Americans are horrified by the damage being done to the Gulf Coast region's environment and local economies by the oil spill. Clearly, every measure needs to be taken to mitigate that damage and figure out what went wrong so that such accidents can be prevented in the future. Yet the disaster in the Gulf shouldn't be an excuse to create a new economic disaster, by raising energy prices for millions of Americans and by ceasing responsible exploration for oil and natural gas.
While the Administration has been slow to take action to mitigate the oil spill's damage (and in some cases, it has been actively impeding state and local efforts to combat the damage and turning away foreign assistance), it is wasting no time in using the disaster to advance a long-planned “energy bill” that will increase costs for all Americans and lead to more job loss.
Politicians are gathering to consider what iteration of cap-and-trade Congress might be able to ram through before voters can make their preferences known in November. The details of the legislation will matter very much, particularly to the industries and companies that will lobby for exemptions and favored treatment. And, much like with health care, we likely won't know exactly how much more individual Americans will have to pay as a result of any new cap-and-trade bill until the legislation is fully implemented.
Yet we do know that Americans will be paying more, and not just for direct energy usage—for gasoline to power their cars and for oil and gas to heat their homes—but for just about every product and service they consume. By design, any cap-and-trade program will raise the cost of using fossil fuels, which currently supply about 85 percent of America's energy needs. Those higher energy prices are meant to encourage both American families and businesses to use less energy: to buy more fuel efficient vehicles and appliances, and incorporate alternative energy sources.
That may happen over time, but in the short-term Americans' habits can only change so much. As businesses spend more money on overhead, from lighting building to transporting goods, they will have less to spend on employing workers or investing in new research and technologies. Some of those higher costs will be passed on to consumers. Americans will have to spend more on everything from food to clothes to service calls to home heating. That means their overall purchasing power will decline. And as they buy less, American businesses will suffer.
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