Monthly Archives: March 2009

Code for Killing Jobs

Claim

“‘Cap-and-trade’ is code for increasing taxes, killing American jobs and raising energy costs for consumers.”

– Rep. John Boehner (R-OH), House Minority Leader, March 9, 2009

Truth

Opponents of global warming action certainly have their sound bites down.

For style and efficiency, Rep. Boehner gets an A (in 17 words, he certainly makes his point). For truth-telling, he gets a big fat F.

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FreedomWorks' Bogus 10

FreedomWorks, a conservative inside-the-Beltway grassroots organization run by former House Majority Leader Dick Army (R-TX), recently released its Top 10 Reasons to Oppose Cap and Trade.

Their unsound arguments are standard fare for the climate skeptic cognoscenti. They rely on studies from hyper-conservative organizations with a history of catering to industry, while omitting more widely accepted studies, such as those from the Environmental Protection Agency and the Massachusetts Institute of Technology.

It’s also clear from their list that they don’t have a specific problem with a proposal to cap global warming pollution, but rather with climate action in general—suggesting that they believe nothing should be done to address this crisis.

We respond to each of their arguments after the jump.

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Economic crisis to stall climate change

Claim:

“This [economic] crisis puts the nail in the coffin for climate change.”

Bill Kovacs, vice president of the U.S. Chamber of Commerce’s division for environmental and regulatory affairs, October 17, 2008.

Truth:

Economic studies suggest not only that capping America’s global warming pollution would result in negligible new economic costs, but also that not acting would result in a huge economic burden on our economy.

Solving global warming and reinventing America’s energy infrastructure isn’t going to be free. It is likely that under a cap, energy prices will go up for some Americans in the short term.

Depending on how the policy is designed, though, these increases are relatively modest and can be offset by changes in energy consumption and through subsidies generated through the cap program to reduce the impact of additional energy costs.

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Green job numbers are overstated

Claim:

“The number of new green jobs from a climate regime are overstated compared to the number of manufacturing jobs lost, and we know from the National Association of Manufacturers how many jobs would have been lost with any of these schemes in the past”

Senator James Inhofe (R-OK) from his January 8, 2009 statement on the floor of the Senate.

Truth:

This statement is based on a 2008 study of the Lieberman-Warner bill by the National Association of Manufacturers (NAM) and American Council for Capital Formation (ACCF). This study relies on several misguided and unrealistic assumptions, some of which do not even reflect the actual provisions in the bill.

A cap will concentrate new job creation and training in low carbon sectors. The net job impacts are likely to be minimal in either direction. While some sectors (e.g. coal mining) may contract in the near- to medium-term, other sectors will see job growth.

Because renewable energy and energy efficiency are relatively labor intensive, and depend on domestic supply chains, investments driven by climate legislation will be particularly good drivers of job creation in the near term.

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Fuel tax regressive, burden on the "poor"

Claim:

“The purpose of these [global warming] programs is to ration fossil-based energy by making it more expensive and therefore less appealing for public consumption. It is a regressive tax that imposes a greater burden relative to resources on the poor than it does on the rich.”

Senator James Inhofe (R-OK) from his January 8, 2009 statement on the floor of the Senate.

Truth:

The purpose of a climate bill that caps America’s global warming pollution is to reward innovation and unleash clean energy technologies to rebuild America and free ourselves from our dependence on fossil fuels.

A properly designed policy would not impose any new financial burdens on the poor and, instead, would provide tremendous economic benefits and put people to work building out our clean energy infrastructure.

The Congressional Budget Office estimates that by 2020 under a program that caps America’s global warming pollution, the value of auctioning pollution credits could total between $50 billion and $300 billion (in 2007 dollars) in new revenue to the federal government.

According to the Center on Budget and Policy Priorities (CBPP), “Funding equal to about 15% of the value of the emissions allowances under a ‘cap-and-trade’ system would be enough to hold the poorest fifth of households harmless and partially offset the costs for those with modestly higher incomes.”

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Climate action imposes upon social welfare

Claim:

“Even under the most optimistic assumptions, every study we examined predicts huge welfare costs in terms of consumption. A lower estimate involves a drop in consumption of 0.8%-1% below the business-as-usual scenario in every year starting in 2008 and going into the future, which represents a huge decrease in social welfare.”

– From The Cost of Climate Regulation for American Households, a report published by the George C. Marshall Institute, March 2, 2009

Truth:

This report claims to be a meta-analysis review of several studies on the economic impact of the Lieberman Warner Climate Security Act from last year’s Congress.

The studies covered in the Marshall Institute report include those from:

  • The Massachusetts Institute of Technology
  • The Environmental Protection Agency
  • The Environmental Investigation Agency
  • The American Council for Capital Formation and the National Association of Manufacturers (joint study)
  • The Charles River Associates
  • The Heritage Foundation’s Center for Data Analysis
  • The Clean Air Task Force

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