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Saturday, June 27, 2009

A shocking tally from the AP regarding the "winners and losers in the climate bill." I don't really see any winners from their analysis, other than possibly a few select utilities that worked hand in hand with Congress to craft provisions that don't hurt them too bad. Consumers will just have all the costs passed on to them, with higher fuel prices, higher food costs, higher energy costs and higher costs for any item that requires manufacturing and/or transportation:

Anyone who pays an electric bill would likely feel the impact of climate legislation. Utilities will try to raise rates as they invest in cleaner-yet-more-expensive energy sources. Some have already announced plans to do so. Petroleum companies also may try to import more of their refined gas and heating oil from countries with no carbon law, which will raise costs.

The nonpartisan Congressional Budget Office and the Environmental Protection Agency both issued estimates of how the climate bill would affect energy costs.

The CBO estimated the cost at $175 a year for the average household. The EPA forecasts $80 to $110 a year.

The American Petroleum Institute disputed both estimates, saying the bill could cost the average household up to $3,300 by 2020.

"That is more than a few postage stamps," API President Jack Gerard said in a slap at Rep. Edward Markey, D-Mass. Markey has compared new energy costs to a postage stamp per day.

The WSJ does a nice job of demonstrating the sheer ridiculousness of the CBO estimates here:

The biggest doozy in the CBO analysis was its extraordinary decision to look only at the day-to-day costs of operating a trading program, rather than the wider consequences energy restriction would have on the economy. The CBO acknowledges this in a footnote: "The resource cost does not indicate the potential decrease in gross domestic product (GDP) that could result from the cap."

The hit to GDP is the real threat in this bill. The whole point of cap and trade is to hike the price of electricity and gas so that Americans will use less. These higher prices will show up not just in electricity bills or at the gas station but in every manufactured good, from food to cars. Consumers will cut back on spending, which in turn will cut back on production, which results in fewer jobs created or higher unemployment. Some companies will instead move their operations overseas, with the same result.

These costs will be borne disproportionally by lower income earners, and these costs constitute a large portion of their total expenditures. All for a system that has not achieved any significant reductions wherever it has been implemented, (for example the UK), and has even been rescinded due to the burdens imposed on everyday people and businesses (in Australia and New Zealand). And who is getting the helping hand from Congress? Not the poor, that is for certain. Instead, multi-billion dollar utilities are getting the breaks. So that they can pass their cost increases on to consumers.

This issue isn't even about science anymore, it is about advocacy. You have the EPA suppressing their own studies that don't fully support their political objectives. Many of the scientists behind the UN climate change study have noted that their work was misrepresented. The world temperature has fallen for two straight years, so it was imperative for Democrats to ram this legislation through before the consensus against it grew too large. Hopefully the Senate will be able to put the brakes on what will otherwise be the largest tax increase in American history.

All this for a feel good solution that hasn't worked anywhere it has been tried. And to directly financially benefit major players in the new carbon offset industry like Al Gore and Nancy Pelosi, who each stand to make millions. Meanwhile, businesses that will suffer the most under this tax scheme, notably refiners, will simply shift production offshore, where they can pollute even more under looser environmental regulations abroad, while raising their cost to consumers of petroleum products here. All this matches the long term goals of Obama and the Democrats, which is to drastically raise the price of gasoline so consumers are forced to buy the new high mpg cars that GM and Chrysler will be forced to produce. This is what America gets when they give a blank check to socialist Democrats like Obama and Pelosi. Hopefully when our economy still sucks in 2010 and 2012 they will realize the error of their ways. Still, that is a long way off... The Republicans would do well to demonstrate that they are turning into the real advocates for the lower classes in this country.

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