote. Daily I read editorials, comments and letters-to-the-editor from all over the nation. Whereas when the House passed the bill it was maybe 2-to-1 against cap and trade, opinion now seems to be at least 6-to-1 against. The Senate will be wise to heed the overwhelming lack of public support and stop this legislation from passing into law.

      If instead of a complex and risky cap-and-trade system the United States had a national mandate to replace coal generation plants with natural gas and nuclear energy, plus if we replaced our commuter cars with battery-powered electric cars, we would drastically reduce our dependence on foreign oil and reduce CO2 emissions faster and beyond the proposed cap and trade targets.

      – Robert Moen, http://www.energyplanUSA.com

    6. L.N. Smithee, San Fr says:

      Uh-oh! Did you cite that study commissioned by the National Black Chamber of Commerce? Didn't Boxer neutralize that study by citing the NAACP's endorsement of cap-and-trade? Whassamatter, don't you go on YouTube? (/sarcasm) ;)

    7. Pingback: » Financial News Update - 07/24/09 NoisyRoom.net: Where liberty dwells, there is my country…

    8. Max C(anady) says:

      This last year we had the coldest winter in 74 years. I am 74 so I should know. It is sort of funny that there are 400+ scientiic minds says there is no global warming. Al Gore Jr. just wants to make money on it.

    9. Pingback: *BREAKING: ZELAYA INVADES HONDURAS THRU NICARAGUA « FactReal

    10. Julie Knudson, Orego says:

      Why doesn't John Kerry tell us how the British government has labeled Al Gore's 'Inconvenient Truth' as propaganda? Why doesn't Kerry discuss the over 30,000 scientists who dispute CO2 is causing global warming? CO2 is actually good for agriculture and, the Antarctica ice cap is actually growing. We're being duped about the facts around global warming.

    11. Daver Ft. Worth says:

      Facts–we don' need, no stinkin' facts!

      Carbon molecules are never green in our egghead models. Therefore they're bad!

      Come on people–why can't you believe what the smartest people in the room are telling you?

    12. Jay, Humble, TEXAS says:

      It's all about choices folks. The American people chose to elect the most liberal congress that has ever existed. We have to be mindful that these very same people are breathing the air we all share and be afraid, be very afraid that they may chose to do likewise in 2010 if the conservatives don't get their act together. I don't like what I'm seeing so far the Republican Party; it is D.O.A. and no one / no body is stepping up to the plate that can hit the Grand Slam we need to turn this craziness around.

      Why has the government concocted this phony cap and trade scam? Because the government needs an excuse to grow and to expand its social welfare programs, which translates into an expansion of its power.

      Message to the people of the USA:

      - You need to register to vote, unless you are on welfare. If you are living off the efforts of others, please do us the favor of sitting down and shutting up until you are on your own.

      - When you do vote, your votes for the House and the Senate are more important than your vote for president. The House controls the purse strings, so concentrate your awareness there.

      - Liars can't be trusted, even when the liar is the president of the country. If someone can't deal honestly with you, send him packing.

      - Don't bow to the temptation to use the government as an instrument of plunder. If it is wrong for you to take money from someone else who earned it — to take their money by force for your own needs — then it is certainly just as wrong for you to demand that the government step forward and do this dirty work for you.

      - Use wisely your power of choice.

    13. Lloyd Scallan - New says:

      What we all must understand is that John Kerry and

      Barbara Boxer are both part of the socalist movement that has taken charge of this country today. The really frightening fact is that they (as well as most Democrats) have been so conditioned by the same evil that infected Obama, (or perhaps Obama is the host) are desperate to drag all of us into a totally controled government society. I honestly beleive that it must come down a major insurrection to put a stop to those who would distroy our American way of life.

    14. Dale-Woodstock,Ga. says:

      When the likes of boxer and kerry speak,first look at their track record. you will then conclude they will be lying.

    15. Dave, Bellingham, Wa says:

      You wrote, "Kerry and Boxer first refute Palin’s claim that job losses are all but certain." That's impossible by definition.

      "Refute" means "to prove false". Kerry and Boxer have argued that the liklihood of job losses is uncertain, but you can't prove the certainty of an event in the future. In any event, we know that their arguments, which run counter to experience in other countries, are nothing more than political posturing.

    16. Ann, Utah says:

      I am so glad to hear that I'm not alone! We really need to replace the congressmen and senators that have their heads in the clouds and support the ones that are still here on planet earth. It dosen't matter which party they are from we just need to get back to basics. I am guilty because I never cared before, I felt like I couldn't make a difference. I see it going on all around me! Family, Friends and Neighbors are all starting to wake up. Those government officals who think we are still asleep had better watch out because American is still great because the people are still good! And we will take back the our counrty!

    17. Metalchemist, Califo says:

      I find it interesting that John Kerry the wealthiest senator in the present Legislature.link here : http://www.opensecrets.org/pfds/overview.php?type
      Then there is Boxer,look here :http://www.opensecrets.org/pfds/CIDsummary.php?CID=N00006692&year=2007 Who "unfortunately" is one of MY misrepresenting Senators,Look Here : The other one is (hold your nose)

      Dianne Feinstein (shudder/chills down my back).

      Look here : http://www.opensecrets.org/pfds/CIDsummary.php?CI

      Both parties have shown the effects of this politically debilitating condition, With the Democratic Party leading, testing positive, with a percentage of Republicans with positive results also.

      This condition must be addressed by eliminating those that make the rest of us suffer from THEIR condition,resulting in "Political GREED."

      The results are easy to see, look at the unemployment rate in California, as well as the economic collapse of the States economy, partly due to the FACT that the political system could give a (censored) about the Citizens of this country/state.

      With Illegal Immigration affecting any and all things economically, like I said LOOK at California's unemployment.

      This state shells out over 12.5 BILLION (tax) dollars annually to pay fro all the excessive use of services provided to the CITIZENS of the state, but the LOOPHOLES are exploited in every sense of the word.

      Start addressing these matters and you are addressing a problem that is AFFECTING every American Citizen of this country.

    18. Bert, University Cit says:

      Barbara Boxer was listening when a General recently called her "ma'am" instead of "senator" but must have been asleep (or was she?)when Professor William Happer of Princeton University delivered experienced scientific testimony before her committee that carbon emissions, especially those of CO2, have little or no effect on global warming and that "cap and trade" is destructive nonsense. He states that doubling CO2 would be beneficial for mankind! Read his testimony at http://www.capmag.com/article.asp?ID=5441.

    19. Ross Writes, Braden says:

      Sen.Kerry and Sen. Boxer are pure socialist and are the creators of unnecessary hardships through their support of dangerous and unnecessary legislation that has brought the USA to the brink of self-destruction over the last +20 years. Both are "poster child" examples of what is wrong with the home states(Mass and Calif). This whole bill is nothing than a power grab and suppression of individual liberties. We could learn a lot from Europe's experiment in socialism…it doesn't work each and everytime it's tried. And we ain't Europeans, we are unique and all American!

    20. Lynn B. DeSpain says:

      Cap and Trade means that all Americans get to pay more for what they were getting for less! Can anyone explain it simplier?

      Hozro

    21. Jerry from Chicago says:

      Just exactly how do Senators Boxer and Kerry define "clean energy"? Ooops, I guess they didn't bother to define their terms. It's so much easier that way. Is burning natural gas "clean energy"? Is energy produced from nuclear power plants "clean energy"? Or can "clean energy" only come from windmills, or solar panels?

      But wait, under cap and trade, you can pollute as much as you want as long as you buy "carbon credits" from the right people. So go ahead, light the bitumenous fires, its ok as long as you grease the right palms.

      How in God's name do these people get elected?

    22. Tucano Fulano says:

      Kerry and Boxer, now there is a pair of challenged minds. Those two bozos do nothing to enhance the American experience 'cause one thinks we ought to "look like" Europe, the other thinks we ought to "look like" Honduras or El Salvador.

    23. Doug Simmons, Twai says:

      Yes, the nonsense in our capital is over the top, and these politicians have now shifted into hyperspeed to try and get their agenda passed before the slumbering public figures out what happened. The frustrating part is that most Americans believe the "state" media and don't realize that there are other sources for news.

      I talked to someone yesterday who thought they were getting the whole "straight" story because they listened to NPR! I almost fell out of my chair!

    24. B. Sinclair says:

      Reckless, irresponsible taxation should be regarded as treason, especially considering our national economy since Reagan. No one party in America's history has caused the long-term damage created by the present administration, the house and congress. Legal citizens must become vocal, active and start recovering our America.

    25. Pingback: Distinguishing Real Science from Political Bias | Health News

    26. Pingback: Distinguishing Real Science from Political Bias | Genetics News

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×