Treasury Releases Cap and Trade Cost Numbers via FIOA - Jay Syrene

Treasury Department Releases Documents Estimating Cap and Trade to Cost $100 - $200 Billion Annually:  The Benefits Must Still Remain Redacted
BrothersofLiberty.com
9/17/09
 By:
Jay
 Syrene

The Obama Administration released new documents about its cap and trade bill, thanks a Freedom of Information Act request by Competitive Enterprise Institute, a free-market think tank in Washington.

The Department of Treasury Documents (PDF), released September 16, 2009, reveal that the administration projects the cost of the Cap and Trade bill-H.R. 2454  (which already passed the House) to garner federal recipts between $100 and $200 billion per year.  In all likelyhood all of the money payed toward cap and trade will come back to the consumer, but at this point, it seems irresponsible to put an exact per person figure on the cost of the cap and trade bill as CBS news did when reporting it will cost 1,761 per household, the same number parroted by many other news sources;  CBS's claim that this amounts to a 15% increase in income tax also seems dubious.  The dubious nature of these figures makes them easily attacked.  It then turns the issue into an argument over the numbers as oposed to the real issue of the misleading nature of the administration when it comes to its cap and trade bill.  So, just sticking to the facts, $100 - $200 billion dolars paid to the American government from the US economy is an astronomical amount of money for a bill that purportedly would cost very little to  the American people.

Although it is no wonder why the Obama Administration would not make these costly projections public before the bill was voted on in the Senate, it does fly in the face of Obama's promise for an open and transparent government.  The fact that a Freedom of Information Act request was needed for the public to view these documents (the White House refused to release them) is proof enough that transparency in the Obama government is another campaign lie.  Unfortunately the veil of transparency gets murkier.  Many portions of the 10 page document are redacted, they are shown in the newly released documents as thick black lines.  So much for the White House's statement that "President Obama has committed to making his administration the most open and transparent in history." 

We at Brothers of Liberty couldn't divine what was behind the blacked out or redacted sections of the documents, but we did find this one interesting: "While such a program can yield environmental benefits that justify its costs, it will raise energy prices and raise annual costs on the order of (BLANK) dollars." Where (BLANK) is, the document shows what is likely a dozen or so words crossed-off in a heavy black line.  Not very forthcoming from the "most open and transparent" Administration in history, perhaps they should have used a highlighter instead of a thick black marker.

Another redacted section is most of the paragraph entitled "Key Challenges."  The last sentence of that section however seems like a gem: "Finally, domestic policy development must always be informed by and consistent with our international policy objectives." 

Opponents of a carbon tax, such as Brothers of Liberty, are quick to point out that a carbon tax, among its many pit falls, would drive businesses out of the US as it raises production costs for those who stay.  These companies would move to countries that not only have no carbon tax, but little emission regulations of any sort (like India or China for example).  This will in turn lead to a world-wide increase in pollution and and a net carbon gain.  The Treasury Department document offered these potential solutions:

"Potential measures to address competitive concerns include:
1) Loosening stringency of the overall climate policy
2) International harmonization of climate policies
3) Targeted exemptions of sub-sectors from policies
4) Free allocation of allowances (carbon tax rebates) to vulnerable sectors
5) Border carbon adjustments such as requiring importers to purchase allowances" 

Lets break down the above suggested measures which try to prevent what little industry we have left from leaving the United States after a cap and trade or carbon tax bill is passed:
1) Loosening stringency of the climate policy to a level that works for everybody: Sounds nice, but we won't loosen the stringency until we loose a substantial portion of this country's manufacturing base, we wouldn't know it was too stringent until it was too late. In addition the new mantra on cap and trade will be the costs outweigh the benefits.  Wouldn't this be admitting the cost are too great?  After all loosening the stringency would be equivalent to lowering the "benefits" along with the costs.
2) Implementing our economically harmful policies in struggling countries is very time consuming.  Many nations will not go along with it, but most probably will, provided we give them enough incentive (like payola).  In any case by the time we convince enough dictators to loot their countries much of our industry will have already gone.
3) We hand out exemptions: Well who gets these exemptions and will we hand out enough of them?  This seems like a politics favor game that government should never involve itself in.
4) Targeted exemptions:  Is essentially the same as 3) except it is under the guise of "vulnerable industries."
5) Requiring importers to pay a carbon tax is essentially a tariff.  Tariffs generally hurt the consumer as they drive up the prices of imported goods and stifle domestic competition.  At its inception the United States used tariffs wisely, mostly as a source of income (the government's #1 source of income until the Income Tax).  Tariffs can also be used to gain a competitive advantage for domestic manufacturers, however implementing a carbon tariff on the entire exporting world, when we at home produce very little, could prove to be extremely costly for the consumers and disastrous for the economy of the United States.  What kind of a financial burden would it create if every product from China suddenly cost 20% more.  Also countries usually reciprocate tariffs so what industry the US maintained would be left unable to compete in most of the world. 

If any of these 5 measures are ever implemented it will be in response to a loss in industry and will happen only after the US looses many industries and corporations in this ever globalized world.  We will not take actions to stop the loss on industry due to Cap and Trade until after there is an actual loss of industry due to a carbon tax (cap and trade) and by then it will likely be too late.  So in addition to the projected $100 - $200 billion a year the Treasury department admits this Cap and Trade bill (still awaiting a vote in the Senate) cost the American people it will also cost American jobs and American industry.

The Obama and future administrations will justify these immense costs with a cost/benefit scenario.  They will proclaim that the benefits of a carbon tax or a cap and trade out weigh the great monetary costs (without mentioning the economic ones).  It is assured that they do not.  Cap and trade or any carbon tax will be ruinous for the United States.  Let us not confuse pollution, over fishing, deforestation and other environmental issues with carbon emissions.  It is in the best interest of the United States and the world to reduce pollution and protect our eco-systems.  Taxing carbon has nothing to do with reducing pollution, controlling over fishing or preventing deforestation. 

Carbon is one of the most abundant elements on the planet.  Carbon is what we as humans exhale in the form of CO2.  According to the UN, humans account for only only about 1% of the carbon dioxide on Earth and a large portion of that is just from breathing.  The Ocean is by FAR the largest contributer of carbon into the atmosphere.  Volcanoes emit more carbon annually than do humans.  The Sun is the major driver of climate change.  In its history the Earth has seen many warm periods and many ice ages.  Today there is a great myth that humans are causing a catastrophic change in the Earths climate, this is driven by the hopes of a global carbon tax. 

Learn about all of the science behind global warming.  Contact your your Senator and tell them the the costs of H.R. 2454 do NOT out weigh the benefits.