Democrat cap and trade magic

Vincent Carroll:

Don't worry, this shouldn't hurt. In fact, you won't feel a thing. So goes the refrain of those pushing for passage of a climate bill regulating greenhouse gas emissions. Just what do they think we're smoking?

A crackdown on greenhouse gases should involve "no cost to the consumer," declared House Speaker Nancy Pelosi the other day — this from a leading supporter of the legislation. As if one fanciful pledge weren't enough, the California Democrat also insisted that it would be wrong to pass a bill "that was a penalty to some states."

Meanwhile, Energy Secretary Steven Chu told a congressional hearing that "in today's economic climate, it would be completely unwise to want to increase the price of gasoline." Trouble is, Chu is a climate-bill enthusiast, too — and the purpose of the cap-and-trade legislation that he and his boss, President Obama, favor is to raise the price of fossil fuels. Refiners will be one of the hardest-hit segments of manufacturing.

Two years ago, the Congressional Budget Office forecast that if climate legislation were enacted, low-income households would experience a 3.3 percent drop in income from higher prices associated with a 15 percent cut in carbon dioxide emissions, with middle-income households losing 2.8 percent. (The Waxman-Markey climate bill calls for cutting greenhouse-gas emissions by 20 percent by 2020.)

More recently, the CBO estimated that "the price increases resulting from a 15 percent cut in CO2 emissions could cost the average household roughly $1,600 (in 2006 dollars)," with the greatest impact "relative to income, on lower-income households."

To be sure, the Environmental Protection Agency recently weighed in with an estimate of $98 to $140 per household annually after factoring in consumer rebates that the agency assumes will occur. But the EPA's analysis is curious in several respects. As University of Colorado Professor Roger Pielke Jr. pointed out on his Prometheus science policy blog, the agency assumed the economy would grow by 2.5 percent from 2010 to 2019 — well below the administration's estimate of 3.3 percent growth in its budget projections. The result: $1.22 trillion disappears from the economy, or about $11,000 per household. "A lower GDP means fewer emissions," Pielke explained. "It also means that needed efficiency gains are smaller to meet the same targets."

The Democrats at best have no clue what the cost of their energy policies will be. At worst, and the most likely case, they know and they are trying to hide those cost, because they know that voters will reject their scheme.

The whole purpose of manipulating the market for energy is to drive up prices in hopes that people will use less. To deny that fact is to lie to American voters. The so called rebates will not be redistributed across the board, but will favor Democrat constituent groups and hurt particularly rural citizens who have a longer commute.

If anyone thinks there will be mass transit in Washington, Texas they are very mistaken and it would be foolish to even attempt it.


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