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Today’s Senate vote on the latest global warming scheme could cripple the US economy.

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Stop ‘Cap and Trade’

Today’s Senate vote on the latest global warming scheme could cripple the US economy.

In nearly every imaginable venue — at dinner tables, PTA meetings, Sunday soccer games, conference and lunch rooms, our families, friends and co workers are talking more seriously about our energy future, how to manage rising fuel costs and what we can do to protect the environment.  The recent fluctuation of oil and natural gas prices has us all rightly concerned about what Congress can do to ensure our energy security while developing alternative forms of reliable, renewable energy supplies. What many people don’t know is that this Congress is rushing through a bill that would drastically raise the price of heating our homes and businesses and filling up our gas tanks while doing little to protect the environment. 

The Senate is now trying to address global warming by pushing a flawed bill which is based on a “cap and trade” system to reduce greenhouse gas emissions. But the bill would cost our economy trillions by imposing economic hardships on American businesses and working families.  The AFL-CIO — who we rarely see eye to eye with — calls this bill, “overly aggressive.”  

Introduced by Senators Joe Lieberman and John Warner, the global warming bill transfers the astronomical costs of reducing greenhouse gas emissions directly to US taxpayers while developing nations like China and India watch their greenhouse gas emissions increase nearly 100% over the next two decades. As it stands, this bill would penalize US businesses that are trying to compete with China and India in a global marketplace.  American jobs and competitiveness will suffer if this bill is passed.  

Even more astounding is the fact that the bill imposes unattainable reductions of US carbon emissions — to the point that the technology needed to achieve the goals does not yet exist. These regulations could force much of our energy intensive industries to either shut down or move their operations overseas.  Analysis of the bill by the well respected consulting firm Charles River Associates, says the Lieberman-Warner bill will cost the economy $160 to $250 billion per year by 2015, and the cost will rise every year eventually impacting the economy $1 trillion per year.  The American Council on Capital Formation found that the bill will lead to “higher energy prices, lost jobs and reduced GDP.” 

The director of the Congressional Budget Office (CBO) concluded that the cap and trade approach to global warming would raise costs for businesses and subsequently, consumers, especially low-income Americans.  “The rise in prices for energy and energy-intensive goods and services would impose a larger burden, relative to income, on low-income households than on high-income households,” CBO director Peter Orszag testified before Congress.

Any reasonable approach to climate legislation must meet five core principles: it must 1) address the global nature of climate change; 2) promote accelerated energy technology; 3) preserve American jobs and the economy; 4) reduce barriers to development of climate-friendly energy sources and 5) promote energy efficiency measures.  The Lieberman-Warner achieves none of the above. 

Addressing global emissions is a complex issue that requires global participation. The United States–and dozens of other industrialized nations — must focus on promoting long term financing, development and deployment of cost-effective innovative energy technologies that address our energy needs and climate change. We must resist hastily conceived policies that will almost immediately raise energy prices, harm low income Americans and place US jobs and the domestic economy at risk.

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Written By

Mr. Kovacs is vice president, Environment, Technology and Regulatory Affairs at the U.S. Chamber of Commerce.

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