The Senate Environment and Public Works Committee began their hearings on the 1,500 page Waxman-Markey cap and trade legislation Tuesday, and ranking member Senator James Inhofe (R-OK) won a startling admission from Environmental Protection Agency administrator Lisa Jackson. Inhofe produced an EPA chart generated last year during the Senate’s debate of the Lieberman-Warner cap and trade legislation. The chart showed that the carbon reductions under that bill would not materially effect global carbon concentrations in the atmosphere. Inhofe then asked Jackson if she agreed with the chart’s conclusions. Jackson replied: “I believe that essential parts of the chart are that the U.S. action alone will not impact CO2 levels.”
Also at the hearing, Energy Secretary Steven Chu said he did not agree with chart which is interesting since all the best science confirms Inhofe’s and Jackson’s conclusions. For example, a recent study of cap and trade by MIT concluded: “The different U.S. policies have relatively small effects on the CO2 concentration if other regions do not follow the U.S. lead. … The Developed Only scenario cuts only about 0.5 °C of the warming from the reference, again illustrating the importance of developing country participation.”
So how is that “developing country participation” going? The New York Times reports from the Group of 8 summit in L’Aquila, Italy: “The world’s biggest developing nations, led by China and India, refused Wednesday to commit to specific goals for slashing heat-trapping gases by 2050, undercutting the drive to build a global consensus by the end of this year to reverse the threat of climate change.” For anyone that has been following the issue, this development should come as no surprise. On June 30th of this year India’s Environment Minister Jairam Ramesh told Bloomberg: “India will not accept any emission-reduction target — period. This is a non-negotiable stand.” China has also made it explicitly clear that they view the carbon tariffs in the Waxman-Markey bill as a violation of World Trade Organization rules.
So if other countries will not sacrifice their own economic growth to meet carbon cutting goals, then what is the economic hit Americans are taking? The left is touting a recent Congressional Budget Office study which they say shows Waxman-Markey would only cost Americans $175 a year. However, the left is seriously misrepresenting what the CBO study is. Footnote three on page four of the CBO study explicitly admits: “The resource cost does not indicate the potential decrease in gross domestic product (GDP) that could result from the cap.
The reduction in GDP would also include indirect general equilibrium effects, such as changes in the labor supply resulting from reductions in real wages and potential reductions in the productivity of capital and labor.” In other words, the CBO study is not an economic analysis at all. Instead it is a simple accounting of how energy tax revenue that Waxman-Markey collects is distributed. When the economic costs of Waxman-Markey are included, the harm to American families skyrockets. According to Heritage’s Center for Data Analysis Waxman-Markey will decrease GDP in 2020 by $161 billion (2009 dollars). For a family of four, that is $1,870 that the CBO simply ignores.
All economic pain, for no environmental gain. No wonder the Obama economy is failing.