Orrin Hatch on Cap and Trade

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.

Cap and Trade 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.

Should the Senate pass a similar version of the cap and trade bill?

View Results

Loading ... Loading ...

Sources:

  1. “Emissions Trading”. Wikipedia. 21 July 2009.
  2. Richman, Larry. “Cap & Trade Scam”. 18 July 2009. Richman Ramblings. 21 July 2009.
  3. Lieberman, Ben. “Waxman-Markey: Homeowners, Small Businesses, and Farmers Hit the Hardest“. 21 July 2009. The Heritage Foundation. 21 July 2009.

Tags: ,

  1. Last Lemming’s avatar

    I voted no, but not for all the same reasons as Hatch. His letter contains a mixture of truth and wrongheadedness.

    # Such proposals are not the most effective approach to reducing carbon emissions (CO2).

    True. A straight carbon tax would be more efficient and probably more effective. But I suspect that Hatch would be even more strongly opposed to such a tax.

    # There is considerable debate within the scientific community regarding the theory of anthropogenic global warming (AGW). This theory is based on questionable assumptions.

    Not anymore. This debate is being carried out in the political community, not the scientific community.

    # If all provisions of the cap and trade program were implemented global temperatures would only decrease by nine-hundredths of a degree Fahrenheit.

    Wrong question (even though it implies that AGW is real). The correct question is how much temperatures would rise if such a program were not implemented. It is important to remember that global warming is not going to be reversed. The best we can hope for is to stop it or keep it at levels we can adapt to without disasters.

    # 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.

    I doubt the “highest increase in the nation” thing, but that isn’t the real point. Politicians across the country seem to think that this problem can be solved without anybody paying higher prices for their energy. But the whole point is to get them to consume less or switch to forms of electricity that are not carbon-dependent. As all free-market proponents know, the best way to reduce consumption of something is to increase its price.

    # 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.

    This is a real concern. The strongest rebuttal is that China and India will never be moved to act unless they see the developed world making sacrifices first.

    # 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.

    This is where the House bill loses me altogether. We should be auctioning off the credits, not pre-selecting winners by giving credits away (not to mention exempting certain sectors entirely).

  2. Greg’s avatar

    Although I am not a Hatch fan, I think his letter to Larry Richman does contain some valid points. However, it is revealing that this is more a political debate rather than a scientific one. The economic consequences of this bill just might be staggering. Especially given the fact that China, presumably as one of the primary beneficiaries of this bill, precipitated last year’s economic crises (see for example, China and the Bailout) and recently proposed a new world currency (see China Reiterates Call for New World Reserve Currency).

  3. Bull Moose’s avatar

    LL said about considerable debate among scientists concerning AGW: “Not anymore. This debate is being carried out in the political community, not the scientific community.”

    This would have been correct had you said this in 2007. In reality, the dissent and debate is growing. For instance, look here:
    http://epw.senate.gov/public/index.cfm?FuseAction=Minority.Blogs&ContentRecord_id=2158072E-802A-23AD-45F0-274616DB87E6

    and here:
    http://en.wikipedia.org/wiki/List_of_scientists_opposing_the_mainstream_scientific_assessment_of_global_warming

    or read this book:
    http://www.amazon.com/Deniers-Renowned-Scientists-Political-Persecution/dp/0980076315

    Just because Al Gore will not deviate from his “The science is settled” mantra which is a great marketing slogan, does not mean that science agrees with his business plan.

  4. Greg’s avatar

    Thanks for the links Bull Moose!

  5. Mark D.’s avatar

    The reason why electricity price increases in Utah will likely be among the highest increases in the nation if this thing passes is that ~90% of our electricity comes from coal, which is relatively cheap.

    The average for the country is about 50% coal, 20% nuclear, 20% natural gas, and 10% other.

  6. Dave C.’s avatar

    Oh My! How many more years of this Democratic lunacy must we endure?
    3 years to go? I don’t know if we will be able to hold on. The ship of state is sinking fast.

Leave a Reply