Energy & Environment

All-Republican Government Will Weigh CO2 Caps

The all-Republican federal government may impose new regulations on carbon dioxide emissions this year, either through the efforts of the Bush Administration or of Senators John McCain (R.-Ariz.) and Joseph Lieberman (D.-Conn.), who proposed a new Senate bill last week.

The administration-which has had a mixed record on the issue of limiting carbon emissions-is expected to take a more voluntary, industry-friendly approach when it makes a proposal later this month. The McCain-Lieberman bill, on the other hand, would compel major carbon emitters-mostly industry and utilities-to cut carbon dioxide emissions to their year-2000 levels by 2010, and to their 1990 levels by 2016. Either way, conservative economists say, the regulations would harm the economy in both the short and the long run.

The Senate measure would give "emissions credits" to polluters, who could use them to emit carbon dioxide (CO2) or sell them to other polluters. This "cap-and-trade" system is similar to that set forth in the Kyoto treaty, which was soundly rejected in a 95-to-0 bipartisan Senate vote in 1997.

The proposed regulations on carbon dioxide-a non-toxic gas emitted by humans and animals when they breathe and through the burning of organic materials-stem from some scientists’ worries that global temperatures have risen slightly over the past century as a result of human activity. These scientists theorize that CO2 traps heat in the atmosphere, causing the earth to warm. The gas’s concentration in the air has increased by about 17% since 1958, according to figures compiled at the Oak Ridge National Laboratory in Tennessee.

Although scientists agree that carbon dioxide levels and global temperature are both rising, there is no direct evidence that either one of the two phenomena is causing the other. Dr. Sherwood Idso, president of the Center for the Study of Carbon Dioxide and Global Change, told HUMAN EVENTS that, in previous eras, increases in temperature have preceded natural increases in the air’s carbon dioxide concentration.

The economic impact of new environmental legislation could range from bad to worse, said Myron Ebell of the Competitive Enterprise Institute, depending on whose plan is adopted. The President is expected to propose his own "Clear Skies" initiative-which will probably include voluntary curbs on carbon emissions-in his State of the Union address January 28.

The Bush Administration has talked out of both sides of its mouth on the issue of carbon emissions, said Ebell. While Bush has publicly stated his belief that global warming is a real phenomenon caused by human activity, he has strongly opposed the implementation of the Kyoto treaty and other environmental measures that he believes would cripple the nation’s economy.

Yet at the same time, Glenn Hubbard, chairman of the President’s Council of Economic Advisors, articulated a different policy during a Senate Commerce Committee hearing on July 11. During that hearing, Sen. John Kerry (D.-Mass.) questioned the effectiveness of a merely voluntary registry of carbon emissions such as that proposed by Bush. In reply, Hubbard hinted that the voluntary program would set the stage for a mandatory one. "We cannot leap to systems without having infrastructure in place," he said. "We need a voluntary emissions registry. We need to provide transferable credits for voluntary real emissions reductions. We have to build these institutions."

In the mean time, the McCain-Lieberman proposal has received added attention because of Lieberman’s announcement that he is running for President. Far from being a harmless distraction, said Ebell, the Senate bill would cripple economic development in the United States by increasing prices across the board and costing millions of American workers their jobs.

"What they’re proposing is really an ongoing recession," he said.

Ebell explained that the costs of the bill-essentially a tax on carbon dioxide emissions by the ton-would be passed on to consumers as a sort of regressive tax, in the same way corporate income taxes currently increase the retail prices of even basic needs like groceries. Prices of common, household goods could skyrocket if manufacturers are forced to buy credits or switch to inefficient and expensive sources of power like solar and wind.

"There is no way to get around the fact that this is going to be a drag on the economy," Ebell said.

The increased costs of production will also lead to a loss of manufacturing jobs as consumption drops off, said Ebell. In addition, absolute limits on carbon emissions could force some manufacturers to stop producing altogether when they hit the emissions ceiling. This could result in massive layoffs or even a California-style energy crisis.

To reach 2016 emissions goals, U.S. energy producers may have to cut production to near-1990 levels. The U.S. population already exceeds 1990 levels by 40 million, according to the U.S. Census Bureau.

While the goals contained in the McCain-Lieberman bill are attainable, Ebell added, the 2010 goals will be reached only if the country maintains nearly zero economic growth. To reach the 2016 goals, however, much higher unemployment and perhaps a prolonged recession or depression will be needed in the next decade. Alternatively, a major technological breakthrough could eliminate the need to burn organic fuels.

Lieberman-once a relatively moderate Democrat-is running for President, and seems to be reaching out to his party’s extreme left wing by using environmental issues. While some conservatives fear that this could give life to the emissions bill, it still has a formidable foe in the plain-spoken conservative Sen. James Inhofe (R.-Okla.), the new chairman of the Environment and Public Works Committee. A spokesman for Inhofe told HUMAN EVENTS that Lieberman’s bill would be dead on arrival in his committee. "We don’t agree with the approach of capping or regulating carbon emissions," he said. "That kind of bill is not going to come out of Inhofe’s committee while he’s chairman.

McCain has worked to change the bill so that it can bypass Inhofe’s committee and receive a friendlier audience elsewhere-such as the Commerce Committee-but the Senate parliamentarian has upheld Inhofe’s position that his committee has jurisdiction, making it unlikely that the bill will reach the Senate floor.


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