406 Dirksen EPW Hearing Room

James M. Inhofe


Subcommittee on Private Sector and Consumer Solutions to Global Warming and Wildlife Protection Hearing on
"Economic and International Issues in Global Warming Policy"
Tuesday, July 24, 2007

Thank you for holding this hearing, Mr. Chairman. It is refreshing that we are beginning the process of examining substantive issues that need to be examined before any individual piece of legislation can be seriously considered. It is my hope that this approach will be adopted at the full Committee as well so that all the Members of the Committee can begin examining the nuts and bolts of how various approaches would operate. We need to begin looking at the economics – both at what works and what doesn’t work.

It seems clear to me, though, that the carbon cap-and-trade approach itself is what doesn’t work. The Kyoto Protocol is an international beacon warning our nation of what not to do. The failure of the United Nations’ grand experiment is not a lesson in how better to tinker with its structure so that the next time it might possibly, hopefully work. No, the lesson is more fundamental. It is the lesson of a failed approach. Let me be clear: carbon cap-and-trade systems will never work.

This body has now passed two resolutions on climate change that are similar. The Byrd-Hagel Sense of the Senate, which passed 95 – 0, resolved that the U.S. should not be a signatory to any international agreement that would result in serious harm to the U.S. economy or did not mandate reductions from the developing world. Similarly, the Bingaman Sense of the Senate resolved that the U.S. should address global warming as long as it will not significantly harm the United States economy and encourages comparable action by other nations that are major trading partners and key contributors to global emissions.

Not a single bill before Congress meets these criteria – not one. They range from costly to ruinous. But they all fail to meet the requirements of Byrd-Hagel or Bingaman.

For instance, according to an MIT study, the Sanders - Boxer bill would cost energy sector consumers an amount equal to $4,500 per American family of four. The same study found the Lieberman - McCain bill would cost consumers $3,500 per family of four. And a new EPA analysis released less than an hour ago shows the Lieberman – McCain bill would cost up to half a trillion dollars by 2030 and $1.3 trillion by 2050 – and that was based on assumptions designed to low-ball the number, making me wonder how high the real figure would be.

It does nothing to encourage reductions from the world’s largest emitter of carbon dioxide – China . That’s right, China just surpassed the United States as the world’s largest emitter.

In fact, like all these bills, it would worsen the problem. Even the Bingaman bill would export hundreds of thousands of jobs – mostly to China . But the U.S. emissions as a measure of productivity are far lower than China’s, or Europe ’s for that matter. So every job sent there will increase emissions, not lower them. China has made it abundantly clear that it will be decades before it signs onto mandatory limits because it wants to grow – and unilateral global warming bills will help them do so at our expense.

As Lu Xuedu, Deputy Director General of China ’s Office of Global Environmental Affairs, said last October:

“You cannot tell people who are struggling to earn enough to eat that they need to reduce their emissions.”

Cap-and-trade in theory offers certainty in emissions, but volatility in price. But in practice, it has offered certainty in neither. Taxes offer certainty in price, but not emissions. I oppose unnecessary taxes as a matter of principle, and putting a price on carbon is clearly in my mind unnecessary. But that said; we cannot ignore that Congressman Dingell is right that taxes are a more straightforward and efficient approach than cap and trade, and would at least probably work.

I don’t want a tax. But given a choice between the two, a tax is the more honest approach because at least we know what we’re singing up to.

There are two other issues I would like to raise, which are two that these bills also fail on. The first is the issue of layered climate regulatory mandates. We are in the process of crafting an international agreement on how to proceed on greenhouse gases that should be complete within 18 months or so. We are also debating national mandates on greenhouse gases and many States must comply with their own new mandates.

It makes no sense to have national mandates with States having different requirements. I support States’ rights, but it makes no sense for a State program to supersede a national program, any more than it makes sense for us to unilaterally sign up to national caps without ensuring developing nations join us. If it is a global problem, and we have a national approach to the issue, State programs should be pre-empted.

The last issue is the question of why are we even doing this? Hypothetically, for arguments sake, if there really is a man-made problem, shouldn’t any legislation – especially legislation which will enrich China at our expense – solve the supposed problem? None of the bills before Congress do so. Even the Kyoto Protocol, according to Gore’s scientist Tom Wigley, if fully implemented and complied with, would only reduce temperatures by 0.07 degrees Celsius in 50 years. If the answer is that these bills are just the first installment and that more will follow, shouldn’t we be debating what the total cost of going down this road will be?

Thank you.