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  • Morning Bell: The Transparent Costs of Cap and Trade

    On June 26th of this year, the House of Representatives narrowly passed H.R. 2454, the American Clean Energy and Security Act. More commonly known as the Waxman-Markey bill (named after bill sponsors Reps. Henry Waxman (D-CA) and Ed Markey (D-MA), the 1,427-page bill tries to control global temperatures by creating a “cap” on greenhouse gas emissions, and then hoping that greenhouse emitters would “trade” emissions permits meet the cap. Under the scheme, the government would issue fewer allowances each year, causing the cost of the permits to rise. The cost of these allowances is a tax, and under Waxman-Markey, the tax would rise each year. As with any tax, it will ultimately be passed on to consumers in the form of higher energy and product prices.

    On August 6th, the Heritage Foundation’s Center for Data Analysis released a report detailing the economic costs of the Waxman-Markey. Since energy is the lifeblood of the American economy, 85 percent of which comes from CO2-emitting fossil fuels, the Waxman-Markey bill’s arbitrary and severe restrictions on the current energy supply and infrastructure will not only have direct impact on consumers’ budgets through higher electric bills and gasoline prices, but also cause unnecessary inefficiencies at virtually every stage of production. CDA estimates that Waxman-Markey legislation would cost the average family-of-four almost $3,000 per year, cause 2.5 million net job losses by 2035, and a produce a cumulative gross domestic product (GDP) loss of $9.4 trillion between 2012 and 2035.

    Surely our study did not produce the results Waxman and Markey expected. Earlier this month Reps. Waxman and Markey sent us, and a number of other institutions, a letter asking us to answer 33 methodological questions about the analytical techniques used in our study. We were delighted by Waxman and Markey’s letter since it is just the kind of thoughtful investigative work our lawmakers should do more often. For example, they asked if our model took into account an increase in private sector investments in research and development that would be sparked by the legislation and a new carbon market. Answer: It did. Our model incorporates both short and long-run responses to higher energy prices.

    Waxman also asked if our model quantified any benefits of avoided climate change. Answer: It didn’t. Because according to estimates based on IPCC data, the Waxman-Markey bill would only impact global temperatures by .044 degrees C (about .09 degrees F) by 2050. There simply are no economic benefits from such a minuscule impact.

    Waxman-Markey did not send their questions to some notable organizations that have conducted analysis of their bill like the Congressional Budget Office and the Brooking Institution. After we requested they do so, we have since received word that Waxman and Markey sent the same letter to the CBO. They had previously included the Environmental Protection Agency (EPA), Energy Information Administration (EIA), Massachusetts Institute of Technology (MIT), CRA International, the American Council for Capital Formation (ACCF), and the Natural Resource Defense Council (NRDC).

    In the interests of an honest and transparent debate about the costs of cap and trade the Heritage Foundation has devoted a space on our website, www.heritage.org, where we have posted our answers in their entirety. We have formally invited the other organizations who were asked these questions to allow us to post their responses as well, in the interest of full transparency.

    Let’s hope the Waxman-Markey questionnaire signals that a serious debate can now take place. American families deserve to be kept fully apprised of how Congress intends to act, and how those actions will most likely affect their pocketbooks, their jobs, and their lives.

    Quick Hits:

    • Top Senate Democrats are reportedly close to a deal on health care legislation and could submit the bill to the Congressional Budget Office for a cost estimate as soon as today, and make the legislation public as soon as Tuesday.
    • Contrary to leftist rhetoric, the Associated Press reports that health insurer profits are “anemic compared with other forms of insurance and a broad array of industries, even some beleaguered ones.”
    • Health insurers are poised to reap huge profits when Obamacare passes thanks to mandates forcing Americans to buy health insurance and federal subsidies to help them do so.
    • Even with the federal subsidies to buy health insurance, other Obamacare regulations will drive up the cost of health insurance and “put coverage out of reach for millions.”
    • According to Gallup, 40% of Americans now identify themselves as conservative compared to 36% who call themselves moderate and only 20% who say they are liberal. Independents are the fastest growing group of conservatives.
    Posted in Ongoing Priorities [slideshow_deploy]

    28 Responses to Morning Bell: The Transparent Costs of Cap and Trade

    1. Bill, CO says:

      It would be encouraging if Waxman and Markey were wanting honest answers to their questions. They merely wanted to find some way to fortify their arguments, not realizing that the Heritage Foundation has actually used some of the same considerations in their analysis. Write your legislators at http://tiny.cc/pxIgi and voice opposition to cap and trade.

    2. Bob, Portland, OR says:

      The debate is over.

      CO2 is not the problem, it's your excess cash they want.

      Here is the issue, their math was intentionally fraudulent.

      E Demming said in God we trust, the rest of you are going to have to prove it with data…accurate data.

      Folks, when someone intentionally distorts the truth about something scientific, the whole concept is fraudulent.

      Gore's math is wrong on every level including the polar bears.

      It's our money they want.

      If this passes, they'll get it.

      Is this America?

    3. Bill, Tx says:

      Waxman urgggg!!! As uninformed and he is revolting!!!

    4. Tater Salad says:

      Seems the Obama administration and the Deomocratic Party who are the majority have used the old "Bait & Switch" tactic on the American taxpayers. No new taxes! Well, in the 2010 elections we are taking note of these people who are supporting all of the tax increases and they will become "unemployed".

    5. angelo564 says:

      Folks, global warming caused by human behavior is a load of Political Science not the real thing. This is another power grab by the federal government. It is obvious that the congress has been bought and the only way to stop this nonsense is to vote them all out who support this farce.

      If you have an interest in global climate and what controls it go to http://www.ICECAP.us for real scientific information. The site is well written and easily understood.

      Get educated and get moving toward saving our Republic.

      God Bless America!

    6. LibertyVoice, Tennes says:

      Cap and Trade goes hand-in-hand with the Climate Change Lie. All of it is designed by the Socialists, Communists, and Fascists that are in control of their respective governments throughout the world, to gain complete control of everyones lives.

      The current U.S. government is in bed with all of them.

    7. Mary, WI says:

      These two men will keep searching for the right organization to give them the answers they want to hear so they can push this bill through.

      Just more of the same from the democratic party….more taxes and more restrictions for the American people and businesses.

      Calling legislaators with concerns is futile at least in WI….they do what THEY want.

      VOTE THEM ALL OUT NEXT ELECTION!

    8. Christopher Popham S says:

      Health care reform, its mandates and accompanying

      taxations are about to be legislated and will further impact an already beleagured fiscal maelstrom. While big banks continue to hoard bailout funds, smaller banks fail, consumer spending is way off par, foreclosures on-going, unemployment actually at 17%, and worst of all, families struggling to make ends meet and put adequate food on the table.

      This is our economic downfall and rather than heal and repair our economic condition, Congress chooses

      a purely political approach that will be costly and

      dangerous in the short and long term. Needless to say, their focus should be on achieving some degree

      of increased prosperity for America. Get people back

      to work and then maybe in a couple of years consider

      programs like health care. By politically jamming this egregious legislation through, Congress once again denies and ignores the overwhelming will of the people. Congress's own selfish aggrandizement of

      power and money (lobbyists)is their sole motivation. This will all come to an end in 2010 as we sensibly vote out the incumbents and oligarchs, who seem so intent on dragging this country down.

      Good luck America. You're going to need it.

    9. jim toledo says:

      This cap and trade bill is a disaster waiting to happen. Why we are so d–n concerned about giving away our wealth and sovereignty and why do we think we can regulate the environment? This whole bill and environmental philosophy regarding carbon credits is absurd.

    10. Richard Cancemi, Arl says:

      Politicians,like Waxman & Markey, give very little, if any, attention to the people they are supposed to be "serving"! Their dedication and loyalty are to the Special Interest Groups who line their pockets with money. They are hypocrites and hooligans strutting like stupid roosters in their chicken house of Congress.

      They all, including the Obama Gang, need to be sent packing when they come up for re-election!

      It's time those in Washington start SERVING the interests of America and its People!

    11. Prevailer76AZ says:

      I question WHY ANYONE would perpetuate such destructive impositions as Cap and Trade that will do extreme harm to the financial structure of this nation. The same goes for the Health Care Plan that will do the same financially while destroying a Health Care system that is working for the majority of us. It's all based on smoke and mirror logic with hopeful persuasion of the masses to 'go along.'

      However, What do the Democrats have to gain with such overall slash and burn tactics? Have they no concern for this nation or the people they swore to serve?

    12. Bob Veigel, Arlingto says:

      The public might be more interested and better served in knowing the transparent costs of Obama's agenda. And those costs are: loss of freedom, loss of the free enterprise system, loss of liberty, loss of earnings and savings, and perhaps the greatest loss is the loss of choice. Wake up Americans or you will soon be slaves of the State.

    13. Jim@Redding,CA says:

      How about some actual realization of the

      unconstitutional atrocities being committ-

      ed each and every day by Obama? How about

      some actual action to rid ourselves of this single most dangerous threat to our

      sovreignity as a nation – BEFORE Obama

      hands it over to the UN at Copenhagen under the guise of "climate change control"? Either we do something now, or

      you can listen to more of me telling you:

      "I told you so…" Give more than a little thought to how our founding fathers

      went about dealing with this very same

      issue.

    14. Dean-Texas/Alaska says:

      The problem is that ALL of these issues are secondary to the REAL issue which is to collapse the USD, to destroy the American economy. Will that change in 2010?

    15. Joan Sarasota FL. says:

      All the people in this Obama goverment are like looking at a freak show. Which goes to show they were not mistakes on his part, but he took great care and effort to destroy this country.

    16. J. White, retired [c says:

      The climate changes every day as the Earth moves trhough its cycles of warm and cold. NOTHING that humanity does or ever can do is going to change a system of this magnitude.

      It is the sheer and utter ARROGANCE of some very stupid people who are GREEDy for POWER over others that promotes this cloud of verbal global fertilizer.

      By the way, as I used to tell my college students- ARROGANCE, GREED, and STUPIDITY are ALL related in a most incestuous way.

      I find it refreeshing that the Chinese and the Indians have basically told the arrogant joke known as the "Kyoto Accord"- "demanding" that they cut back "emissions" on their way to economic freedom and a better life for most of their citizens to 'kiss off'.

      The Earth is headed for another long colder spell; and making a 0.004 degree Celsiuus change is just another example of arrogant people trying to control your and my lives because THEY "think" that they are are superior to the rest of us. Isn't it just astounding, most amazing that we have come this far WITHOUT their self-presumed brilliance?

      Are these not the same arrogant females and some emasculated males who said the "….only the uneducated females would vote for Sarah Palin…"

      One really has to feel sorry for these cretins, and one also must make every effort to unseat them and throw them out of office for all time.

      As an engineer, scientist, and college professor, I have been involved from the reality side of the ecological issues for over 40 years…most of the so-called "environmentalists" I met were not scientists- but just "going by their feelings"….

      Gross pollution originally came from our sewage treatment plants- 85%, by the time when the EPA was started. On an national scale, major industries were not the major contributors to the pollution of our nation's waters….but, our flush toilets. The treatment plants I designed and train others to operate are now reducing 'pollutant loads' by 98-99%

      Now, if the truth were known, those plants use bacteria to breakdown the organics in wastes to- Ready for this????- carbon dioxide and water.

      So, what is the solution? Should we all die, but, when we deompose, we'll still be broken down by similar bacteria- and more carbon dioxide will be emitted….can't win for losing.

    17. LA Girl says:

      They really think that most Americans are not paying attention, but these latest bands of goons running our Government really don't care what the public wants or doesn't want. I guess folks that live in the Districts that are represented by Pelosi and Frank still think their constituents will keep voting them in power. Let's hope the people of San Francisco and Newton, MA won't continue to vote for these liberal who “want to control every minute of our lives" jerks. The voters don't want to make the hard decisions in their own lives they want government bureaucrat to do it for them. Barney Frank has been in Office since 1980, generally goes unopposed when seeking re-election, the Constituents continued to re-elect him to Congress even after a sex scandal and Pelosi has been in Office since 1986. Maybe that’s why both of these liberal liars support the medical marijuana. I don’t hold out hope that these two Districts will suddenly grow a brain and vote them out of Office. I thought that the voters in 12th District in Pennsylvania, John “Jack’ Murtha back into Office after he publicly ridiculed them, but the lemmings did. Murtha’s been involved in a number of scandals and yet he still wins re-election.

    18. Larry Hoffmann says:

      A good way to think about Cap and Trade (C&T) is to follow the money! Certain people and some companies stand to make a lot of money if C&T is enacted. The average citizen, however, stands to lose money because C&T will dramatically increase the cost of energy. Manufacturing costs will rise, making U.S. produced goods more costly and less competitive compared to goods produced overseas. U.S. companies will be forced to move overseas to remain competitive. Unemployment will rise. There will be negative effects on our way of life and general well-being. All this and no measurable effect on global temperatures or climate. Doesn't make a lot of sense does it?

    19. Mike Sierra Vista A says:

      Any question about the intent and cost of the Waxman-Markley will be answered clearly by the financial section

      of the UN Climate Change Treaty.

      The draft is out. The rules and requirements are out.

      Basically we will pay what they state is the current need.

      As of this moment, representatives of the German Government, have indicated that they have constitutional reservations about the proposed finance plan.

      We are ahead of them in terms of responsible financing.

    20. joan, connecticut says:

      We have to rid Washington of the people who are only interested in keeping their seats by bowing to the whims of lobbyists. The current Senate, has a few good men and women—VERY FEW —-Our only recourse is to lobby against the bad ones when they run for office again. Chris Dodd, is on his way out and Reid is soon to follow. Pelosi, hasn't conducted the House in the ethical way she promised,and Barney Franks is responsible for the thousands of home foreclosures, although he blames it on Bush. It appears that power corrupts and greed follows,giving Congress a feeling of superiority. We need term limits, and assurances that anyone making major decisions for The United States, be subject to background checks. It is the only sensible way to run a country.Let us take our country back in future elections, from those who do not care for anyone but themselves.

    21. Mike Sierra Vista A says:

      UN Climate Treaty Financial Clauses Sec 38 (Notes…)

      Three basic Pillars:Government; facilitative mechanism:

      and financial mechanism..

      a.)The government will be ruled by the COP…..

      b.)The Convention's financial mechanism will include a mutilateral climate change fund including five windows;

      c.) The Convention's facilitative mechanism will include…(work programs,technology action plans,d.) expert groups on adaptation,mitigation, monitoring and verification…

      Means of implementation

      must provide new, additional,adequate,predictable and sustainable financial resources..

      actions should be covered fully by developed nations..

      committments made must be legally binding with provisions made for (insuring) compliance.

    22. Ellen King New Alexa says:

      What is the point of talking about this, if no one will stop these people? Let me know when the revolutionaries are marching them out of there.!!!

    23. Dave Schraub, Indian says:

      A tax by any other name, is still a tax. It doesn't matter what they call it, it is still a tax. These facist in washington, have never seen a tax they didn't like. obamanites, how's that hope and change working for you now? obama is not the messiah.

    24. Randy, New Orleans says:

      Let's face it folks, this whole Global Warming thing is a total hoax. Obama and his Communist Goon Squad are just trying to steal more money out of the hard working Patrioits pockets. You now that Waxman, Al Gore, etal, are in it for their own personal profits. If this Cap and Tax preposal, Health Care Plan, or any other thing that the Obama Administration is trying to force down our throats is passed, America will cease to exist as we know it. Let's stand up and VOTE, VOTE, in 2010 and 2012 and stop this insanity! p.s. I truly miss our great Presadant Ronald Reagan.

    25. Judith in Michigan says:

      About the only positive thing to come out of this disastrous admin so far is that for the first time in decades, people are really starting to pay attention, are talking about issues with friends and family, studying the pros and cons of issues, and, most important, actually becoming familiar with The Constitution, The Bill of Rights, and The Declaration of Independance. People are getting involved!

      Now, if we could only get congress to pay attention….

    26. Ben C, Ann Arbor says:

      I have a ltter from Senator Carl Levin stating that climate change is a "settled science." All the CO2 generated by our efforts to enlighten him And the others will fall on deaf ears. He, like the others, are looking for tax revenue. As stated before, solar flares have more influence on the weather than humans – but you can't tax the sun.

    27. Wallyblu, Zion, IL says:

      Have they thought of the increase cost of heating our homes if the climate cools?

    28. Sharon in Yuma AZ. says:

      My greatest fear is that even after the elections in 2010 and 2012…we will not be able to oust this group…..they will be dug in like an Alabama tick…..

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