Tuesday, July 14, 2009

Waxman Markey Cap & Trade Superior To Price & Tax

Some environmental groups and climate activists* recently held a briefing in Washington, DC to express their support for an energy price increase and tax bill instead of a climate bill. Their bad idea for reducing carbon dioxide (CO2) is to raise the price of electricity through increasing taxes on it and redistributing money back to the public. Huh? Why not just reduce taxes? And pass the much superior Waxman/Markey climate legislation [passed House 219-212], which puts a cap on CO2 emissions. Admittedly Waxman/Markey is not perfect but it is a great start on reducing emissions that cause climate change. The Center opposes using unreasonable price increases as a conservation tool. The Senate needs to pass an improved version of Waxman/Markey and forget about price shocking and taxing our way into societal chaos.

The energy price increase and tax activists believe cap-and-trade tries to hide the carbon price, which gives opponents license to make outrageous claims about its cost. So the activists promote a fictitious 'revenue-neutral carbon tax,' which they believe would provide a clear price signal. Everything is wrong with this approach. It would increase prices on everything and then, according to its proponents, redistribute revenues back to the public to offset price increases and higher taxes. In reality it would speed us into double digit unemployment, interest rates and create out of control inflation. The plan is a prescription for years of recession and quite possibly depression.

Although the Waxman-Markey critics believe that approach would fail to reduce CO2 emissions enough to prevent catastrophic warming, they should understand that it does not matter what we do if India and China do not reduce their emissions. We need to serve as an example for India and China. Moreover, Western nations need to show goodwill in this area to emerging nations.

Critics believe the trading component of cap-and-trade -- buying and selling permits to release CO2 -- would also create a trillion-dollar market in carbon futures and derivatives that could crash financial markets again. We disagree. We believe it would create a vibrant global competition for installation of innovative technologies.

* Friends Committee on National Legislation, Progressive Democrats of America, The Clean Coalition, Price Carbon Campaign, Dr. James Hansen, climate scientist; Dr. Robert Shapiro*, Co-founder and Chairman of Sonecon and the U.S. Climate Task Force, and former U.S. Undersecretary of Commerce; Cecil Corbin-Mark, Deputy Director of WE ACT for Environmental Justice and Co-Coordinator of Environmental Justice Leadership Forum on Climate Change; Professor Janet Milne of Vermont Law School, contributing author of "The Reality of Carbon Taxes in the 21st Century," Brent Blackwelder, President of Friends of the Earth, moderated. The briefing was hosted by the Carbon Tax Center, Climate Crisis Coalition, and Citizens Climate Lobby. (Earth Times, 7/13/09, Climate Crisis Coalition; Citizens Climate Lobby; Carbon Tax Center)

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