April 26, 2007 NEW CBO REPORT EXPOSES FAILURES OF C02 CAP-AND-TRADE SCHEMES
April 26, 2007
NEW CBO REPORT EXPOSES FAILURES OF C02 CAP-AND-TRADE SCHEMES
"The CBO has revealed that a C02 cap-and-trade allocation scheme will result in a transfer of wealth from poor to rich."
WASHINGTON, DC – Senator James Inhofe (R-Okla.), Ranking Member of the Environment & Public Works Committee, today said the new Congressional Budget Office (CBO) report on proposed C02 cap-and-trade legislation was a "devastating indictment." The CBO report laid out the negative impact a cap-and-trade system would have on Americans, in particular, the poor. The CBO report, titled "Trade-Offs in Allocating Allowances for CO2 Emissions," was released on April 25, 2007.
"The CBO report exposes what I have been saying all along: C02 cap-and-trade schemes are an utter failure," Senator Inhofe said. "The CBO has revealed that a C02 cap-and-trade allocation scheme will result in a transfer of wealth from poor to rich. The Democratic leadership has to explain why they are willing to line the pockets of their corporate friends at the expense of the working class.
"Far from being good for the economy, as advocates say, C02 allocation schemes will disproportionately burden the poor, raise taxes, increase government spending, raise gas prices, raise home energy costs and decrease wages. It is hard to imagine the CBO issuing a more devastating indictment of proposed C02 cap-and-trade schemes. The CBO report should be viewed as a stern warning to our elected leaders to avoid symbolic solutions to an alleged climate ‘crisis’ that places the financial burden on America’s poor and working class.
"Today’s report confirms what Europe, Canada and many other nations have come to realize about C02 cap-and-trade schemes: The entire carbon debate has been skewed toward the least effective and most economically damaging of the various approaches.
"Today’s CBO report is the most recent analysis to show the folly of schemes like the Kyoto Protocol. Kyoto, if implemented, would essentially result in the largest tax increase in the history of the U.S., costing an estimated $300 billion a year -- 10 times the cost of the Clinton-Gore tax increase of 1993. And even Kyoto proponents concede that it would have virtually no impact on the climate."
Excerpts from the CBO report (emphasis added):
"Regardless of how the allowances were distributed, most of the cost of meeting a cap on CO2 emissions would be borne by consumers, who would face persistently higher prices for products such as electricity and gasoline. Those price increases would be regressive in that poorer households would bear a larger burden relative to their income than wealthier households would."
"The CBO noted that the proposed cap-and-trade allocation method "would increase producers’ profits without lessening consumers’ costs. In essence, such a strategy would transfer income from energy consumers—among whom lower income households would bear disproportionately large burdens—to shareholders of energy companies, who are disproportionately higher-income households."
"Researchers conclude that much or all of the allowance cost would be passed on to consumers in the form of higher prices. Those price increases would disproportionately affect people at the bottom of the income scale. For example, the Congressional Budget Office (CBO) estimated that the price rises resulting from a 15 percent cut in CO2 emissions would cost the average household in the lowest one-fifth (quintile) of the income distribution about 3.3 percent of its average income. By comparison, a household in the top quintile would pay about 1.7 percent of its average income."
"A cap-and-trade program for CO2 emissions would tend to increase government spending and decrease revenues."
"The higher prices caused by the cap would lower real (inflation-adjusted) wages and real returns on capital, indirectly raising marginal tax rates on those sources of income."
To read the full CBO report, go to: http://www.cbo.gov/ftpdocs/80xx/doc8027/04-25-Cap_Trade.pdf
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IN CASE YOU MISSED IT…
Federal Wetlands Protection Programs are Working
By Sen. James Inhofe (R-Okla.)
April 24, 2007
Three years ago on Earth Day, 2004, President Bush outlined a new national goal for increasing the amount and quality of wetlands. The federal government’s numerous voluntary and cooperative programs that work with the landowner to preserve wetlands are an integral part of meeting the president’s goal.
Last Congress, I introduced the Partners for Fish and Wildlife Act, which authorized the Fish and Wildlife Service’s primary program for delivering habitat improvement projects on private land through voluntary agreements with private landowners. Much of the habitat protected through the Partners program is wetlands. As I noted when the Committee on Environment and Public Works passed my legislation, it is a true partnership between landowners and the government. From 1987 to 2006, Partners restored more than 800,000 acres of wetlands and plans to restore or enhance more than 45,000 acres in 2007.
I also sponsored the North American Wetlands Conservation Reauthorization Act (NAWCA) — P.L. 109-322. NAWCA leverages federal dollars with state and private dollars to conserve wetlands as habitat for migratory birds and other fish and wildlife. NAWCA projects involve multiple partners from all levels of government and nongovernmental and private organizations. From 1990 to 2006 the program leveraged $1.5 billion in matching funds and $809 million in non-matching funds to restore and protect millions of acres of wetlands. According to the Council of Environmental Quality’s report "Conserving America’s Wetlands 2006: Two Years of Progress Implementing the President’s Goal," in 2007, NAWCA is expected to improve 154,000 acres of wetlands and protect an additional 579,000 acres of wetlands.
While these programs hold the rights of the property owner sacred and work with landowners to protect our environment, the 404 permitting program is a federal regulatory program with the ability to impose often burdensome requirements that may devalue an individual’s property. Projects seeking Section 404 permits have significant economic development impacts for local communities that are best suited to determine local growth patterns. Data from the Corps indicates that in fiscal year 2006, permittees requested to impact 17,505 acres of wetlands. Ultimately, 3,618 acres were avoided and 13,887 acres were permitted. The Corps required permittees to create, preserve, enhance or restore more than 38,000 acres of wetlands.
Stakeholders have long expressed frustration with the permitting process, including the length of time it takes to process Section 404 permits. A study by David L. Sunding and David Zilberman found that it took an average of 405 days to process an individual permit and 788 days from the time the permittee began preparing the application. According to the Corps, the average processing time is at most 230 days. This number however does not reflect the time between submission of the application and the Corps’s determination that the application is complete.
One of the main concerns with the regulatory process is the lack of a clear standard for determining when a permit is required. In this regard, it is imperative that the Corps and EPA clarify the definition of "waters of the United States." The federal government owes it to the regulated community to have a clear, concise and understandable definition of "waters of the United States." When dealing with federal regulatory authority it is critical that federal law is consistent, easily understood and within the limits of the Constitution, in this case meaning the Commerce Clause.
Our government is "for the people," not in spite of the people. Individual property owners have the right to determine how to use their property. We should not be fashioning federal policy to take away the value of someone’s property. The Constitution provides them protection from just such an action. Every homeowner in America is a private property owner. Most of them would not react well to the federal government telling them to control rainwater running down their driveways from washing their cars or watering their lawns. That is not completely out of the realm of possibility, however, if the scope of the Clean Water Act is the outer limits of Congress’s constitutional authority.
Regulatory clarification of the federal definition coupled with more emphasis on programs that seek to cooperate with the nation’s landowners will go far in protecting and preserving wetlands, providing for locally driven development and preservation of private property rights. No one wants to endanger wetlands or our nation’s water supply. Everyone should want federal programs that work with the people, just as the Founders intended.
Inhofe is ranking member of the Senate Committee on Environment and Public Works.
SENATOR INHOFE OPENING STATEMENT
Hearing on the Supreme Court’s Decision
in Massachusetts V. EPA
Tuesday, April 24, 2007
Thank you for having this hearing today Madame Chairman, so that we may examine the recent Supreme Court decision that, more than any other in recent years, usurps Congressional authority. It represents judicial activism at its worst, where five justices chose to place their own policy concerns above the rule of law.
Through this decision, the Court’s liberal justices have not only chosen to provide the executive branch with authority it clearly was not granted, but to create a regulatory quagmire in which EPA is granted the authority to regulate carbon dioxide through a statute which clearly was not intended to deal with it. Ironically, when the Clean Air Act was passed in the 1970s, the doomsayers in society were not saying the world was going to turn into a ball of fire, but into a ball of ice.
The simple fact is that this issue is not only extremely complex from a scientific perspective, but also from an economic one. How it is handled will have profound consequences for every American because fossil-fueled energy is the very lifeblood of our economy. Attempts to eliminate greenhouse gas emissions will bring with them as-yet unimagined hardships to America’s poor, elderly and the working class.
The Constitution clearly intended Congress to be the branch of government to deal with extremely intricate and far-reaching questions, not for the executive branch to be handed sweeping authority based on tortured and stretched interpretations of statutory language.
But we are where we are. The Supreme Court has ruled. It has ruled unwisely, but it has ruled.
I do not envy you Mr. Administrator. No doubt you are being pressured to exercise the authority you have had forced upon you and to make carbon regulation the central organizing principle of our society. But I caution you against it.
I suspect that you, as a scientist, are all too well aware of how politicized the science of climate change has become. In the rush to forge a consensus, there has been a coordinated effort to squash scientific findings and voices which the alarmists find inconvenient.
Yet as John Kollias recently wrote in the San Antonio Express News, “the ‘scientific consensus’ used to be that the Earth was flat, that the sun traveled around the Earth and, until 30 years ago, that we were entering a new ice age.”
Our understanding of the climate is now in its infancy and more information is coming in all the time. Just last year, it was discovered that trees emit methane, a potent greenhouse gas. If we did not know trees – which are seemingly everywhere – emit methane, what else don’t we know about this planet. As it turns out, quite a lot.
A study published last week [April 18th] in Geophysical Research Letters finds that wind shear in the Atlantic will increase with global warming, leading to fewer and weaker tropical storms. Looks like Al Gore got it wrong again. Apparently, the hurricanes might not be so angry after all.
In assessing whether greenhouse gases endanger public health and welfare, how will you evaluate the most recent cutting edge findings which demonstrate what we all know to be true – that climate fluctuations, whether natural or caused by man, will have good as well as negative consequences? How will you work into your analysis the number of deaths and economic damage that would be averted in a warmer world due to increased wind shear and thus, decreased Atlantic storm activity? How will you calculate increased food production from longer growing seasons? In short, how will you quantify both sides of this equation?
I’m sure you recognize that national ambient air quality standards for greenhouse gases cannot be crafted without putting every county in the nation into nonattainment. Since, even in theory, States could not possibly craft Implementation Plans showing they would attain a NAAQS standard, wouldn’t EPA have to disapprove their plans and take over the programs? Since China will become the world’s biggest carbon emitter this year, wouldn’t this mean we’re putting China and other developing countries in charge of whether States receive their highway dollars?
The Clean Air Act was never designed to control carbon dioxide. As Richard Lindzen, a MIT climate scientist, said on the Weather Channel in March, “Controlling carbon is a bureaucrat’s dream. If you control carbon, you control life.”
Mr. Administrator, you have a mess on your hands. I urge you to think carefully before you proceed.
WSJ Examines Highway Funding
WSJ Examines Highway Funding
IN CASE YOU MISSED IT…
THE WASHINGTON TIMES
INHOFE DARES HOLLYWOOD TO TAKE WARMING PLEDGE
By Eric Pfeiffer
A leading skeptic of global-warming science is challenging celebrity activists such as Al Gore and Sheryl Crow to lower their "carbon footprint" to the same level as the average American by Earth Day in April 2008.
"I simply believe that former Vice President Al Gore and his Hollywood friends who demand we change the way we live to avert this over-hyped 'crisis' not only talk the talk, but walk the walk," said Sen. James M. Inhofe, Oklahoma Republican.
"How hard is it for these elitists to become as frugal in their energy consumption as the average American? I think the American public has a right to know they are being had."
A so-called "Gore Pledge" was introduced last month when the former vice president appeared before a Senate committee to discuss his views on climate change. Mr. Inhofe asked Mr. Gore to sign the pledge to reduce his use of products that produce greenhouse gases, but he declined, instead citing alternative carbon trade-offs.
Mr. Gore says he pays a self-imposed "carbon tax" to offset the environmental impact of his large home and global travels.
Mr. Inhofe, the ranking Republican on the Senate's Environment and Public Works Committee, has long been an adversary of proponents for environmental legislation. Several of his previous comments, including referring to global warming as a "hoax" while chairman of the Senate committee in the last Congress, angered environmental activists.
Calls to the office of Sen. Barbara Boxer, California Democrat, who chairs the Environment and Public Works Committee, were not returned.
Mr. Inhofe, along with fellow Republican senators, has threatened to filibuster climate change legislation introduced by Mrs. Boxer.
Miss Crow has made headlines in recent weeks by traveling in a bio-diesel fueled bus during her recent concert tour in support of raising awareness about global climate change. During Saturday's annual White House Correspondents Association Dinner, Miss Crow and Laurie David, wife of "Seinfeld" co-creator Larry David, had a heated exchange with White House adviser Karl Rove about the issue.
"What science do they have? They cannot tolerate dissent," Inhofe spokesman Marc Morano said of the exchange during an appearance on the Fox News Channel yesterday.
Yesterday, the Web site thesmokinggun.com revealed that Miss Crow's tour caravan includes three tractor-trailer rigs, four buses and six cars.
In addition, Miss Crow was in the news yesterday for advocating limits on the use of toilet paper as a way of wiping out global warming.
"I propose a limitation be put on how many squares of toilet paper can be used in any one sitting," Miss Crow wrote on her blog. "Although my ideas are in the earliest stages of development, they are, in my mind, worth investigating."
In his letter, Mr. Inhofe also singled out other celebrity activists, including John Travolta, Leonardo DiCaprio and Madonna.
SENATOR INHOFE OPENING STATEMENT
Oversight Hearing on the Nuclear Regulatory Commission
Wednesday, April 25, 2007
First I want to thank Chairman Carper for holding this oversight hearing today. This is the tenth in a series of oversight hearings that began in 1997 when I was the Chairman of this Subcommittee, and Senator Voinovich later continued that tradition. Prior to that first hearing there had not been an NRC oversight hearing in more than a decade.
I think Senators’ Carper and Voinovich would both agree with me that every bureaucracy needs oversight and the NRC has certainly improved immensely over the last 10 years. I would have to say that the NRC has developed into a model agency, and I was pleased to hear that the NRC has been ranked as the best agency to work for in the Federal government.
I must say that in order for the agency to succeed, you must have good leadership and I believe we have had some outstanding Commissioners and Chairmen over the last decade. I want to publicly thank Commissioner Merrifield for his service and dedication, this is probably your last hearing before this Committee, at least as a Commissioner, and you have done an outstanding job.
I would also like to recognize Commissioner McGaffigan, I was happy to hear that your health had improved to the point that you have withdrawn your resignation. I am looking forward to you completing your current term, and I hope you will consider an additional term.
That being said, there are many challenges before the Commission, and there is always room for improvement. I have a few issues that I hope you will address in your statements, and I will follow up during my question and answer.
1. At our hearing last June we discussed the NRC receiving 11 Combined License Applications (COLs). I now understand that you may receive as many as 22 over the next two years. I had concerns last year on whether you were prepared for 11. Are you prepared now for 22? How long do you think each COL will take to process?
2. I agree with Senator Voinovich that the guaranteed loan program is vital to ensuring that we have a new nuclear fleet, and I’m open to suggestions on how this program can be expanded.
3. While I am pleased that you are finalizing the “Part 52 Rule,” for early site permits, I am also concerned about the delays in getting the final rule out and I hope its not a sign of too many agency bottlenecks as we move forward.
4. We need to get Yucca Mountain open and accepting waste as soon as possible. While I understand you cannot prejudge the application, I do want to know whether you need any additional resources or legislative authority to deal with the waste issues.
5. Finally, on security, I think you have done a very good job, we have had a number of closed-door security briefings in this Committee in the past, and I hope those continue. While you must remain diligent in guarding against new risks, you must also balance that against making too many changes in the regulations before all of the security measures have been put into place.
Clinton EPA Administrator’s Coulda, Shoulda, Woulda
April 24, 2007
During today’s Senate Environment and Public Works hearing, former Environmental Protection Agency (EPA) Administrator Carol Browner demanded the current agency immediately regulate greenhouse gases now that the United States Supreme Court has ruled that the agency may do so under the Clean Air Act. Browner asserted that the Bush Administration should be able to take action within six months or less to regulate C02.
FACT: The reality however, as explained by EPA’s former general counsel Ann Klee, is that there is a complex set of decisions that need to be made. This is an extremely complex issue, where dozens of provisions of the Clean Air Act need to be evaluated.
While Browner denies this complexity now -- she declared that this is a "moral" issue in which the current EPA must and can act quickly -- her own words and actions betray her.
In 1997, in a speech at Florida State University, Browner said that "The science of this phenomenon is compelling…Do we know everything there is to know about global climate change? No. Do we know exactly what will happen in the decades ahead? Of course not. But we have enough to go on – based on years of rigorous scientific analysis – to know that we must begin dealing with this problem. And we should act sooner, rather than later…"
In 1998, before a House Appropriations Subcommittee, Browner was asked if she thought the Clean Air Act allows the EPA to regulate the emissions of carbon dioxide. Browner replied "I think we are granted broad authority under the Clean Air Act to." Additionally, she obtained a legal memo from her General Counsel supporting her position.
When asked by Senator Inhofe today why she did not act – if she believed the science justified action and she had the authority to act – Browner replied, "We were working on it and if we had been given another four years, I am sure we would have done it."
Apparently Browner believes that what would have taken her 12 years to accomplish should only take the current EPA six months.
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