Obama Climate Plan Could Cost $2 Trillion
Daily News Article — Posted on March 19, 2009
(by Tom LoBianco, WashingtonTimes.com) – President Obama’s climate plan could cost industry close to $2 trillion, nearly three times the White House’s initial estimate of the so-called “cap-and-trade” legislation, according to Senate staffers who were briefed by the White House.
A top economic aide to Mr. Obama told a group of Senate staffers last month that the president’s climate-change plan would surely raise more than the $646 billion over eight years the White House had estimated publicly, according to multiple a number of staffers who attended the briefing Feb. 26.
“We all looked at each other like, ‘Wow, that’s a big number,'” said a top Republican staffer who attended the meeting along with between 50 and 60 other Democratic and Republican congressional aides.
The plan seeks to reduce [carbon emissions that President Obama and others believe causes global warming] by setting a limit on carbon emissions and allowing businesses and groups to buy allowances, although exact details have not been released.
At the meeting, Jason Furman, a top Obama staffer, estimated that the president’s cap-and-trade program could cost up to three times as much as the administration’s early estimate of $646 billion over eight years. A study of an earlier cap-and-trade bill co-sponsored by Mr. Obama when he was a senator estimated the cost could top $366 billion a year by 2015.
A White House official did not confirm the large estimate, saying only that Obama aides previously had noted that the $646 billion estimate was “conservative.”
“Any revenues in excess of the estimate would be rebated to vulnerable consumers, communities and businesses,” the official said.
The Obama administration has proposed using the majority of the money generated from a cap-and-trade plan to pay for its middle-class tax cuts, while using about $120 billion to invest in renewable-energy projects.
Mr. Obama and congressional Democratic leaders have made passing a climate-change bill a top priority. But Republican leaders and moderate to conservative Democrats have cautioned against levying increased fees on businesses while the economy is still faltering.
House Republican leaders blasted the costs in the new estimate.
“The last thing we need is a massive tax increase in a recession, but reportedly that’s what the White House is offering: up to $1.9 trillion in tax hikes on every single American who drives a car, turns on a light switch or buys a product made in the United States,” said Michael Steel, a spokesman for House Minority Leader John A. Boehner. “And since this energy tax won’t affect manufacturers in Mexico, India and China, it will do nothing but drive American jobs overseas.”
Copyright 2009 News World Communications, Inc. Reprinted with permission of the Washington Times. For educational purposes only. This reprint does not constitute or imply any endorsement or sponsorship of any product, service, company or organization. Visit the website at www.washingtontimes.com.
Questions
2. How does this number differ from the amount first quoted by the Obama administration?
3. How much will the cap and trade cost Americans per year by 2015, according to a study of an earlier cap and trade bill co-sponsored by Mr. Obama when he was a senator?
4. If President Obama's cap and trade program becomes law, why will American jobs be driven overseas, according to Rep. John Boehner's spokesman?
5. A mandatory cap and trade program will make a big impact on your future. Consider the following:
- A recent poll by Rasmussen shows that less Americans believe global warming is man-made today than they did last year. (Read the article here.)
- Global warming is the most important environmental issue of our time. If those who are sounding the alarm about a possible climate catastrophe are right, then governments must raise energy costs directly, with taxes, or indirectly, with mandates and subsidies, to reduce greenhouse gas emissions. Hundreds of billions of dollars a year in wealth or economic activity will be sucked up and redistributed by governments. Reducing greenhouse gas emissions even modestly is estimated to cost the average household in the U.S. approximately $3,372 per year and would destroy 2.4 million jobs. Electricity prices would double, and manufacturers would move their factories to places such as China and India that have cheaper energy and fewer environmental regulations.
(from heartland.org) - The cap and trade policy, based on a belief supported by less than half of all Americans, will cost American families a lot of money.
Read the "Background" and "Resources" below. Do you support a law that will require U.S. companies to implement a cap and trade program? Explain your answer. Ask a parent to read this article and the "Background" below and answer the same question.
OPTIONAL: Send an email to your Senators and Representative expressing your opinion - do you want them to support or oppose a "cap and trade" bill? Be clear, concise and polite.
- Find Senators' contact information at senate.gov on the top right corner of the homepage.
- Find Representatives' contact information at house.gov on the top center of the homepage.
Background
CAP AND TRADE
- Cap and trade (or emissions trading) is an approach used by governments to control greenhouse gas emissions (carbon dioxide produced by burning fossil fuels [oil and gas]) by providing economic incentives for achieving reductions in the emissions of greenhouse gases (water vapor accounts for the largest amount of greenhouse gas).
- Cap and trade is promoted by those who believe catastrophic global warming caused by man's use of fossile fuels is impending. The purpose of cap and trade is to slow/end the believed to be human caused global warming.
- The government sets a limit, or cap, on the amount of carbon dioxide that can be emitted. (The U.S. program has been voluntary - President Obam's plan will make it a law.)
- Under cap and trade, companies are issued emission permits and are required to hold an equivalent number of allowances (or credits) which represent the right to emit a specific amount.
- The total amount of allowances and credits cannot exceed the cap, limiting total emissions to that level.
- Companies that need to increase their emissions must buy credits (trade) from those who emit less greenhouse gases.
- Read more about cap and trade here.
Economist Arthur Laffer said in a study on the pros and cons of enforcing a mandatory CAP AND TRADE program in the U.S.:
- Because fossil fuels (oil, coal and natural gas) provide 86 percent of current U.S. energy needs and it is not currently feasible to substitute contribution of alternative energy sources in the near-term, a GHG cap could effectively become an energy production cap -- or an energy supply shock.
- Based on the energy efficiency responses to the energy supply shocks of the 1970s, the U.S. economy could be 5.2% smaller in 2020 compared to what would otherwise be expected if cap-and-trade regulations are imposed. This equates to a potential income loss of about $10,800 for a family of four for the initial Kyoto GHG reduction target.
The opposing viewpoints on GLOBAL WARMING are:
- The earth's climate is warming as a result of human actions; an extreme change in the earth's climate is going to occur, caused by greenhouse gas emitted by the world's use of fossil fuels (coal, oil, gas). This temperature change will result in catastrophic problems in the environment. Humans must drastically reduce the consumption of fossil fuels immediately. To prevent this man-made climate change, countries need to restrict energy use (reduce use of gas and oil).
Liberals generally hold this view. Check out two liberal organizations which defend this viewpoint:
Natural Resources Defense Council and Greenpeace. - Human activity does not affect the earth's temperature. Burning fossil fuels (gas, coal and oil) does not cause climate change. The earth's climate changes naturally, but not so much that it will cause a change of catastrophic proportions. An extreme change in the earth's climate will not happen. There are natural warming and cooling trends over time. In the 1970's a coming ice age was predicted, but now that scare has been replaced with the current global warming scare.
Conservatives generally hold this view. Two conservative organizations which support this view are:
IceCap.us and ScienceandPublicPolicy.org.