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Posted Marc Morano – 4:02 PM ET – Marc_Morano@EPW.Senate.Gov  

House Democrats Push Climate Tax While Negotiating Fiscal Bailout 

They just don’t get it  


During a week where Americans were focused on perhaps the greatest economic challenges this country has faced in over a generation, House Democrats released a set of principles on October 2nd that outline an aggressive plan to cap greenhouse gas emissions. ( See: “House Dems claim 152 supporters for aggressive cap-and-trade plan” – October 3, 2008 – LINK - Subscription Required )   The plan could be even more economically restrictive than the failed Lieberman-Warner Climate Security Act, which would have cost $6.7 trillion dollars, according to the bill’s own sponsors. That $6.7 trillion cost would have been passed on to families and workers across the country in the form of higher gas prices, higher electricity and heating/cooling bills, more expensive consumer goods, and higher workplace costs. 

As we learned during this past summer’s debate on the failed Lieberman-Warner global warming cap-and-trade bill and with the recent victory on offshore drilling, the appetite of the American people to unlock America’s affordable energy resources is very strong.  When it comes to being in touch with Americans, the House Democrats need a reality check.  The current financial crisis only reinforces the public’s wariness about any climate bill that attempts to increase the costs of energy and jeopardizes jobs.  

‘Reality Check’ - Related Links:  

‘Tax and Charade’ – "It is high time we started calling cap and trade what it really is — tax and charade." – September 18, 2008 - Dr. Roger Pielke Jr.  Excerpt: Yesterday’s New York Times had an article on the upcoming carbon dioxide auction of the Regional Greenhouse Gas Initiative (RGGI) of 10 northeastern U.S. states participating in this new cap and trade program (h/t Adam Zemel at the BT blog). The evolving performance of RGGI should add weight to the argument that cap and trade is simply not up to the challenge of reducing greenhouse gas emissions. […] Champions of cap and trade will find themselves in the awkward position of cheering for rapid emissions growth for RGGI to show any teeth. Otherwise, it is just business as usual. […]  And this is indeed the problem with cap and trade. Any policy, no matter how theoretically sound, that cannot meet the test of political and economic realities is indeed fatally flawed. RGGI may do many things, but reducing emissions does not seem to be among them. It is high time we started calling cap and trade what it really is — tax and charade. 

'Global warming is sub-prime science, sub-prime economics, and sub-prime politics' - Global Warming’s boom days are surely coming to an end’ By UK Professor Emeritus of Biogeography Philip Stott of the University of LondonExcerpt: With a world likely to cool during the next decade, with a world economy set in austere mode, and with the new politics of China, India, Brazil, and the rest, Big Global Warming’s boom days are surely coming to an end. “‘Global warming’ is sub-prime science, sub-prime economics, and sub-prime politics, and it could well go down with the sub-prime mortgage.”  

Financial storm dims hope of tough U.N. climate pact – Reuters - October 1, 2008 Excerpt: Global financial mayhem is dimming prospects for a strong new U.N. pact to fight climate change, but it might aid cheap green schemes such as insulating buildings to save energy, analysts said. […]  A year ago, many governments were billing the fight against warming as humanity's top long-term challenge after the U.N. Climate Panel said human use of fossil fuels would bring more floods, heatwaves, droughts and rising seas. Now, with the United States caught in a financial storm that may cost $700 billion of taxpayers' money to fix, a plan to agree a new U.N. treaty to fight global warming in Copenhagen in December 2009 is looking ever more ambitious. German Foreign Minister Frank-Walter Steinmeier said on Tuesday the market difficulties would make it harder to agree a climate deal, while U.S. Democratic presidential candidate Barack Obama said last week he may be forced to scale back his planned investments in energy.  "It's starting to weigh on peoples' minds that the whole process could go completely wrong," said Mabey. In the worst case, the negotiations could collapse, like U.N. trade talks. 

U.S. Faces Serious Risks of Brownouts or Blackouts in 2009, Study Warns – October 1, 2008 Excerpt: A new study released this week highlights what experts have been saying for years:  the U.S. faces significant risk of power brownouts and blackouts as early as next summer that may cost tens of billions of dollars and threaten lives. The study, "Lights Out In 2009?" warns that the U.S. "faces potentially crippling electricity brownouts and blackouts beginning in the summer of 2009, which may cost tens of billions of dollars and threaten lives." "If particularly vulnerable regions, like the Western U.S., experience unusually hot temperatures for prolonged periods of time in 2009, the potential for local brownouts or blackouts is high, with significant risk that local disruptions could cascade into regional outages that could cost the economy tens of billions of dollars," the report warned. U.S. baseload generation capacity reserve margins "have declined precipitously to 17 percent in 2007, from 30-40 percent in the early 1990s," according to the study.  A 12-15 percent capacity reserve margin is the minimum required to ensure reliability and stability of the nation’s electricity system.  Compounding this capacity deficiency, the projected U.S. demand in the next ten years is forecast to grow by 18 percent, far exceeding the projected eight percent growth in baseload generation capacity between now and 2016. The study, which can be downloaded here, estimated that the U.S. will require about 120 gigawatts (GW) of new generation  just to maintain a 15 percent reserve  margin.  That will require at least $300 billion in generation and transmission facility investments by 2016.  "The facts presented in this study should stimulate a call for action by policymakers everywhere.  Our nation's electricity system is clearly in trouble and we need to take rapid steps as soon as possible to remedy the situation," said Bob Hanfling, Chairman of the non-profit NextGen Energy Council, which conducted the study.  

A CHANGED CLIMATE: EUROPE GOES COLD ON CLIMATE HYPE - -The Economist - October 2, 2008 Excerpt: Just 18 months ago the European Union promised to save the world from climate change. The heroic mood is gone now. In March 2007 Angela Merkel, the German chancellor and chairman of the summit, was a green champion. Today she sounds like a lobbyist for German business, listing the industries that must be shielded from the full costs of her package. In truth, almost every country has found reasons why the climate-change promises may be impossible to meet in their current form. 

UK ELECTRICITY PRICES SURGE AMID FEARS OF SUPPLY SHORTFALL – UK Times – October 2, 2008 Excerpt: Wholesale electricity prices surged higher yesterday amid mounting fears that the UK could face a supply shortfall next month. National Grid denied that there was a risk of domestic consumers facing blackouts next month, asserting that there was a built-in cushion of capacity below the stated safety margin. However, Mr.  Horstead said that the unexpected loss of a plant because of a technical glitch could expose industrial customers to the threat of temporary power cuts.  

Green bubble bursts: Dems ‘losing the high ground on the environment to GOP’ – LA Times – September 30, 2008 Excerpt: Amid the energy crisis, Democrats are losing the high ground on the environment to a GOP that is pushing oil drilling. [...] Environmental groups, perpetually certain that a new ecological age is about to dawn in America, have serially overestimated their strength and misread public opinion. […] Democrats and greens ended up in this predicament because they believed their own press clippings -- or, perhaps more accurately, Al Gore's. After the release of the documentary film and book "An Inconvenient Truth," greens convinced themselves that U.S. public opinion on climate change had shifted dramatically, despite having no empirical evidence that was the case. In fact, public concern about global warming was about the same before the movie -- 65% told a Gallup poll in 2007 that global warming was a somewhat or very important concern in comparison to 63% in 1989. Global warming remains a low-priority issue, hovering near the bottom of the Pew Center for People and the Press' top 20 priorities. By contrast, public concern about gasoline and energy prices has shifted dramatically. […]  The train wreck happened in the Senate and went by the name of the Climate Security Act. That bill to cap U.S. greenhouse gas emissions would have, by all accounts (even the authors'), increased gasoline and energy prices. 

Why Kyoto Used 1990 as a Base Year – October 2, 2008 Excerpt: But 1990 allowed signatory countries to claim credit for alot of improvements in CO2 output that had nothing to do with the treaty.  For example, in Germany, 1990 was after unification but before wildly inefficient east German factories had been shut down.  In England, 1990 was just before a concerted effort to substitute North Sea oil and nuclear to shut down Midlands coal use.  In France and Japan, 1990 was the beginning of a period of slow economic growth (and, as an added special bonus, punished the US because it was the beginning of strong economic growth here). Here is further proof: In an odd twist on market economics, Europe's ex-communist states are starting to exploit a new market. Thanks to the Kyoto climate-change agreement, they can, in effect, now make money off the pollution their onetime central planners were willing to tolerate as the price for rapid industrialization and universal employment. Ukraine, Hungary, the Czech Republic and other countries of the region not exactly renowned for clean air have made or are close to signing deals to sell the rights to emit greenhouse gases, and their main customer is environmentally friendly Japan. This carbon windfall dropped into Central and East Europe's lap because the Kyoto Protocol sets 1990 as the reference year for future reductions in greenhouse gas emissions. The socialist states at that time were producing gargantuan amounts of CO2 and other gases implicated in global warming from unfiltered coal-fired power plants and factories; when those unprofitable industries withered, countless thousands of workers went on the dole — but the air got cleaner. In the coming years, in line with European Union mandates, would-be members gradually adopted better environmental policies. It's the difference between the often unspeakably bad air of 1990 and the comparatively clean air of today that allows them to sell "carbon credits" potentially worth billions of euros. In effect, signatory countries are still making their Kyoto goals with actions that had nothing to do with Kyoto, in this case the modernization and/or shut down of communist-era industry.  This continues the charade that a) Europe is actually making real progress on CO2 emissions, which it is not and b) emissions reductions are cheap.

Global warming: why cut one 3,000th of a degree? - Britain's efforts to reduce the speed of global warming will cost huge sums of money and have a pitifully tiny effect  - Bjorn Lomborg - September 30, 2008 Excerpt: Global warming is seen everywhere as one of the most important issues. From the EU to the G8, leaders trip over one another to affirm their commitment to cutting CO2 to heal the world. What they do not often acknowledge - in part because it would lose them support - is that the solutions proffered are incredibly costly and will end up doing amazingly little good, even in a century's time. This is the truly inconvenient truth of the politics of global warming. […]  However, we need to keep our cool: global warming's total cost will be only about one half of 1 per cent of the net worth of the 21st century; that is the current worth of all the wealth projected to be generated in this century. Panicking is unlikely to lead to sensible policies. It could lead to exorbitantly expensive policies, which will do great harm. Many of the proffered global warming policies are designed to help politicians bathe in the warm glow of good intentions, with little or no regard to the mounting costs and infinitesimal benefits. It is a well-rehearsed point that the Kyoto Protocol was a terribly inefficient, hugely costly way to do virtually no good. Even if every industrialised country, including the United States, had accepted the protocol, and everyone had lived up to its requirements for the entire century, it would have had virtually no impact, even a hundred years from now. It would reduce the global temperature increase by an immeasurable 0.15C by the year 2100. The cost of implementing Kyoto, taking the average figure from the various top macroeconomic models, would have been almost £100 billion annually for the rest of the century.  

Carbon surveillance: Cellphones to track 'whether you are walking, driving or flying' – UK Guardian - September 29, 2008 Excerpt: Keeping track of your carbon footprint could become as simple as slipping a mobile phone in your pocket: a London-based start-up company has developed software for mobile phones that uses global positioning satellites to work out automatically whether you are walking, driving or flying and then calculate your impact on the environment. Carbon Diem's inventors claim that, by using GPS to measure the speed and pattern of movement, their algorithm can identify the mode of transport being used. It can therefore calculate the amount of carbon dioxide that a journey has emitted into the atmosphere – without any need for input from the traveller. 

MASSACHUSETTS DEMOCRATIC GOVERNOR: PEOPLE COULD FREEZE TO DEATH THIS WINTER – September 26, 2008 Excerpt: Governor Patrick says there's a real possibility that people in America could freeze to death this winter due to the soaring cost of home heating fuel.  Patrick met today with members of the Massachusetts congressional delegation on Capitol Hill and later testified before a House panel on the need for heating aid in cold-weather states. Patrick said the cost of heating a home -- whether by electricity, gas or oil -- is expected to cost between 20 and 31 percent more than a year ago. He said that will have an impact on many families, and not just those who are defined as low-income. The House has approved legislation to double the government's Low Income Home Energy Assistance Program to 5.1 billion dollars for the coming winter. Massachusetts would receive 163 million dollars under the plan, an increase of 36 million dollars from the last fiscal year. 

UK Emissions: Facts And Politics - September 25, 2008 Excerpt: We can draw three extremely telling conclusions from this data:(a)The Kyoto Protocol has been a singular failure if its aim was to curb the rise in world fossil fuel carbon dioxide emissions;(b)The UK, despite much rhetoric, has made virtually no dent in its own total emissions figure since 1980, simply altering the mix of the fossil fuels employed; and,(c) At 149 million metric tons of carbon in 2005, the UK now accounts for a mere 1.87% of world emissions. UK politicians thus need to take on board the following simple truths:(a)At a mere 1.87% of world emissions, a share that is falling rapidly with the economic growth of China, India, Brazil, and the other developing countries, whatever we do in the UK will have no measurable or predictable effect on climate change whatsoever, even if you accept ‘global warming’ theory;(b)In any case, without new nuclear power stations providing a generating capacity of at least 30%, there will be no effective cut in emissions.These are the facts. And the politics? The British public has to be told these facts before we waste billions on nonsensical ‘Green’ utopias. In particular, the Conservative Party must get real over energy policy. 

Denmark, Norway Grapple with Growing CO2 - September 25, 2008 Excerpt: Even as Scandinavian leaders have assumed a prominent role in international efforts to cut greenhouse gas emissions and combat climate change, both Norway and Denmark have failed to reduce their own emissions. (IPS) 

WSJ – Climate Change Collapse – June 06, 2008
Excerpt: Environmentalists are stunned that their global warming agenda is in collapse. Senator Harry Reid has all but conceded he lacks the vote for passage in the Senate and that it's time to move on. Backers of the Warner-Lieberman cap-and-trade bill always knew they would face a veto from President Bush, but they wanted to flex their political muscle and build momentum for 2009. That strategy backfired. The green groups now look as politically intimidating as the skinny kid on the beach who gets sand kicked in his face. Those groups spent millions advertising and lobbying to push the cap-and-trade bill through the Senate. But it would appear the political consensus on global warming was as exaggerated as the alleged scientific consensus. "With gasoline selling at $4 a gallon, the Democrats picked the worst possible time to bring up cap and trade," says Dan Clifton, a political analyst for Strategas Research Partners. "This issue is starting to feel like the Hillary health care plan."   

Excerpt: India will not reduce greenhouse gas emission at the cost of development and poverty alleviation, Minister of State for Environment and Forests Namo Narain Meena said Thursday.'India is struggling to bring millions of people out of poverty. We cannot accept binding commitments to cut down greenhouse gas emission,' Meena said at a function to mark the World Environment Day. Though India has no commitment to reduce the global warming gases under the Kyoto Protocol, in recent climate change conferences many developed countries have said India needs to reduce the greenhouse burden.  

Excerpt: AUSTRALIAN industries may be crippled if they are forced to meet ambitious targets for tackling climate change, the Rudd Government has been warned.
The Queensland Government, Australian Workers Union and big business across the nation fear forcing businesses to pay for the pollution they create would cause economic upheaval.The State Government fired a warning to Canberra in Tuesday's budget, urging it not to set over-ambitious targets for cutting carbon emissions for fear of destabilising the economy.  

National Post – As Goes the Economy, So Goes Environmentalism – June 05, 2008
Excerpt: If truth is the first casualty of war, then environmental concern is the first casualty of economic recession. Surveys of Canadian voters showed the environment to be their first or second concern in 1989-90. At that time, though, the economy was booming, pumping out tens of thousands of new jobs a month. A year-and-a-half later, with the economy locked in the worst recession in 60 years, government finances were imploding, jobs disappearing and foreclosure wolves circling, the environment vanished from the top 10. There will always be a small, hard-core voter base motivated by eco-issues. They're not worried about losing their jobs in an environmentalist-driven recession. They know that if they get laid off from the alternative music store, they can always go clerk at the Gaia Vegan Market or Wiccans 'R' Us. But for most people, the environment is a luxury good -- easily expendable when their livelihoods and homes are threatened.  

Excerpt: Car tax hikes for millions of drivers became the latest ticking timebomb under Gordon Brown's leadership last night. Despite mounting Labour unrest, the Prime Minister launched a stubborn defence of the plans and said they were an effective means of cutting carbon emissions. Tory leader David Cameron warned Mr Brown he was likely to lose his job if he refused to scrap what he called 'deeply unpopular and unenvironmental' changes to vehicle excise duty. Pointing to the growing rebellion among Labour MPs over the plans, Mr Cameron bluntly told Mr Brown during angry exchanges at Prime Ministers' Questions: 'If you don't get rid of it, they will probably get rid of you.'

  Peanuts! Tough Climate Goals Only Cost $45 Trillion by 2050 – June 05, 2008
Excerpt: A goal to halve planet-warming carbon emissions by 2050, similar to an aim Japan is urging G8 leaders to agree next month, would add $45 trillion to global energy bills, the International Energy Agency said on Tuesday. "It's a lot of money," IEA analyst Peter Taylor told a meeting on the fringes of a climate conference in Germany, previewing the agency's Energy Technology Perspectives report to be published in Japan on Friday. "It implies a completely different energy system," he said. For example, electricity from renewable sources such as hydropower and the wind would reach close to half all power production, compared to 18 percent now, Taylor told Reuters. 

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Marc Morano

Communications Director

Senate Environment and Public Works Committee (EPW) Inhofe Staff


202-224-5167 (fax)


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