Take a Stand and Support Keeping Energy Costs Low 

What’s happening in Washington…. 

Congress is considering legislation intended to address global warming which seeks to reduce U.S. emissions of greenhouse gases like CO2.  The legislation in the U.S. House, commonly known as Waxman-Markey (H.R. 2454), requires electric utilities, manufacturing plans, refineries and other companies and facilities to buy permits to operate from the federal government.  The government, over time, would reduce the number of permits sold, and thereby reduce emissions (cap-and-trade).  The legislation seeks to reduce U.S. greenhouse gas emissions 83% below 2005 levels by 2050.

In early October, Senators Barbara Boxer (D-CA) and John Kerry (D-MA) introduced a first draft of the Senate version of the global warming bill, dubbed the 'Clean Energy Jobs and America Power Act.'  Although the draft failed to include many important details, the bill called for an even more stringent short-term reduction in carbon dioxide emissions than did the Waxman-Markey bill that narrowly passed the House in June.

Although these bills establish a worthy goal, they impose the wrong approach.

Why do Waxman-Markey and Boxer-Kerry impose the wrong approach?

Any policy to address global climate change should contain costs, help U.S. consumers and businesses, promote competitiveness, protect jobs, and reduce our dependence on imported energy.  Unfortunately, the Waxman-Markey and Boxer-Kerry bills would increase energy prices, decrease U.S. economic output, and destroy scores of domestic jobs just as we are try to crawl out of a recession. 

Concerns with Waxman-Markey and Boxer-Kerry and how they will affect you and your family:

Pay More for Energy
Remember last summer?  If this legislation passes, the price of gas you pay at the pump, as well as your electric bill, your airline ticket price…all of it could increase significantly.  Recent studies project gasoline prices up more than 30% by 2020, and residential electricity prices up by a whopping 50% if Waxman-Markey is enacted.  (Source:  Energy Information Administration, page 35 & National Manufacturers Association/ American Council for Capital Formation)

Increased Unemployment
With the U.S. unemployment level at nearly 10% this year, we cannot afford to do anything to make an already bad situation, even worse.  The federal Government Accountability Office has even warned that a cap and trade bill would provide manufacturers and companies in China and other countries a competitive advantage over U.S. companies and put U.S. jobs at risk.  This means that the U.S., by law, would have to follow environmental controls and regulations that other countries and competitors would not.  Job and productivity loss is the result.

Even with the expected expansion of new “green jobs,” the U.S. will see job up to 2.5 million in U.S. job losses each year through 2030.  (Source:  National Black Chamber of Commerce/CRA International)

Raises prices for consumer goods and services
We rely on oil and gas in our everyday lives, even more than you may realize.  Not only do we need gas to power our cars, but petroleum products are used in fertilizers, medicine, plastics and even in our phones and clothing.  .  According to the non-partisan Energy Information Administration, “ultimately, consumers will also see the impact of higher energy prices directly through final prices paid for energy-related goods and services and higher prices for other goods and services using energy as an input, and, if the cost increases cannot be passed on to consumers, labor and capital stock may be reallocated.”  Source:  Energy Information Administration, page 39)

If the price for oil and gas increases, so do the prices for items we use every day.  An economy fueled by low energy prices creates more jobs, grows and thrives, and is critical for a strong America and a better quality of life.  Unfortunately, this legislation will have the opposite effect. 

Less Disposable Income in the Family Budget
If you pay more for gas at the pump, and for energy to heat or cool your home, you have less flexibility in the family budget for other things – for groceries, bills, or a vacation.   Energy comes at a higher cost to your family…a cost we can’t afford. 

Disproportionately hurts certain geographic regions and  fixed and  low income families
Fixed and lower income Americans will bear a disproportionately heavier burden under this legislation.  Higher energy, food, and other commodity prices mean less money available for other needs.  Some regions, especially the South and Midwest will be harmed more than others under the Waxman-Markey bill.  The South and Midwestern states tend to be more rural and with a higher percentage of jobs in the manufacturing and agricultural sectors, which require more energy than other industries.  Since the Waxman-Markey bill increases energy and related input costs, these regions will face significantly higher costs, greater unemployment, and be made less competitive.  (Source:  National Manufacturers Association/ American Council for Capital Formation, page 4; Farm Bureau)

Pursues an “us only” strategy to a global issue, hurting  our economy for no gain
Global climate change requires a global solution.  With Waxman-Markey, we pursue an “us only” strategy, significantly increasing our energy costs and penalizing ourselves while giving an advantage to other countries.

China is now the biggest emitter of greenhouse gas in the world and is expected to double their emissions sometime within the next 10 years. The International Energy Agency estimates that China’s energy-related CO2 emissions will be twice that of the United States by 2030.  The scale of China’s projected emissions growth must be taken into account to address global warming.  For example, “in 2006, China added 90 giga watts of coal fired power capacity – enough to emit over 500 million tons of CO2 per year for 40 years; by comparison, the European Union’s entire Kyoto reduction commitment is 300 million tons of CO2.”  For the full source, click here.

According to the American Farm Bureau Federation, “Unilateral cap-and-trade legislation will have little or no impact on the climate because greenhouse gas emissions require a global response.”

The entire developing world with their exploding populations and growing middle classes wants to enjoy a U.S. standard of living, and that requires more (not less) energy.  Policymakers may be hopeful that China and India will reduce their emissions but they have absolutely refused to do so.

Make U.S. less energy independent.
Under this cap and trade legislation, oil suppliers will have to purchase allowances to refine oil, which increases their costs and could lessen our domestic supply, giving an advantage to foreign refiners.  More regulations could negatively impact domestic oil exploration and the U.S. can become less energy secure and more dependent on imports of gasoline and other oil products to meet out energy needs.  In fact, the U.S. Energy Information Administration forecasts our energy demand will grow by 9 percent between 2007 and 2030, with more than half of the energy demand expected to be met by oil and natural gas, as is the situation today.  Oil and gas will remain the top energy source in the years to come, and we need to further increase our domestic supply and production capabilities.  (Source:  Energy Information Administration; “Energizing America, Facts of Addressing Energy Policy,” API, July 10, 2009, page 24)