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Public Statements

Issue Position: Cap & Trade

Issue Position

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Why "Cap and Trade' is wrong for the U.S. and guidelines for reform

Summary

The desire for clean air, clean water and a safe environment are important goals shared by everyone. I support responsible environmental legislation that protects the environment, while also protecting the rights of individuals and businesses. HR 2454, the American Clean Energy and Security Act of 2009, does not achieve a balance between protecting the environment and protecting our constitutional rights. The potential benefits of the bill are questionable and, if they exist, negligible at best. The harm done to the economy, via lost jobs, lost economic output, increased costs to the consumer are significant.

Background

The production of energy is not only integral to the growth of an economy and a nation, but inseparable from that progress. Energy has and always will be directly correlated to the increasing standard of living of a nation. Production of energy, however, comes as at a cost to the environment. In almost all faith traditions, God has provided mankind with dominion over that environment and entrusted a duty of stewardship to us all. Therefore, while it is necessary to use our natural resources to grow the economy and increase the standard of living for all citizens, it is imperative that we do so responsibly. Alleviating poverty and expanding economic opportunity are absolutely necessary, yet each must be done in a manner that preserves those same natural resources for future generations.

The current legislation gives little, if any, consideration to the economic needs of the nation. It begins with an unproven assumption that there exists a link between the mandates in the legislation and the supposed positive impact to the environment. Neither the assumed link nor the supposed benefits are objectively verifiable.

Additionally, the Act incorrectly uses the success of the "United States Acid Rain Program" as proof the current legislation will succeed in correcting the assumed problem. The Act furthermore inaccurately claims to employ a method of "Cap and Trade," when, in fact, the method used in the Act or more analogous to a "Cap, Tax, and Auction" method. The latter method violates basic principles of free market economics and will stunt, if not reverse, economic growth.

Cap and Trade Clarified

Cap and Trade (C&T) is rooted in the concept of emissions trading. This is a mechanism whereby economic incentives are established by government entities as a means to encourage companies to reduce their production of pollution generating emissions. Once emission levels are established, firms who successfully reduce emissions below target levels have the option to sell their "credits" to firms who have not yet reached the target emission levels. Where objectively harmful emissions can be identified and feasible cleaning solutions exist, this system has proven effective in reducing harmful emissions.

HR 2454 purports to establish a C&T market, when in fact, it does not. The C&T scheme contained in the Act is actually a system of taxes designed to punish firms that produce government defined excess emissions. The scheme does not factor in the legitimacy of the harmful impact of emissions, does not consider the reality of the emission levels, ignores the lack of feasible cleaning technology and replaces free market incentives with government taxes and penalties.

Guidelines for Meaningful Environmental Reform

While numerous analogies are drawn between the success of the "United States Acid Rain Program" and the Cap and Trade provisions contained in HR 2454, there actually exists very little similarity. The key elements that led to the success of the acid rain program do not exist in the current situation. Without these features, the proposed legislation will create significant economic hardship, while creating little, if any, environmental benefit.

Environmental Policy Must Be Based on Scientific Fact

The problem of acid rain was objectively observed in the harm to streams, lakes, wildlife, foliage and even manmade structures. The link between manmade carbon emissions and measureable harm to the environment is a topic currently under debate. While there may exist a link, the current debate continues. Recent discoveries of manipulated temperature data as well as the February 26, 2010 United Nations announcement that it will revisit the climate change data and data gathering techniques, indicates sufficient unknown factors exist so as to preclude the creation of harmful economic policies. The citizens of our nation should not be required to undergo economic hardship when the benefit, if any exists, is questionable.

Only Proven Technology Can be Mandated

Technology existed to repair the factors that caused acid rain, excessive sulfur and nitrogen emissions from power plans. The solution, flue gas desulfurization (FGD) or wet scrubbers, was known and available. It was also economically feasible to implement. Subtitle H of HR 2454 mandates the use of technology that does not exist. By its own admission, the Act indicates that technology does not currently exist to reach the targets mandated by the Act. Even if all other assumptions in the Act were valid, it is unreasonable to mandate the use of something that does not exist.

Environmental Concerns Should Employ Free Market Principles: No new Taxes

HR 2454 requires the government auction off emission credits to the public. Companies will be required to purchase these credits in order to continue operations. The Congressional Budget Office (CBO) estimates these auctions will generate $873 billion in government receipts over ten years. Firms will obviously pass along these costs to the consumer. A detailed analysis by the Heritage Foundation places the annual cost to a family of four at $1,870 initially, growing to $6,800. Citizens should not be required to bear these costs, especially in light of the large number of uncertainties surrounding the legislation.

Only Realistic Reduction Targets May Be Used

The Act mandates reductions in carbon emissions starting in 2012. These reductions continue and mandate an 83% overall reduction by 2050 over 2005 levels. Almost 75% must come in the first ten years. Such a mandate is unrealistic and ignores the reality of economic growth. Combined with the other problems with this bill, it is unreasonable to support the extreme measures contained in this bill.

The EPA Must Be Accountable to the Public and Work with Businesses

Many public utilities and other firms have been pressured into accepting some version of the Cap and Trade legislation in order to avoid much more onerous regulation by the Environmental Protection Agency. Under the Obama administration, the EPA has become a highly ideological entity. This has prevented meaningful dialogue and increased the polarizing tone in Washington. The EPA must refrain from imposing punitive measures as a means to force cooperation of businesses. A complete review of the EPA and its charter must be conducted by congress immediately.

Environmental policy must be grounded in sound science, economic realities and discussed in a spirit of mutual respect. I am committed to ensuring the environment is protected and the economy is strong. There is every reason to believe both goals can be accomplished.


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