Cap-and-Trade will Cost Us Money Twice

Until recently, much of the debate on climate change focused on the extent of the threat. But now that House Democratic leaders are planning to take up legislation to set up a mandatory cap-and-trade system for greenhouse emissions sometime this summer, opponents are focusing on the cost.

"They seem to give people the impression that it's going to be a huge environmentally friendly free lunch," said Rep. James Sensenbrenner, R-Wis. "This lunch is not free."

Under cap-and-trade, the government would establish a market for carbon dioxide by selling credits to companies that emit greenhouse gases. The companies then can invest in technologies to reduce emissions to reach a certain target or buy credits from other companies that already have met their emission reduction goals.

Most agree that the proposal by Rep. Henry Waxman, D-Calif., will have a sweeping impact by taxing carbon emissions in hopes of cutting them to 80 percent of their 2005 levels by 2020 and bringing them down to 20 percent of those levels by 2050.

President Obama's recently released budget banks on raising $646 billion in revenues from 2012 to 2019 from auctioning emission credits to companies. The money would fund renewable energy projects and provide a tax credit to help families cope with higher energy prices.

Republicans call it "cap-and-tax" and wonder why Waxman didn't talk about the cost.

"This is 'I got a secret' and I think there's a reason for that," Sensenbrenner said. "And that reason is it's going to cost the American consumer a lot of money."

Even one member of the Democratic leadership says it would be better to just lay it on the line, that the Waxman proposal is a tax on energy consumption.

"My own personal opinion is you ought to just level with the American people and indicate to them that this is what's going on," said Rep. John Larson, D-Conn. "This is what the sacrifice is going to be required."

Centrist Democrat Rick Boucher says Congress has to act but carefully.

"We do not want to dislocate any part of our economy and we don't want significant increases in electricity prices for our consumers," Rep. Boucher said.

But if Congress decides to impose a tax on emissions, coal would be hit the hardest and it provides 50 percent of the nation's electricity, raising the question of how it can be taxed without increasing utility rates

House Speaker Nancy Pelosi, who calls this a flagship issue for her, seemed to raise doubts about the implications even as she praised the Waxman proposal. - FOX News Story

I don't know what they think. If you make the Energy producers pay more to produce their product they are going to pass that cost along to the consumer. That is the nature of running a business. That is good business, you have to have a good return on investment.

Washington wants to dramatically raise the taxes on Energy, we pay the difference. I guess that is one way to raise our taxes without raising our taxes.