|
The Costs of the Cap-and-Trade Bill
On June 25, the House passed the Waxman-Markey climate stabilization act, which would institute a cap-and-trade system to restrict Americans carbon emissions. While proponents of the bill have sought to argue that the costs of such a system would be negligible, nothing could be further from the truth. In fact, the bill proposes a massive and highly regressive tax on the U.S. economy, and could potentially cause not only extensive business failures, unemployment and privation within our borders, but starvation among poorer populations elsewhere. To understand this, it is only necessary to look at the numbers. According to a report issued by the Environmental Protection Agency in April, by 2015 the price of carbon emission indulgences required by the bill for industries to operate could be expected to run between $13 and $17 per ton of CO2 emitted. It may be noted that this estimate was made by an Obama administration agency highly favorable to the bill and that it did not take into account the very real possibility that speculators might act aggressively to buy up all the available indulgences and then, acting like ticket scalpers, force industrial users to purchase them at greatly inflated prices. So these EPA figures for carbon emission costs should be viewed as minimal. That said, lets stipulate the $15/ton midrange of the EPA estimate, and see what it implies. The United States emits about 9 billion tons of CO2 per year. Therefore, at a rate of $15/ton fee for emission indulgences, the bill would impose a tax of $135 billion per year on the nation. Divided by the U.S. population of 300 million, that works out to a cost of $450 per year levied on every American man, woman or child, or $1,800 for a family of four. While for wealthy individuals like Al Gore such an impost might represent a mere pittance, for working families struggling hard to make ends meet it would be a very significant burden. But that is not even the worst part of it. As a result of the markup of carbon costs, a lot of those working families will be out of work and unable to pay their existing bills, let alone new ones. Consider: Burning one ton of coal produces about three tons of CO2. So a tax of $15 per ton of CO2 emitted is equivalent to a tax of $45/ton on coal. The price of Eastern anthracite coal runs in the neighborhood of $45/ton, so under the proposed system, such coal would be taxed at a rate of about 100 percent. The price of Western bituminous coal is currently about $12/ton. This coal would therefore be taxed at a rate of almost 400 percent. Coal provides half of Americas electricity, so such extraordinary imposts could easily double the electric bills paid by consumers and businesses across half the nation. In addition, many businesses, such as the metals and chemical industries, use a great deal of coal directly. By doubling or potentially even quadrupling the cost of their most basic feedstock, the cap-and-trade systems indulgence fees could make many such businesses uncompetitive and ultimately throw millions of working men and women onto the unemployment line Posted by: g(r)omgoru 2009-07-02 |
| http://www.rantburg.com/poparticle.php?ID=273408 |