Cap & Trade is Dead

I have been certain for a while that Cap & Trade legislation wouldn't pass in any significant form. I just couldn't see Congress passing a bill that would only work by hobbling the American economy at a moment when it already limping and raising the price of damn near everything just as everyone was already tightening their belts. Well, now we have this astonishing report from CBS:

The Obama administration has privately concluded that a cap and trade law would cost American taxpayers up to $200 billion a year, the equivalent of hiking personal income taxes by about 15 percent.

A previously unreleased analysis prepared by the U.S. Department of Treasury says the total in new taxes would be between $100 billion to $200 billion a year. At the upper end of the administration's estimate, the cost per American household would be an extra $1,761 a year.

A second memorandum, which was prepared for Obama's transition team after the November election, says this about climate change policies: "Economic costs will likely be on the order of 1 percent of GDP, making them equal in scale to all existing environmental regulation."

The documents (PDF) were obtained under the Freedom of Information Act by the free-market Competitive Enterprise Institute and released on Tuesday.

Cap and Trade is, after healthcare reform and the stimulus bill, the Obama Administration's third signature piece of legislation. In theory it will save the planet by reducing future CO² emissions in the United States. This strikes me as a loony policy. The problem is that, even if it works here, it would just mean that production would shift to countries like China and India that aren't about to make real sacrifices for abstract goals like curbing global warming.

But apart from the sense of the policy if it works, look at the numbers that have to be swallowed before it can be passed into law: $200 billion a year in new taxes; a hike in the personal income tax of 15%; $1,761 a year per American household. What would be the political consequences of this when Americans see the bill?

It is clear from the above that the Administration knew about this from the early days and yet forged ahead anyway. Okay, saving the planet is important. But at some point don't you have to worry about selling the plan to the voters? We know about this now because of a freedom of information act request by the Competitive Enterprise Institute. That means that they weren't tell us what they knew at the start. Didn't it occur to anyone in the Administration that, sooner or later, we would find out?

And didn't someone consider how Cap & Trade would work together with healthcare reform? Imagine the fellow who discovers he has been fined $3,800 bucks for not buying health insurance for his family. Now he opens the next letter from Washington and discovers he has to shell out another $1700 so the polar bears will have plenty of ice to drink coke on. Did anyone in the Administration consider that?

We have a government that seems to be altogether untethered from reality.

Comments

[Miranda]

In that case, the Ministry of Fairies might come in handy.

[Warren Berry]

Bail-out, Stimulus, Cap&Trade, Health Care, etc. How are we supposed to pay for it? Higher taxes, more borrowing from China and other foreign nations, printing more money which causes inflation. This is ridiculous.

[Mike]

Mark Twain once said that the news of his demise had been highly exaggerated; I think it was after he read his obituary in the newspaper.

I, too, hope it is dead. But I know this: If we don't continue to fight like hell against it we will lose. The Senate will bring it up next week, maybe...perhaps the rush is to run faster than the news.

ONE MAJOR POINT IS MISSED HERE: It is, as Sen. Inhofe says, All economic pain, and no climate gain.

The theory that CO2 drives climate change has been shot so full of holes that is is not only irresponsible to push cap and trade but reprehensible.

For a summary what hss happened to the 'science' see this article by Richard Lindzen, professor of meteorology at MIT:

http://www.heartland.org/events/newyork09/pdfs/lindzen.pdf

[KB]

Thanks to Warren and Mike for the comments. Asking how we can pay for cap and trade is a good question. Here is a good answer: we can't. Mike: I agree that there are problems with global warming theory. I don't think it is quite so "shot full of holes" as you say. But I don't think it is useful enough to justify hobbling our economies for.