Wednesday, July 8, 2009

what does the Cap and Trade really do?

let's hear it from a Congressman:

Thank you for contacting me about The American Clean Energy and Security Act of 2009, which includes a cap and trade system to address climate change and a Renewable Electricity Standard to increase the generation of electricity from renewable sources. I appreciate the opportunity to respond.

As you may know, I have been recognized as one of our nation's strongest advocates of renewable, domestic sources of energy. I have led efforts to change our national energy policies to encourage energy conservation and improve energy efficiency to reduce threats to our national security, economic prosperity and environment. During the last Congress, I worked closely with Senators Maria Cantwell (D-WA) and John Ensign (R-NV) and succeeded in extending tax credits for renewable energy and energy efficiency.

I'm a scientist and I've studied this issue very carefully. I agree that emissions, primarily carbon dioxide (CO2) from burning fossil fuels to produce electricity and for transportation, damage our global environment. However, our dependence upon oil, especially imported oil, poses a far graver and more urgent threat to Americans' economic prosperity and our national security.

President Barack Obama proposed a cap and trade system for C02 emissions in order to reduce threats from climate change and a Renewable Electricity Standard to require 25% of electricity to be generated by renewable sources by 2025. It is a shame that the House majority chose to pursue a purely partisan process that produced a complex, convoluted, monstrosity of a bill.

On March 31, 2009, Reps. Henry Waxman (D-CA) and Ed Markey (D-MA) released a 650-page draft of H.R. 2454. Centerpieces of the draft were mandated reductions in C02 emissions in the United States through a cap and trade system and a Renewable Electricity Standard. Significant details in H.R. 2454 were purposely omitted. These details became the subject of intense lobbying by special interest groups.

After a series of hearings, the committee approved a 900-page version with four Democrats opposing it and only one Republican supporting it. H.R. 2454 requires CO2 emissions to be reduced 20 percent by 2020 and 83 percent by 2050. It also includes a Renewable Electricity Standard requiring utilities to produce 6% of their electricity from renewable sources by 2012 and 20% by 2020.

The requirements under H.R. 2454 to achieve emissions reductions through a cap and trade system in combination with renewable electricity generation are significantly more aggressive than Maryland's existing commitments. Estimates of the amount vary, but H.R. 2454 would increase the price of energy for households and businesses in Maryland. Rep. John Dingell (D-Michigan) observed, "Nobody in this country realizes that cap and trade is a tax, and it's a great big one."

Unless there is an international agreement with mechanisms for measurable and verifiable reductions in C02 emissions, self-imposed C02 emissions reductions by the United States will not necessarily reduce global emissions that are contributing to global warming. Increasing energy prices in the United States from capping emissions could very well encourage energy-intensive manufacturing industries to move these factories and their jobs to countries which don't or won't reduce their emissions. Lower emissions from the U.S. could be more than offset by increased global emissions from as a result of higher emissions from other countries. Affected industries include automobiles, steel, cement, glass, industrial/medical gases, pharmaceuticals and aluminum among others.

H. R. 2454 includes tariffs that would result in a lose-lose dilemma for the United States. The new tariffs would impose tax increases upon the imports from countries that did not impose similar emissions reductions upon their industries. The tariffs would attempt to level the playing field to protect American jobs and factories from being outsourced to countries, such as India or China, where top officials have said they won't reduce their emissions unless the U.S. pays them to do so. However, such punitive tariffs would likely spark a debilitating trade war that would reduce trade and economic growth worldwide. That is what happened after Congress approved Smoot-Hawley tariffs that provoked the Great Depression of the 1930's. Perhaps that is why President Obama said that he opposes these tariffs in H.R. 2454.

There were hundreds of pages of changes in the two days before the House voted on H.R. 2454. A 1,201 page version, H.R. 2998, was published on June 23, 2009. Members offered 224 changes. However, only a single manager's amendment by Rep. Waxman was allowed by Speaker of the House Nancy Pelosi. This 341-page list of changes was made to the bill at 3:09 am just hours before the House voted on H.R. 2454 on June 26, 2009. The final 1,428 page version of H.R. 2454 deserves to be rejected because of the political games and back room deals that produced it.

I've never voted for a tax increase. That is the main reason why I could not support H.R. 2454. The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) estimated that H.R. 2454 would force a massive federal government-imposed redistribution of approximately $1 trillion over the next ten years. Specifically, CBO/JCT estimated that over the next ten years federal tax revenues would increase by about $846 billion while federal government spending would increase by about $821 billion. The net result, CBO/JCT estimated would be an increase in federal government revenues of $24 billion. Most of the increase in revenues would come from the cap and trade system in H.R. 2454. CBO found that H.R. 2454 would also impose annual unfunded mandated spending increases of $69 million upon state and local governments and $139 million upon private businesses and individuals beginning in 2009.

My constituents clearly understood that H.R. 2454 is a gigantic hidden tax that they would end up paying. That's why they were overwhelming opposed to it. H.R. 2454 was narrowly approved 219 - 212. 211 Democrats and 8 Republicans voted yes. I was among the 44 Democrats and 168 Republicans who voted no.

The Senate has taken a completely different approach to energy and environment policy legislation. Sens. Jeff Bingaman (D-NM) and Lisa Murkowski (R-AK) have led a bipartisan consensus in approving more than two dozen energy-related bills. They intend to combine them into a comprehensive energy bill that would not include a cap and trade system. Sen. Barbara Boxer (D-CA) said that she hoped to use the cap and trade system in H.R. 2454 as the basis for similar legislation.

It remains to be seen how the Senate will act concerning energy and environment legislation. However, President Obama and House Democratic leaders favor a single bill similar to H. R. 2454 that would include a cap and trade system. In any event, a conference committee of House and Senate members would have to resolve differences between H.R. 2454 and any legislation approved by the Senate. That compromise Conference Report would have to be approved by both the House and the Senate before a bill could be sent to the President for his consideration.

I believe it is important that legislation to reduce C02 emissions complements rather than conflicts with policy changes to reduce America's oil imports. I also believe that legislation to reduce C02 emissions must not make American workers and businesses less competitive in the world economy while failing to reduce global emissions. I will continue to support policy changes that will encourage energy conservation, increase energy efficiency, reduce energy costs, promote domestic, renewable sources of energy, and reduce reliance upon fossil fuels, especially oil for transportation. I am hopeful that bipartisan efforts in the Senate will lead to legislation I can support that will reduce CO2 emissions and our dependence upon fossil fuels, especially imported oil, without the federal government taking more money from taxpayers.

Thank you again for sharing your views. I look forward to hearing from you regarding any issues you may find important in the future. I encourage you to review more facts about energy at http://www.bartlett/ You may also sign up for email updates at my website:

Sincerely, Roscoe Bartlett
Member of Congress

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