Cap & trade: as fury begins, truth elusive
For those not watching things in Congress, the debate over the
Waxman-Markey energy bill centered around cap & trade has begun
in earnest. As
this Wall Street Journal blog notes, there is plenty of
partisan posturing around the bill.
This legislation matters to manufacturers, especially those in
energy-intensive sectors who might exceed allowances if they use
equipment such as coal-fired furnaces or boilers for their core
processes. I’ve said here before that there would be a big
political hub-bub over this legislation, but something is likely to
pass, given the Democrats’ advantage in Congress, and the overall
political will for serious change on energy policy.
The political posturing around cap & trade isn’t
surprising. What’s more surprising is just how hard it is to sort
through the truth. The most confusing thing is the conflicting
studies on the economic impact of cap-and-trade. A Heritage
Foundation study cited by some Republican critics of cap &
trade says Waxman-Markey would drive jobs from the U.S. economy to
the tune of 844,000 per year. However, a study
from The Pew Center on Climate Research says energy-intensive
manufacturing sectors would face only modest competitive impacts
under a cap-and-trade program. The EPA also has its own economic
analysis of Waxman-Markey. I would tend toward the Pew Center’s
findings as more objective, but then again, the truth probably lies
somewhere in the middle. Keep in mind these studies aren’t always
based on the same set of assumptions or status of the evolving
bill’s components. There is also much political obfuscation going
on with study numbers, such as the
inaccurate claim that cap & trade amounts to a $3,100 tax
on families.
For those of us involved with manufacturing, the progress of cap
& trade legislation is certainly worth monitoring, but I would
take the claims and counter claims in stride. For managers in the
trenches, the best thing to do is monitor
what actually unfolds with Waxman-Markey (HR 2454), and prepare
by enhancing the ability to track and manage one’s carbon
footprint.
Roberto Michel commented:
I don't doubt that cap & trade carries significant costs for consumers and businesses. But part of the whole idea seems to be build an incentive for businesses to decrease reliance on fossil fuels and invest more in renewables and energy efficiency. If cap and trade were pain free, it definately would NOT work. If it does succeed as an incentive, it would encourage a clean energy economy that would build new green jobs. At least, that's the defense for the costs or "stick" in cap & trade's carrot/stick approach.
David Holt, President, Consumer Energy Alliance commented:
One of the more interesting things about Waxman-Markey is what’s its not! It is NOT an energy bill and it does NOT do anything to help consumers. There are literally 100s of millions of jobs directly tied to energy. From the 20 million folks employed in manufacturing to the 10 million airline industry employees to 2 million folks working in iron & steel to the more than 40 million retirees living on fixed incomes in this country, any increase in energy costs will have a profound impact on jobs and the economy. By working to impose new taxes on hard-working Americans without also developing a much-needed comprehensive, balanced, long-term approach to energy policy, Waxman-Markey misses the mark. While the costs of Waxman-Markey may be subject to debate on the margins, there is no debate that it will raise costs for consumers throughout the economy. At a time of deep recession, high unemployment and uncertain recovery, it is troubling that this bill hits America in the pocketbook without offering any benefits for energy consumers. David Holt, President, Consumer Energy Alliance www.consumerenergyalliance.com
