Some things virtually everyone agrees on. We all want a cleaner environment. We all want a booming economy.
Last week, the House Energy and Commerce Committee approved a bill that’s being marketed as a way to give us a “better” environment. Unfortunately, the legislation, sponsored by Democratic Reps. Henry Waxman of California and Edward Markey of Massachusetts, would inflict tremendous economic pain for no discernable environmental gain.
The bill would do two things: 1) force companies to make more energy efficient (and far more expensive) products, and 2) create a cap-and-trade system that serves as a massive tax on fossil fuels.
The energy mandates include a requirement that the nation increase production of electricity from renewable sources fivefold in the decades to come. This may or may not be technologically possible. But the bill shows little regard for technological -- or economic -- realities.
The cap-and-trade portion of the law is even more problematic.
Cap-and-trade forces businesses and consumers to either use less fossil-fuel based energy or buy credits from businesses that do. It would give immense power to unelected bureaucrats who’d be in charge of deciding how much carbon certain industries would be allowed to emit.
Using a well-known and widely respected computer model, economists at The Heritage Foundation ran simulations to see what would happen if Waxman-Markey becomes law. The study shows that energy prices would soar, even as the economy sheds millions of jobs.
For a typical family of four, direct energy costs (gasoline, natural gas and electricity) would increase by some $800 per year each year until 2035. All together during the years 2012-2035, a typical family of four would see its direct energy costs soar by $19,900. And that price tag doesn’t even include the indirect costs consumers would have to pay for more efficient, yet more expensive, appliances.
Cap and trade is like a massive tax on productivity. After all, “productivity” -- making things, going places -- requires the use of energy. So it’s no surprise that the Heritage study shows our nation’s economy would take a big hit.
“On average, employment is lower by 1,105,000 jobs,” the study found. “In some years cap and trade reduces employment by nearly 2.5 million jobs.”