406 Dirksen EPW Hearing Room

James M. Inhofe


 Hearing on State, Regional, and Local Perspectives on Global Warming
Thursday, March 01, 2007
Thank you for holding this hearing, Madame Chairman.
Today we are discussing State perspectives on climate change. As you know, the States are 50 laboratories of this country – each taking a unique policy pathway forward. In doing so, the experiments give federal policymakers examples of what policies work. Of course, the federal government also has examples of failed ideas it should avoid repeating at all costs – cap and trade ranks high among these.
Multiple approaches have been taken that purport to address climate change. Some states have clean coal R&D programs, others have tax credits for renewable energy or hybrid cars, and still others have renewable portfolio standards.  Most of these States have taken a pragmatic approach that recognizes the uniqueness of their circumstances.
A group of Northeastern States and California have enacted cap and trade programs to reduce emissions. Additionally, four Governors have joined Governor Schwarzenegger in pledging to come up with plans to reduce emissions. Today we will hear how ambitious and important they are, and what they plan to accomplish. But these programs haven’t accomplished anything. They are simply empty promises that won’t be kept and denials about costs that will surely be paid.
California is a good example of an empty promise – it passed a law bringing emissions back to 1990 levels by 2020. This baseline was not chosen arbitrarily, but to support the Kyoto Protocol, which also uses a 1990 baseline. Since Kyoto is the only cap and trade program that is under way, it’s worth asking – how well is that program working?
Of the 15 original EU countries, only two will meet their targets – Sweden and Britain, and Britain only because it eliminated its coal industry in the early 90s. And like most signatories, Canada and Japan won’t meet their targets either. The simple fact is that the U.S. has spent more federal dollars on basic science, as well as research and development, and done more to reduce our emissions rate than Europe since 2000. How did we do that? – By rejecting Kyoto’s cap and trade approach.
The simple fact is jobs are fleeing the EU because of its experiment into cap and trade.  And China – which will become the world’s biggest emitter of greenhouse gases in 2009 – and India and other developing nations will never sign on. As Lu Xuedu, Deputy Director General of China’s Office of Global Environmental Affairs, said in October: “You cannot tell people who are struggling to earn enough to eat that they need to reduce their emissions.”
That is why the California and RGGI programs will fail. Although each of these regions has yet to pay the costs, there will be costs. Jobs will flee these states, costs will go up and purchasing power will decline.
In the RGGI states, for instance, Charles River Associates estimated a similar proposal would cost the region 18,000 jobs in 2010. Electricity prices would rise 9 percent, hitting the elderly and poor the hardest, with the poor having to shoulder an increased burden more than double that of the rich due to the costs of energy. Similarly, purchasing power would decline $270 per family in 2010 and worsen annually.
California will fare as badly. While the program they plan to implement the law is so uncertain economic modeling is difficult, the targets and timing suggest that the Wharton Econometric Forecasting Associates Kyoto Protocol study is useful. That study found California would see its economy decline by about 1% and 278,000 jobs.
Let’s be honest about what these programs and their companion proposals here in Congress really are – they are the biggest tax increase in U.S. history. In fact, they are worse than taxes because they will cost more and be less effective. And the only reason the alarmists have not proposed an outright tax yet is they know it will be more difficult to reward the climate profiteers supporting them in their efforts.
In closing, I will simply say that I find it ironic that the liberals are so openly crafting programs to directly benefit powerful corporations and interest groups at the expense of the poor, elderly and working class.
Thank you.