Cap-and-Tax Will Cost Jobs, Hurt Economy, Won’t Help Environment

May 5, 2009

Cap-and-Tax Will Cost Jobs, Hurt Economy, Won’t Help Environment

Sensenbrenner: International, Intellectual Property Issues Also a Concern

Washington, D.C.,  - U.S. Rep. Jim Sensenbrenner, R-Wis., ranking Republican on the House Select Committee on Energy Independence and Global Warming, issued the following statement for today’s American Energy Solutions Group national energy summit:

“‘While Americans will be paying higher energy costs and watching U.S. jobs go overseas, it will be business as usual for countries like China and India.’

“These are my words from December, 1997, after I returned from leading the U.S. Congressional delegation that observed international climate negotiations in Kyoto, Japan. Those words ring as true today as they did a decade ago.

“The issues surrounding a cap on greenhouse gas emissions haven’t changed much since my quote from a decade ago. Many concerns about costs, competitiveness and fairness have gone unaddressed.

“What has changed is that despite these unaddressed concerns, Democratic leaders in Congress are moving forward with this carbon-trading scheme that I call cap-and-tax.

“I started calling this policy cap-and-tax when I became the ranking Republican on the House Select Committee on Energy Independence and Global Warming, but I see that even one senior Democratic leader is calling this policy what it truly is: a tax.

“The American people need to know that this policy is a nothing more than a national energy tax, and it’s my hope that organizations like the American Energy Solutions Group can help educate people about this tax.

“However, people also need to know that cap-and-tax will do little to improve the environment. Cap-and-tax hasn’t significantly reduced emissions in Europe, and if this policy doesn’t create emissions reductions, what’s the point?

“The projected costs of mandatory emissions reductions haven’t changed much in a decade either, except perhaps to grow larger. In 1998, studies by the Energy Information Administration showed that the Kyoto Treaty could result in a 66-cent per gallon jump in gasoline costs and household energy costs would rise by as much as $1,740 a year.

“A decade later, a study sponsored by Gov. Engler’s National Association of Manufacturers showed that last year’s cap-and-tax proposal in the Senate could cause gasoline prices to rise 141 percent and electricity rates to increase by 171 percent. The same study also foresaw a loss of 4 million jobs by 2030.

“And since Reps. Waxman and Markey haven’t announced all of the assumptions in their cap-and-tax bill, we can’t say for sure what the costs will be, but there’s every reason to believe this proposal will be just as expensive, if not more so.

“Look no further than yesterday’s Wall Street Journal story on the lobbying effort by several industries to have free carbon credits included in the bill. They know that without free credits, cap-and-tax will take a heavy toll on their business.

"I believe it will take a heavy toll on the country, too, and not just because of the higher taxes. If developing nations like China and India do not agree to mandatory cuts, there will be little reduction in global greenhouse gas emissions. A study by the Battelle Memorial Institute showed that if developing nations continued business-as-usual energy practices, by the end of the century they will account for more than two-thirds of carbon dioxide emissions.

“That means that any actions the U.S., Europe and other developed nations take to ultimately control greenhouse gas emissions is meaningless unless the developed world comes along.

“That’s why including China, India and other developing nations is one of the four principles I think any global warming bill must meet. I believe a sound global warming policy should also protect jobs and the economy, advance technological progress and produce actual, tangible improvements to the environment.

“Additionally, some developing countries are already asking for free technological support and relaxation of intellectual property restrictions on energy technology. Technology must be a vital component of any energy or environmental policy, but without strong intellectual property protections, there is little incentive to develop the innovative new technologies we desperately need right now.

“Unfortunately, cap-and-tax doesn’t meet these principles. If Republicans, Democrats and the President worked together on a global warming bill that protects the economy, improves the environment and advances technology, both the country and the planet would be better off.”

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Select Committee on Energy Independence and Global Warming - Republicans
H2-344 Ford House Office Building
Washington, D.C. 20515
Phone: (202) 225-0110 | Fax: (202) 225-0095

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