Utah Senator Orrin Hatch recently wrote about the “Cap and Trade” bill narrowly passed by the House of Representatives. Also known as the Waxman-Markey bill, the cap and trade bill is an emissions trading bill designed to control pollution by providing economic restrictions to the emissions of pollutants. Under the bill, the government will issue emission permits to companies which will be required to hold an equivalent number of credits which represent the right to emit a specific amount of pollutants. The total amount of allowances and credits cannot exceed the cap, limiting total emissions to that level.
Companies that need to increase their emission allowance must buy credits from those who pollute less. The transfer of allowances is referred to as a trade. In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions by more than was needed. Thus, in theory, those who can easily reduce emissions most cheaply will do so, achieving the pollution reduction at the lowest possible cost to society.1
In a personal letter to a constituent, Orrin Hatch wrote about the negative affects of this legislation and why he will not support it:
- Such proposals are not the most effective approach to reducing carbon emissions (CO2).
- There is considerable debate within the scientific community regarding the theory of anthropogenic global warming (AGW). This theory is based on questionable assumptions.
- If all provisions of the cap and trade program were implemented global temperatures would only decrease by nine-hundredths of a degree Fahrenheit.
- A carbon cap-and-trade program could result in a 70 percent increase in the average Utah family’s electric bill, making it the highest increase in the nation.
- As we seek to become more energy independent, this legislation will in fact result in an annual $120 billion reduction in our economy, while ensuring our competitors such as China, gain a distinct advantage over us in the worldwide marketplace. It will send more than a million of our manufacturing jobs to countries with less-stringent environmental standards resulting in a net increase of global CO2 emissions.
- False markets simply redistribute wealth to preselected winners and losers, the winners here would be the select few who control carbon credits and the rest of us would be the losers.2
According to The Heritage Foundation:
Should [the cap and trade bill] become law, Waxman-Markey will reverberate throughout the economy, costing the nation an average of $393 billion annually and over a million jobs from 2012 to 2035.3
Besides the social-reengineering impact of the bill on the U.S. economy, the cap and trade bill’s intended benefits seem to flow to the United States’ trading partners who do not have to operate under the same limitations.
- “Emissions Trading”. Wikipedia. 21 July 2009.↩
- Richman, Larry. “Cap & Trade Scam”. 18 July 2009. Richman Ramblings. 21 July 2009.↩
- Lieberman, Ben. “Waxman-Markey: Homeowners, Small Businesses, and Farmers Hit the Hardest“. 21 July 2009. The Heritage Foundation. 21 July 2009.↩