Mount Vernon Area Tea Party, Washington
Cap and Trade (HR 2454) Passed the HOUSE of REPRESENTATIVES on June 26, 2009. We may have lost a battle but not the war.
Write, Call, Fax, Email your Senators every week.
Let them know that we do not want the largest TAX in the history of the world! BASIC BACKGROUND INFORMATION Obama's Energy Taxhttp://www.americansforprosperity.org/022709-obamas-energy-taxThe 2010 Obama budget reveals the major tax hike that Pelosi, Reid, and Obama are counting on to fund the outrageous bailout and stimulus spending that is propelling federal spending to record levels-27.7 percent of GDP in 2009, an all-time record other than the four peak years of WW II.The tax hike is a broad-based energy tax that will wallop every American who fills a gas tank, pays an electric bill, or buys any product that has to be grown, shipped, or manufactured.The mechanism is cap-and-trade, which is like a tax on coal, oil, and natural gas but instead of being set at a specific amount, the total level of use is capped and companies are forced to pay the government for emissions permits-which Wall Street wizards at companies like AIG and Goldman Sachs can in turn trade on sophisticated exchanges and derivative markets.White House Budget Director Peter Orzcag admitted that decreasing carbon emissions imposes costs on the economy, and "much of those costs will be passed along to consumers in the form of higher prices for energy and energy-intensive goods."Page 21 of the Obama budget proposal highlights his cap-and-trade proposal:“After enactment of the Budget, the Administration will work expeditiously with key stakeholders and the Congress to develop an economy-wide emissions reduction program to reduce greenhouse gas emissions approximately 14 percent below 2005 levels by 2020, and approximately 83 percent below 2005 levels by 2050”. The economic impact of such a policy would be devastating. Even using the Obama administration's own official numbers, it would amount to a tax hike of $645 billion over the first 8 years, about $80 billion per year--and the White House has since admitted the real tax hike could be two or three times as much. That's just the first 8 years of a program that runs through 2050. As the cap becomes more and more strict over time, those costs would skyrocket into many trillions of dollars. Obama's proposed 83 percent reduction below 2005 levels by 2050 dwarfs the proposal from last year's Lieberman-Warner bill, which included a 63 percent reduction. While we don't have numbers yet on the new proposal, the cost of last year's bill is instructive. A study conducted by SAIC (the same modeling firm the Energy Department uses for its own projections) for the American Council on Capital Formation, found that electricity prices would be expected to increase under anywhere between 101 percent and 129 percent by the year 2030. Prices at the pump would jump 77 percent to 145 percent-bringing not just $4 gasoline, but very possibly $8 gasoline or higher. The estimated impact on disposable household income due to rising energy prices would then reach anywhere between $4,022 and $6,752. And because an energy tax is regressive, it will fall heaviest on poor and lower middle class folks who spend more of their income on energy. President Obama himself described his plan in an interview with the San Francisco Chronicle last year this way:“Under my plan of a cap and trade system, electricity rates would necessarily skyrocket... whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers”.The new version of the plan in the Obama budget is much more aggressive, and reducing emissions another 20 percent will be dramatically more costly-possibly as much as double the cost since the additional cuts will come in the most difficult and expensive areas, like transportation and agriculture.While the lost purchasing power for a typical household will decline by many thousands of dollars, the administration promises the plan will be "offset" by the $400 per worker rebate checks that were passed as part of the stimulus bill. Paying thousands and getting back hundreds is a bad deal for American families.This is not a side-effect of his plan--it's the intended goal, which was clear when Obama said in his address to Congress that he wants to give so-called renewable energies a market advantage, which can only be done by imposing a tax that dramatically increases the cost of natural gas, oil, and coal.This policy would destroy the only bright spot in the current economic environment, low energy prices, and cause severe economic pain. It should not even be contemplated if we are serious about addressing the country's economic crisis.http://www.atr.org/atr-energy-tax-hike-series-cap-a3103#
Alaska Governor Sarah Palin on "The Cap & Tax Dead End"...I am deeply concerned about President Obama's cap-and-trade energy plan, and I believe it is an enormous threat to our economy. It would undermine our recovery over the short term and would inflict permanent damage.
American prosperity has always been driven by the steady supply of abundant, affordable energy. Particularly in Alaska, we understand the inherent link between energy and prosperity, energy and opportunity, and energy and security. Consequently, many of us in this huge, energy-rich state recognize that the president's cap-and-trade energy tax would adversely affect every aspect of the U.S. economy.
There is no denying that as the world becomes more industrialized, we need to reform our energy policy and become less dependent on foreign energy sources. But the answer doesn't lie in making energy scarcer and more expensive! Those who understand the issue know we can meet our energy needs and environmental challenges without destroying America's economy.
Job losses are so certain under this new cap-and-tax plan that it includes a provision accommodating newly unemployed workers from the resulting dried-up energy sector, to the tune of $4.2 billion over eight years. So much for creating jobs.
In addition to immediately increasing unemployment in the energy sector, even more American jobs will be threatened by the rising cost of doing business under the cap-and-tax plan. For example, the cost of farming will certainly increase, driving down farm incomes while driving up grocery prices. The costs of manufacturing, warehousing and transportation will also increase.
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The Americans hit hardest will be those already struggling to make ends meet. As the president eloquently puts it, their electricity bills will "necessarily skyrocket." So much for not raising taxes on anyone making less than $250,000 a year.
Even Warren Buffett, an ardent Obama supporter, admitted that under the cap-and-tax scheme, "poor people are going to pay a lot more for electricity."
We must move in a new direction. We are ripe for economic growth and energy independence if we responsibly tap the resources that God created right underfoot on American soil. Just as important, we have more desire and ability to protect the environment than any foreign nation from which we purchase energy today.
In Alaska, we are progressing on the largest private-sector energy project in history. Our 3,000-mile natural gas pipeline will transport hundreds of trillions of cubic feet of our clean natural gas to hungry markets across America. We can safely drill for U.S. oil offshore and in a tiny, 2,000-acre corner of the Arctic National Wildlife Refuge if ever given the go-ahead by Washington bureaucrats.
Of course, Alaska is not the sole source of American energy. Many states have abundant coal, whose technology is continuously making it into a cleaner energy source. Westerners literally sit on mountains of oil and gas, and every state can consider the possibility of nuclear energy.
We have an important choice to make. Do we want to control our energy supply and its environmental impact? Or, do we want to outsource it to China, Russia and Saudi Arabia? Make no mistake: President Obama's plan will result in the latter.
For so many reasons, we can't afford to kill responsible domestic energy production or clobber every American consumer with higher prices.
Can America produce more of its own energy through strategic investments that protect the environment, revive our economy and secure our nation?
Yes, we can. Just not with Barack Obama's energy cap-and-tax plan.
http://www.washingtonpost.com/wp-dyn/content/article/2009/07/13/AR2009071302852_pf.html ATR Obama Budget Analysis: Energy Tax Hike Series
Cap and Trade
Current Law
When world economies engage in global trade, there must be production of goods.This production of goods emits carbon. Under the Kyoto Protocol, several countries have implemented a method of cap and trade. Cap and trade is a system by which the
government sets an arbitrary level, or “cap”, on the amount of carbon that companies are allowed to emit. Companies must then purchase credits from the government that represent the right to emit a specific amount. Companies that wish to increase their emissions must buy credits (the “trade”) from those who produce less.
In an effort to maintain United State competitiveness and productivity, there is not a current cap and trade system in effect. Every cap and trade system proposed in the U.S. Congress has been rejected by not only members, but the general public as well....
Obama Proposal
The Obama FY 2010 budget proposal will implement a cap and trade system on all American businesses.
ATR Analysis
The implementation of a cap and trade program on American businesses will result in a tax increase of $646 billion dollars over 10 years as called for in the Obama budget. When fully phased in, this will be a $100 billion per year tax on American businesses. This tax will decrease U.S. competitiveness and increase consumer costs. Cap and trade systems punish businesses for being successful. As companies become more successful and employ more Americans, their production of goods increases. Along with this production, comes the natural byproduct from increased energy use. The purposeful taxation of this success by forcing an arbitrary cap on production emissions is counterproductive to a prosperous economy. Every family in America will pay this cap and trade tax in the form of higher energy prices.
For more information, contact tax policy director Ryan Ellis at rellis@atr.org or federal energy manager Brian Johnson at bjohnson@atr.org
Cap and Trade Is A Tax and It's a Great Big One - John Dingell (D-MI)
by heritage.org
http://www.heritage.org/Press/FactSheet/fs0027.cfm
Cap and Trade Top Ten List
§ Cap and Trade Is a Massive Energy Tax.
§ It Will Not Make A Substantive Impact on the Environment.
§ It Will Kill Jobs.
§ It Will Cause Electricity Bills and Gas Prices to Sharply Increase
§ It Will Outsource Manufacturing Jobs and Hurt Free Trade
§ It Will Make You Choose Between Energy, Groceries, Clothing, and Haircuts
§ It Will Be Highly Susceptible to Fraud and Corruption
§ It Will Hurt Senior Citizens, the Poor, and the Unemployed the Worst.
§ It Will Cost American Families Over $3,000 a Year.
§ President Obama Admitted "Electricity Rates Would Necessarily Skyrocket" under a cap-and-trade program (January 2008)
What Would Global Warming Regulations Do?
§ Lieberman-Warner: Last year, the Senate rejected cap-and-tax legislation that would have capped CO2 emissions 70% below 2005 levels by 2050. A Heritage analysis of that bill found startling economic impacts.
§ Markey-Waxman: The cap-and-trade tax proposed by Rep. Henry Waxman (D-CA) and Rep. Edward Markey (D-MA) would double down on last year's failed scheme, bringing in trillions of dollars in taxes, making it one of the largest sources of revenue for the federal government.
§ Six Hundred Hurricanes Couldn't Cause This Much Economic Damage: In the first 20 years, Lieberman-Warner would have destroyed nearly 3 million jobs, caused some manufacturing sectors to cut jobs by 50% and generated up to $300 billion per year in government revenue while reducing income by nearly $5 trillion. For comparison, this is equal to the economic damage done by over 600 hurricanes...and the Markey-Waxman bill is worse.
§ Green Jobs Are a Myth; Real Job Losses Are Not: For every "green job" created, others are wiped out. Job losses resulting from the Lieberman-Warner cap and trade would have surpassed 900,000 in some years. Keep in mind that this is net of any "green jobs" created.
§ New Version, More Expensive: Markey-Waxman will be much more costly than the bill rejected by the U.S. Senate last year. Such an expensive tax on all Americans is bad under normal circumstances and worse during a recession.
A "Carbon Constrained Future"
§ The Ultimate Outsourcing: India and China have repeatedly said they would not match U.S. environmental goals in order to protect their economies. Cap and trade will merely move manufacturing jobs to China and India.
§ By 2100: By EPA calculations, the Lieberman-Warner bill could at best result in a global drop in temperature of only 0.1 to 0.2 degrees Celsius by the year 2100.
§ A Carbon Tax Would Be No Different: Alternative carbon taxes share the central flaw of any other carbon reduction scheme. Similar to cap and trade, a carbon tax would cause significant economic damage and would do very little to reduce global temperatures.
§ An Alternative That Supports American Taxpayers: Instead of appeasing a radical environmental agenda, President Obama should give us access to all energy sources, including domestic oil production, nuclear energy, coal, and new renewable fuels. Instead of new taxes, the President should aim to lower gas and electricity prices. When government impediments are lifted, America's energy entrepreneurs can develop innovative and market-driven solutions to our energy needs.
§ For more information, please visit: http://blog.heritage.org/2009/05/01/cap-and-trade-is-a-tax-and-its-a-great-big-one.
Any honest economist will tell you that a carbon cap and trade scheme, if it works perfectly, functions the same as an energy tax. The Waxman-Markey cap and trade bill currently under consideration in Congress is no different. In 2007, MIT did a study on the costs of cap and trade and found that cap and trade proposals that would reduce carbon emission by 50% to 80% below 1990 levels by 2050 would cost the American household $800 a year in economic losses and $3,100 a year in taxes collected by the federal government. That’s a total $3,900 cost for the average American household! How does this cost compare to other household expenses?
http://blog.heritage.org/2009/05/08/what-a-cap-and-trade-energy-tax-will-cost-average-american-households/
CAPAND TRADE
GREENWASHING
Even global warming icon James Hansen has joined the cap and trade truth bandwagon. In his letter to Obama, Hansen writes:
A tax should be called a tax. The public can understand this and will accept a tax if it is clearly explained and if 100 percent of the money is returned to the public. Not one dime should go to Washington for politicians to pick winners. No lobbyists need be employed. Beware of alternative approaches, such as ‘percent emission reduction goals’ and ‘cap and trade’. These are subterfuges designed to allow business-as-usual to continue, under a pretense of action, a greenwashing. Hordes of lobbyists will argue for these approaches, which assure their continued employment.
http://thenationalscene.com
by SteveK @ 2:56 pm on May 28, 2009.
“I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes.” - Barack Obama during campaign
We are all familiar with Obama constantly promising Americans that he would not raise taxes on those making less than a quarter million per year. Turns out, unsurprisingly, that was a lie. It is impossible to quadruple the national debt and pay for it all by raising taxes on just 1-2% of the taxpayers. So the Democrats are using a less obvious method to tax your money away called cap-and-trade.
Cap-and-trade is a deception cloaked in the language of saving the environment. The ostensible goal is to steadily reduce carbon dioxide and other greenhouse gas emissions. This assumes that CO2 is harmful for the environment, which is not proven and highly suspect, especially when you consider it’s a natural gas given off by animals, and plants use it to grow and produce oxygen. The debate is far from over on anthropogenic global warming, and many prominent scientists have turned from believers to skeptics and the list is growing. Cap-and-trade will not have a significant impact on the environment, but it will destroy jobs and greatly increase the cost of energy.
Who will be most affected by cap-and-trade? The unemployed, the poor, and senior citizens. It will increase the energy bills for Americans by an estimated average of $1500-$3,000 per year. President Obama even admitted: “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.”
Prior to the election when gasoline prices were soaring during the summer, Obama only expressed concern that prices were rising too fast. It was not the fact that prices were rising that bothered him, but the rate at which they increased. Obama and environmental extremists would like to see all our energy bills “skyrocket.”
Democrats know that businesses really do not pay taxes. So when taxes are increased on energy producers, it is the consumers who ultimately pay those higher taxes through higher prices. So when Democrats attack businesses it really serves a dual purpose - they get to act like they are the party of the ‘little guy’, and they get to raise our taxes in a more indirect way.
The value-added tax (VAT) is another scheme by the Democrats floating around Washington to steal more of our money. The VAT would be used to pay for government-controlled national health insurance, and would be a type of national sales tax. A VAT is among the most regressive taxes that can be imposed. All consumers would pay this tax, and since the poor and working class consume more as a percentage of their income, they will be hurt the most by it (like most liberal policies).
Could Obama and the Democrats have picked a worse time to raise taxes on America? Here we are in a recession with increasing unemployment and people struggling to pay their bills, and what do they decide is best for the country - raise natural gas prices 55%, gasoline prices 74%, and electricity rates 90% after adjusting for inflation. Not only did Obama lie to us, but he simply does not care that he is hurting Americans at a time when they need the most relief.
We don't need ANY more taxes!
We are killing our companies! Cap and Trade "would be the equivalent of an atomic bomb directed at the U.S. economy, all without any scientific justification," says famed climatologist Dr. S. Fred Singer. It would significantly increase taxes and the cost of energy, forcing many companies to close, thus increasing unemployment, poverty and dependence.
More and more scientists and thinking people all over the world are realizing that man-made global warming is a hoax that threatens our future and the future of our children. More than 700 international scientists dissent over man-made global warming claims. They are now more than 13 times the number of UN scientists (52) who authored the media-hyped IPCC 2007 Summary for Policymakers.
http://www.climatechangefraud.com/content/view/3562/218/
Additionally, more than 30,000 American scientists have signed onto a petition that states, "There is no convincing scientific evidence that human release of carbon dioxide, methane, or other greenhouse gases is causing or will, in the foreseeable future, cause catastrophic heating of the Earth's atmosphere and disruption of the Earth's climate."
http://www.petitionproject.org
"Progressive" (communist) politicians like Obama seem determined to force us to swallow the man-made global warming scam. We need to defend ourselves from the United Nations and these politicians, who threaten our future and the future of our children. Based on a lie, they have already wasted billions and plan to increase taxes and increase the cost of energy, which will limit development, destroy our economy and enslave us. If not stopped, the global warming scam will enrich the scammers (Gore and Obama's Wall Street friends), increase the power of the United Nations and communists like Obama, and multiply poverty and servitude for the rest of us.
Cap and Trade
Again our politicians play on the uneducated people of the US and with the help of our terrible television news coverage, Miss California is more important than our future, we the people are hidden again from the truth. Every President and Congress has and will continue to hide and lie their agendas, because we the people are too dumb to stand up for our Constitution and what are forefathers fought for.
I am sick and tired of politicians making the job of representing the people a job for their own personal lively hood and for their own pocket. For example, thank you to Al Gore and the Democrats from California and the Northeast who continue to pound that Global warming is causing the Earth to be such a bad place. It is amazing how Al Gore went from net worth of $1 million in 2001 to $100 million in 2009, oh wait thank you for the cap and trade bill (Democrats).
Do not get me wrong the Republicans are a part of this mess too as they have their own agendas and own pockets to fill. When will we get back to the good old days when politicians represented what the MAJORITY wanted not the MINORITY. What I mean is by the numbers not by race, sex or religion. Remember we the people are the government and we must take it back from these greedy people who think they live a life like most of us and don't.
Climate Is a Moral issueby Paul Driessen
Issue 134 - June 24, 2009
http://www.acuf.org/issues/issue134/090621cul.asp
The climate “crisis” is a “moral issue that requires serious debate,” Al Gore proclaimed in an April 27 AlGore.com blog post.
His conversion to the Anglo-American tradition of robust debate came a mere three days after the ex-VP refused to participate in a congressional hearing with Lord Christopher Monckton, former science advisor to Prime Minister Margaret Thatcher. Republicans had invited Monckton to counter Gore’s testimony before the House Energy and Commerce Committee.
But Gore froze like a terrified deer in headlights, and Chairman Henry Waxman told the UK climate expert he was uninvited.
Their hypocritical cowardice simply reflects a recognition that their entire energy rationing crusade would collapse if they ever allowed real debate. Monckton would have focused on the science. But it is morality that truly requires serious debate. Climate Armageddon claims are being used to justify malignant policies that have no rational basis.
Global average temperatures peaked in 1998 and since have cooled slightly, despite steadily rising CO2 levels. Except in its Western Peninsula, Antarctica is gaining ice, and Antarctic sea ice reached an all-time high in 2007. Arctic ice is seasonably normal, and in 2008 the Northern Hemisphere was covered by more snow than ever before recorded.
Scientists are hard-pressed to point to long-term state or country climate trends that differ from historic experience and can reasonably be linked to anthropogenic warming crises. Merely asserting that obesity causes warming or increased malaria and house cat populations are due to warming does not make it so.
Even more devastating to alarmist claims, long-held assumptions about the deep Atlantic counter-current or “conveyor belt” below the Gulf Stream have been undermined by recent studies. Those assumptions underlie many climate models and their scary worst-case scenarios about alleged planetary crises. The models and GIGO scenarios are now even more questionable.
Yet, model results are constantly portrayed as “evidence” – “proof” that immediate, drastic action is required to avert disaster. Nonsense. Climate changes and their causes are complex, our knowledge is still limited, and the inputs and assumptions are deficient.
Climate models are no more reliable than computer predictions of future Super Bowl winners and scores.
Their Frankenstein scenarios are no more valid as a basis for law and policy than the special effects in The Day After Tomorrow or JurassicPark.
Worse, even the 942-page Waxman-Markey climate bill’s absurd target – a 17% reduction in US carbon dioxide emissions by 2020 and 83% by 2050 – would have no detectable benefits, even if CO2 does cause climate change. Research climatologist Paul “Chip” Knappenberger calculates that even these draconian measures would result in global temperatures rising a mere 0.1 degrees F less by 2050 than doing nothing, mostly because Chinese and Indian emissions would quickly dwarf America’s job-killing reductions.
Meanwhile, China and South Africa want developed nations to slash carbon emissions 40% by 2020 – and give poor countries $200 billion annually, to help them cope with global warming’s imagined disasters. Bolivia wants $700 billion a year. Our children will get the bill for that, too.
None of this apparently matters to congressional leaders, Climate Action Partnership members or other professional alarmists and rent seekers. If anything, it has spurred them into even hastier action, to transform America’s energy and economic system, regardless of the consequences. Waxman-Markey was approved by the E&C Committee May 21 on a mostly party-line vote.
Above all, they want to replace vile hydrocarbons with wind power. That would require $$$ billions in taxpayer subsidies; hundreds of thousands of turbines, across millions of acres of scenic land, habitats and sea lanes; thousands of miles of new transmission lines and towers; and billions of tons of concrete, steel, copper and fiberglass – plus raw materials and natural gas for backup generators.
Spain’s experience should be cautionary, but probably won’t be. According to a study by Dr. Gabriel Calzada, Spanish taxpayers spent $754,000 for each new job in the wind turbine industry (mostly installing towering turbines) – and destroyed 2.2 regular jobs for each “green” job, primarily because pricey “renewable” electricity forced companies to lay off workers, to stay in business.
A recent Lauer Johnson Research poll found 78% of respondents saying even a $600 per year increase in utility bills would be a “hardship.” They should be so lucky.
Compared to no cap-and-tax regime, Waxman-Markey would cost the United States a cumulative $9.6 trillion in real GDP losses by 2035, according to an updated study by the Heritage Foundation’s Center for Data Analysis. The bill would also cost an additional 1.1 million jobs each year, raise electricity rates 90% after adjusting for inflation, cause a 74% hike in inflation-adjusted gasoline prices, and add $1,500 to the average family’s annual energy bill, says Heritage.
The Congressional Budget Office says the poorest one-fifth of families could see annual energy costs rise $700 – while high income families could see their costs rise $2,200 a year. Harvard economist Martin Feldstein estimates that the average person could pay an extra $1,500 per year for energy. MIT says household energy costs could climb $3,000 per year.
Where will families find that extra cash? “What do I tell a single mom, making $8 an hour?” asked North Carolina congressman (and Congressional Black Caucus member) G. K. Butterfield.
That was a few days before he and his Democrat colleagues voted against amendments to Waxman-Markey that would have suspended the punitive law if electricity prices go up more than 10% after inflation, unemployment reaches 15% or gasoline prices hit $5. What will he tell that single mom?
Eco-activists gleefully predict that oil, gas and coal companies, utilities, vehicles and investors are destined for extinction. No wonder lobbyists have descended on Washington – over 2,300 of them just on climate change: 4.4 per member of Congress.
Some are getting $400-$850 an hour for their skill in promoting mandates, subsidies, legal measures to hobble competitors, and cap-tax-and-trade versions of the mortgage derivatives market. Al Gore alone boasts of having received $300 million (from unnamed sources) to trumpet alarmism and draconian legislation.
Colleges, scientists, activists, unions and companies receive billions in taxpayer money, to hype climate chaos claims, intimidate skeptics and lobby Congress. African bureaucrats get millions from the UN (and thus US taxpayers) to hype climate disaster claims that keep millions of Africans impoverished and deprived of the life-enhancing benefits of reliable, affordable electricity.
President Obama says the Bush Administration “made decisions based upon fear, rather than foresight, and all too often trimmed facts and evidence to fit ideological predispositions.” He and his Democrat allies in Congress should take that critique to heart on global warming.
Green Trade War by Dennis Avery
Issue 134 - June 24, 2009
http://www.acuf.org/issues/issue134/090621cul.asp
The global warming trade war has started—quietly, but just as surely as we knew it would. The Obama Administration is now subsidizing U.S. milk and cheese exports in a way that will punish New Zealand—which depends on its efficient grass-fed dairy exports for close to one-third of its total income. The reason? U.S. corn ethanol mandates have pushed American feed grain prices so high that the Administration felt it had to “give something” to U.S. dairy farmers.
Unfortunately, the dairy export subsidies will make little difference to American dairymen, but they could have harsh impacts on New Zealand’s farm-dominated economy. Thus far, New Zealand has escaped the higher grain prices because they feed their cows mainly grass and turnips.
Our excuse on dairy export subsidies is that the EU did it first. But the real dairy problem is that both the EU and the U.S. have jacked up their own dairy production costs by diverting corn and rapeseed from feeding livestock to making biofuels. The ethanol and biodiesel games have doubled world feed grain prices and caused food riots in Mexico and Egypt.
The dairy export payments should be a huge red flag to the world. When push came to shove, the U.S. and the EU immediately fell into the old trap of punishing trade from innocent countries. That’s actually how we launched the Great Depression—with the infamous Smoot-Hawley tariffs of 1930.
People have actually been predicting the “green trade wars” for years because developing countries have no obligations under the Kyoto Protocol. All the affluent countries are thus terrified that their carbon-emitting industries will flee to less-developed countries. Energy Secretary Stephen Chu told a Congressional committee in March that America might well consider a “carbon tariff” on imports from China, India, and other developing countries if they “undercut” U.S. manufacturers.
Gary Huffbauer of the Peterson Institute for International Economics recently told National Public Radio, “Countries say, well, if we’re going to take measures [to combat global warming] we have to do something at the border to prevent the same product being produced abroad and just imported by our country. So those thoughts trigger potential for trade wars. So lawmakers here have added a provision to the greenhouse gas legislation that echoes the EU approach. It gives energy intensive companies like steelmakers, chemical plants, and paper mills the right to demand tariffs on imports if after five years they can prove unfair carbon competition.”
Environmentalists say the worries about China and India picking up high-carbon jobs are exaggerated—that most of America’s energy-intensive imports come from Canada or the EU. But they’re saying that today, before the carbon taxes have been imposed. With carbon taxes in place, the developing countries will look more attractive, Canada and the EU less so.
Without low-cost imports from China and Colombia, meanwhile, the cost of shopping at Wal-Mart will escalate—even as U.S. exports are increasingly barred from both Kyoto member and non-member countries. Our investments in productive assets will be wasted, even as the U.S. jobs totals decline.
A carbon tariff would conflict with a U.S. pledge not to violate international trade rules, but Obama’s promise to cut greenhouse emission might easily override the vague “no trade war” commitment.