Cap-and-Trade Prospects Dwindle

The Waxman-Markey cap-and-trade scheme that narrowly passed the House has an uphill battle in the Senate. I think the bill's supporters in Congress and the administration had hopes of cramming the bill through the process before a United Nations climate summit in Copenhagen, Denmark. That appears less likely at this point.

With the health care debate dragging on longer than the administration would like, and with the level of opposition seen on that issue, a sweeping climate change bill may not be the best course of action. The level of cap-and-trade support among Senate Democrats appears lower than health care reform, and many groups are coming out with ads calling for Senators to oppose the bill. Check out this ad urging Senator Jon Tester to oppose the bill.

A recent study from the American Council of Capitol Formation showed how much Montana stands to lose with the passage of Waxman-Markey. Although Montana could see more in the alternative energy arena, the overall net effect is still very negative - especially in the jobs market. By 2030, Montana could see 4,964 fewer jobs as a result of cap-and-trade under a low cost estimate, and 6,761 under a higher estimate. Montanans would also be paying more for their energy. The study estimates that by 2030, gasoline will costs will increase by 21% to 27%, electricity will increase by up to 61%, and natural gas will increase by up to 78%.

Although some environmental groups claim Montanans support cap-and-trade (without any evidence), we have actually asked Montanans about the issue. In the last P-base poll of 800 Montana voters (3% margin of error), more than half of Montanans said they don't want to pay a cent more in energy costs to stop global warming. If we include that question again in this year's poll, I wouldn't be surprised if the number is higher since the economy is much worse than a year ago.

These are big price tags for a bill that would only reduce worldwide carbon emissions by a few percentage points over time. Montana has a lot to lose if this bill is passed. We hope Senators Baucus and Tester vote with Montanans on this issue and oppose the Waxman-Markey cap-and-trade scheme.

Comments

[Micah on behalf of the ACC]

In their efforts to reduce greenhouse gas emissions, legislators must be careful to limit the negative effects on business and employment. The American Chemistry Council (ACC), which represents the energy-intensive chemical industry, believes that a poorly-constructed climate bill has the potential to drive up demand for natural gas as utilities “fuel switch” from coal to natural gas. And, without sufficient emissions allowances for US manufacturers, US industrial production, jobs and greenhouse gas emissions would be transferred to more carbon-intensive nations. The unfortunate result would be a net increase in global GHG emissions, a less competitive US manufacturing sector and adverse impacts for the US economy and jobs. ACC is willing to work with legislators to help create a bill that implement clean energy solutions and reduce greenhouse gas emissions while strengthening the economy.