Boxer Climate Tax to ‘bore new holes into an already battered economy’ – ‘Green Slush’ - ‘Monopoly money’ – News Round Up
June 2, 2008
Posted By Marc Morano - 2:03 PM ET - Marc_Morano@EPW.Senate.Gov
Boxer Climate Tax to ‘bore new holes into an already battered economy’ – ‘Green Slush’ - ‘Monopoly money’
News Round Up
Link to Lieberman-Warner Climate Bill Exposed Page: www.epw.senate.gov/lieberman-warnerbillexposed
Cleveland Plain Dealer: Carbon cap-and-trade bill is going nowhere, for good reason – editorial – June 01, 2008
Excerpt: The bill, as conceived, will just bore new holes into an already battered economy. It also doesn't have a prayer of becoming law. [...] the bill's supporters evince crass disregard for the economic realities of hard-hit manufacturing states. [...] Yet the hammer-and-tong approach of the Senate bill - originally sponsored by Democrat Joe Lieberman of Connecticut and Republican John Warner of Virginia and recently tweaked by Democrat Barbara Boxer of California - lacks even a semblance of balance. Coal-dependent states with partially deregulated energy prices - Ohio, for instance - would take a double hit in economic dislocations and electricity price spikes, with barely any financial cushions to make the disruptions more palatable. The bill also lacks the kind of consumer fairness and flexibility necessary to avoid fuel-price shocks and damage to manufacturing nationwide. Those who have watched the Europeans' cap-and-trade system deteriorate into a nightmare of bureaucratic costs, nonsensical investments in outdated factories in China and puzzling price spikes in which the utilities were the only clear winners can be excused for scratching their heads over why cap-and-trade remains the "only" idea worth pursuing. Surely there are less cumbersome, more equitable ways of making carbon emissions more expensive, and thus spurring investment in new technologies, without breaking the banks of both small-town and industrial Ohio.
Excerpt: Ms. Boxer expects to scoop up auction revenues of some $3.32 trillion by 2050. Yes, that's trillion. Her friends in Congress are already salivating over this new pot of gold. The way Congress works, the most vicious floor fights won't be over whether this is a useful tax to create, but over who gets what portion of the spoils. In a conference call with reporters last Thursday, Massachusetts Senator John Kerry explained that he was disturbed by the effects of global warming on "crustaceans" and so would be pursuing changes to ensure that New England lobsters benefit from some of the loot. Of course most of the money will go to human constituencies, especially those with the most political clout. [...] The Senator estimates that the value of the handouts totals $3.42 trillion. For those keeping track, that's more than $6.7 trillion in revenue handouts so far. The bill also tries to buy off businesses that might otherwise try to defeat the legislation. Thus carbon-heavy manufacturers like steel and cement will get $213 billion "to help them adjust," while fossil-fuel utilities will get $307 billion in "transition assistance." No less than $34 billion is headed to oil refiners. Given that all of these folks have powerful Senate friends, they will probably extract a larger ransom if cap and trade ever does become law.Grist: Climate Bill’s $6.7 Trillion carbon credits ‘Feels a bit like Monopoly money’ –May 21, 2008
Excerpt: Barbara Boxer distributed this breakdown detailing how the dolla billz will be spent in her proposed amendment to the Lieberman-Warner Climate Security Act. There are more than $6.7 trillion in carbon credit allowances and auction revenues that will be distributed over the life of the bill, and this shows where that goes. Feels a bit like Monopoly money, doesn't it?
Excerpt: The White House on Monday slammed legislation the U.S. Senate will consider this week aimed at controlling climate change, arguing it would cut economic growth and lead to soaring gasoline prices. "As you can imagine, our opposition to this will be quite strong and we'll be making these points throughout the week," Keith Hennessey, director of President George W. Bush's National Economic Council, said at a White House forum on the economy and taxes. U.S. gross domestic product could be reduced by as much as 7 percent in the year 2050 and gasoline prices -- already at record highs in the United States-- could soar by as much as 53 cents a gallon by 2030, he said. The legislation the Senate will debate, which is not expected to become law this year amid a presidential election, could cut total U.S. global warming emissions by 66 percent by 2050, according to a summary of the measure. U.S. greenhouse gas emissions would drop by about 2 percent per year between 2012 and 2050, based on 2005 emission levels, under the measure. The bill would cap carbon emissions from 86 percent of U.S. facilities, and emissions from those would be 19 percent below current levels by 2020 and 71 percent below current levels by 2050, according to a summary of the bill's details released by the Senate Environment and Public Works Committee. The Bush administration has consistently opposed an across-the-board cap-and-trade program for carbon dioxide, a greenhouse gas emitted by fossil-fueled vehicles and coal-fired industries, as well as by natural sources including human breath.
Excerpt: Former Congressman Pat Toomey, now of the Club for Growth, mentioned on the Cavuto Business Hour that green pressure groups might receive some part of the trillions of dollars that Lieberman-Warner will extract from the productive sector of the economy by the energy taxes found in that bill. He specifically claimed that greens might receive allocations of ration coupons, along with organized labor and other favored groups, which they could then sell. Lieberman-Warner’s champions claim that the revenues raised by the bill will be steered toward refunds to consumers paying increased energy costs. (In which case, why not offer a revenue-neutral carbon tax instead? Too transparent?) Even if the greens aren’t directly given ration coupons to sell, there is always the danger of slush funds in schemes like this, whereby some of the revenues raised by the bill might indirectly find their way to the greens. Either way, if true, it would of course be explosive. A full reading of Lieberman-Warner’s details shows that the latter form of green subsidy is in fact envisioned, and presented below. This reveals at least one form of energy-tax funded underwriting of green groups and their various franchisees to do what they do — only under Lieberman-Warner, it would be on your dime, whether you like it or not. A small provision tucked deep into the bill creates a revenue stream for them to train other countries on how to agitate against the U.S., seek their own U.S. taxpayer-provided rents, and otherwise advocate for the green agenda:
Excerpt: Consumers are already struggling with gasoline approaching $5 a gallon and other utility costs that have been moving steadily higher for the past few years. New mandates placed on producers in the name of "global warming" will only make matters worse. Even those who worship at the church of global warming agree that many Americans might not be eager to cap emissions if they realized the price. "This debate is going to be mostly about costs," Daniel Lashoff, director of the Climate Center at the Natural Resources Defense Council, told The Associated Press. "But we want to make sure in that debate we don't forget that the cost of inaction on global warming would be much higher than the cost of the emission reductions called for in this bill." In fact, Mr. Lashoff knows that this bill will do little -- if anything -- to actually impact any warming trend. In a paper for the Heritage Foundation, Ben Lieberman notes that "a number of economists, including many who are far from global warming skeptics, warn of overly aggressive cap and trade measures imposing costs exceeding the benefits. In other words, the costs of implementing such measures would be higher than the value of the global warming damage that they would prevent." In reality, this legislation is a Trojan horse that will impose strict federal command-and-control regulations on the economy -- for which consumers will pay billions over the coming decade.
Excerpt: But there is a group of people conspiring to make energy more expensive for Americans. That group is the U.S. Senate, and this week it will debate a bill that would impose a cap-and-trade system on greenhouse-gas emissions. By rationing the use of fossil fuels, the bill would lead to higher coal, natural-gas, and petroleum prices, even though the prices of those commodities are already at historic highs. Everybody knows about oil prices; less well known is that the price of natural gas recently reached its highest point since Hurricane Katrina disrupted supplies in September of 2005. Coal prices have tripled in the past year due to global shortages. In short, now would be an exceptionally bad time for Congress to make energy more expensive. Yet that is precisely what the cap-and-trade bill sponsored by Sens. Joseph Lieberman and John Warner would do. Under a cap-and-trade system, a company can only emit greenhouse gases up to a certain limit (the “cap”). If it exceeds that limit, it must purchase allowances, either from the government or from other companies that are under their limits (the “trade”). […] By contrast, the EIA estimates that the Lieberman-Warner bill would depress U.S. GDP by up to 1 percent a year by 2030. The bill’s supporters are asking Americans to sacrifice a lot of jobs and money up front to stave off a theoretical future crisis that wouldn’t be that much worse.
Excerpt: The tradeoff: the economy or the environment? There’s no free lunch. A bigger emissions cut will cost more than a smaller cut. It will raise energy prices more, it will require more-expensive technology, it will deepen concerns about U.S. economic competitiveness against developing countries, like China, that haven’t committed to emission caps. There are myriad studies about how much all this will cost the economy, but fundamentally the debate here is over where to draw this line. Should the bill err on the side of giving companies carbon-price certainty, as carbon-tax proponents want, or on the side of slashing emissions hard, as environmental groups want? Complex price-control mechanisms in the Boxer amendment to the bill attempt to strike a balance. Expect big pressure to shift it. Nothing much will happen. With gasoline prices nearing $4 a gallon as the summer driving season approaches, and with a presidential election five months away, essentially nobody expects the Senate now to actually pass climate legislation, because doing so would push up the energy prices that voters pay. This week’s fight on the Hill is about establishing talking points for the election – and battle lines for the real policy fight expected in 2009 or 2010. There will be lots of atmospherics this week, but they’ll probably have little effect on the atmosphere.
Excerpt: The Senate is meanwhile debating the Lieberman-Warner bill, which would deliberately tax gasoline and every other fossil fuel more and more heavily until we stop using them. That’s to “save us” from global warming. [...] The crowning irony is that NASA now says the Pacific Ocean has entered a 25–30 year cooling phase. The last time this happened was from 1940–1975, when we had moderate, erratic global cooling. The climate science shows a 79 percent correlation between our temperatures and sunspots but no correlation with CO2. This means CO2 cannot be the dominant factor in our climate. So the high gas prices, the reliance on foreign oil, the loss of American jobs in the oil and coal and potential jobs in the nuclear fields are all for naught.
National Review Online: Hyperbole, Thy Name Is Boxer – June 01, 2008
Excerpt: Hyperbole, Thy Name Is Boxer[Chris Horner] Speaking of giving things a bad name, check out Senate Environment Committee Chair Barbara Boxer’s hyperbole in the Democratic radio address on Saturday: “The fact is that the overwhelming majority of scientists say that the earth is in peril if we don’t act now. They’ve [remember, “they” are “the overwhelming majority of scientists”] told us clearly that more than 40 percent of God's creatures could face extinction if we don't act now. They’ve [again, that’s “the overwhelming majority of scientists”] told us of more intense weather events if we don't act now.” Actually, the number of scientists on record in support of the alarmist case is a fraction of those who have gone on record, however one divines relevant opinion. She continued: “And military leaders have told us that unchecked global warming will lead to severe conflict and war as droughts, floods and rising sea levels create huge numbers of desperate refugees.” Military leaders . . . saying this will happen. This presumably refers to Hugo Chávez, who teamed with several of his ilk to champion Kyoto as a social-justice measure to remedy the North-South wealth disparity.
Newspapers around the country speak out against Lieberman-Warner
LAS VEGAS REVIEW JOURNAL: “Consumers are already struggling with gasoline approaching $5 a gallon and other utility costs that have been moving steadily higher for the past few years. New mandates placed on producers in the name of ‘global warming’ will only make matters worse.” (Editorial, “Global Warming? Hold On To Your Wallets,” Las Vegas Review Journal, 06/02/08)
THE PLAIN DEALER: “The bill, as conceived, will just bore new holes into an already battered economy.” (Editorial, “Carbon Cap-And-Trade Bill Is Going Nowhere, For Good Reason,” The Plain Dealer [Cleveland, OH], 06/01/08)
PITTSBURGH TRIBUNE-REVIEW: “If there indeed is a second Great Depression to come, this will be the government measure that guarantees it arrives with a devastating gut punch.” (Editorial, “The Climate Security Act?: Reject The Ignorami,” Pittsburgh Tribune-Review, 06/01/08)
SAN FRANCISCO CHRONICLE: “The Senate debate on the climate bill probably will focus on its impact on energy prices and the economy, which in the short run could be considered significant.” (“Senate Taking Up Key Climate-Change Bill,” The San Francisco Chronicle, 06/02/08)
THE VIRGINIA PILOT: “Would the cost of allowances be passed on to consumers in the form of higher energy prices? Yes. The U.S. energy information agency estimates that the additional annual cost of electricity could reach $325 per household by 2020.” (“Q&A: The Climate Security Act,” The Virginia Pilot, 06/02/08)ASSOCIATED PRESS: “With gasoline at $4 per gallon and home heating and cooling costs soaring, it is getting harder to sell a bill that would transform the country's energy industries and - as critics will argue - cause energy prices to rise even more.” (“Economic Cost Drives Senate Climate Debate,” AP, 06/01/08)
WALL STREET JOURNAL: “This is easily the largest income redistribution scheme since the income tax.” (Editorial, “Cap And Spend,” The Wall Street Journal, 06/02/08)
NEW YORK POST: “[T]he only thing it will cool is the US economy. In effect, the bill would impose an average of more than $80 billion in new energy taxes every year.” (“Cap & Trade: Why It’s Tax & Spend,” The New York Post, 06/02/08)
ROBERT SAMUELSON: “…let’s call it by its proper name: cap-and-tax.” (“Just Call It ‘Cap-And-Tax,’” The Washington Post, 06/02/08)
GEORGE WILL: “Speaking of endless troubles, ‘cap-and-trade’ comes cloaked in reassuring rhetoric about the government merely creating a market, but government actually would create a scarcity so that government could sell what it had made scarce.”(“Carbon’s Power Brokers,” The Washington Post, 06/01/08)
CHARLES KRAUTHAMMER: “There's no greater social power than the power to ration. And, other than rationing food, there is no greater instrument of social control than rationing energy, the currency of just about everything one does and uses in an advanced society.” (“Carbon Chastity,” The Washington Post, 05/30/08)
HUMAN EVENTS: “It will significantly increase the price Americans pay for gasoline and electricity. ‘Cap and trade’ is an economy-killer.” (“Senate Boondoggling On Global Warming,” Human Events, 06/02/08)
THE HILL: “A bill that the senate will debate after Memorial Day could add about 50 cents to the price of a gallon of gasoline, according to a study.” (“Warner-Lieberman Bill Could Raise Gas Prices,” The Hill, 05/19/08)
WALL STREET JOURNAL: Boxer climate tax bill “would impose the most extensive government reorganization of the American economy since the 1930s.” (Editorial, “Climate Reality Bites,” The Wall Street Journal, 05/27/08)
INVESTOR’S BUSINESS DAILY: “The bill essentially limits how much gasoline and other fossil fuels Americans can use, as Klaus puts it, ‘in the name of the planet.’ A study by Charles River Associates puts the cost (in terms of reduced household spending per year) of Senate Bill 2191 at $800 to $1,300 per household by 2015, rising to $1,500 to $2,500 by 2050. Electricity prices could jump by 36% to 65% by 2015 and 80% to 125% by 2050.” (Editorial, “The Carbon Curtain,” Investor’s Business Daily, 05/29/08)
FORBES: “Kennedy and other skeptics say ‘cap-and-trade’ is little more than a tax on energy. True enough: market-based or not, the government would mandate that emitters pay for something they essentially do for free now.” (“Cap And Trade Comes To Congress,” Forbes, 06/02/08)