The Fiction Of Cap And Trade: Green Threat To American Prosperity And Security


By William Hawkins | August 3, 2009


Reps. Waxman, Hoyer, Clyburn, Pelosi, Markey and Larson

The Congressional battle over health care has driven most other pending legislation off the front pages, but that doesn’t mean critical issues are not still out there. Roll Call is the Capitol Hill newspaper known for its “inside baseball” coverage of the political arena. It reported July 21, “Climate change is the ticking political time bomb on the Senate’s agenda this fall, and Majority Leader Harry Reid (D-NV) has the timer set to go off in late September.”

The House of Representatives passed H.R. 2454, the Waxman-Markey American Clean Energy and Security Act of 2009, also known as the Cap and Trade bill, by the narrow margin of 219-212, on June 26. The legislation includes the Safe Climate Act setting greenhouse gas emission reduction targets. For the uninitiated, greenhouse gases include water vapor, carbon dioxide, methane, nitrous oxide and ozone. These greenhouse targets would be reduced from: 2005 levels of 3% by 2012; 20% by 2020; 42% by 2030 and 83% by 2050. How such massive reductions in the by-products of an advanced, industrial economy that requires increasing supplies of energy to maintain the living standards of a growing population is left unexplained and unaddressed by the bill. Instead, it is merely hoped that so-called alternative “clean” energy sources, such as wind, geothermal, hydro, biomass, and solar, will be developed over the next four decades on a scale that can replace oil, natural gas and coal at comparable costs.

The bill requires utilities to produce 15% of electricity from “renewable” sources by 2020. The voice of ideology is heard in the bill’s exclusion of nuclear power from the list of acceptable alternative energy sources, even though it is exactly the kind of carbon clean, high volume producer that would be needed if the real aim is to promote economic growth within “Green” parameters.

The targets of the legislation are not just large-scale enterprises and utilities. The bill states, “Each increment of emission, when combined with other emissions, causes or contributes materially to the acceleration and extent of global warming and its adverse effects for the lifetime of such gas in the atmosphere. Accordingly, controlling emissions in small as well as large amounts is essential to prevent, slow the pace of, reduce the threats from, and mitigate global warming and its adverse effects.” Thus small business firms, family farms, and even individual households will be subject to tight environmental monitoring and government control.

The rationale for such intrusions into the economic life of our nation is the finding contained in the bill asserting that “Global warming poses a significant threat to the national security, economy, public health and welfare, and environment of the United States, as well as of other nations.” Asserting it “is the result of the combined anthropogenic greenhouse gas emissions from numerous sources of all types and sizes,” the bill lists the following extraordinary damages resulting from global warming:

(A) adverse health effects such as disease and loss of life;
(B) displacement of human populations;
(C) damage to property and other interests related to ocean levels, acidification, and ice changes;
(D) severe weather and seasonal changes;
(E) disruption, costs, and losses to business, trade, employment, farms, subsistence, aesthetic enjoyment of the environment, recreation, culture, and tourism;
(F) damage to plants, forests, lands, and waters;
(G) harm to wildlife and habitat;
(H) scarcity of water and the decreased abundance of other natural resources;
(I) worsening of tropospheric air pollution;
(J) substantial threats of similar damage; and
(K) other harm.

There is no attempt to assess or balance the costs in (C) and (E) listed above against the significant adverse impact on the economy of the taxes, regulations and price hikes mandated by the legislation. Even if one believes in global warming—and many experts in the United States and around the world do not—the cure may do more damage than the perceived problem.

Under a Cap-and-Trade system, the Federal government sets a cap on the total amount of carbon that can be emitted nationally. Companies then buy or sell permits to emit CO2. The cap gets cranked down over time to reduce total carbon emissions. The fiction is that this is a market-based system compatible with capitalism; but in reality, it is an artificial creation of scarcity by government edict that sends producers into a struggle to comply, pushing up costs.

Research at the Heritage Foundation finds, “Should it become law, Waxman-Markey will reverberate throughout the economy, costing the nation an average of $393 billion annually and over a million jobs from 2012 to 2035.” The average household would see its energy bill go up by $829 per year beyond the normal market fluctuations. But that is only the surface effect, “Higher direct energy costs are only part of the total household burden: Since nearly all other goods, from food to furniture, require energy to produce and transport, their costs will rise along with the price of energy,” writes Ben Lieberman, a Senior Policy Analyst in Energy and the Environment at the conservative think tank. “The Heritage Foundation calculates that, by 2035, America would be $9.4 trillion poorer with Waxman-Markey than without it,” he concludes.

H. R. 2454 uses the term “anthropogenic” which Merriam-Webster defines as “of, relating to, or resulting from the influence of human beings on nature.” One can argue that everything mankind has done since coming out of the caves has been to influence nature so as to create what is called civilization. It would be surprising, indeed appalling, if suddenly the work and achievements of centuries in building the modern world were to be cast down as more dangerous to general health and well-being than the poverty, disease, and short life-spans that characterized pre-industrial society.

There are people in the Obama administration who think American society has advanced too far. Former Harvard Professor John P. Holdren, director of the White House Office of Science and Technology Policy is Obama’s science czar and a point man on climate change. He has argued in the past for the “de-development” of the United States, believing the country is “over developed.” In the 1973 book Ecoscience co-authored with Paul and Anne Ehrlich, he wrote, “The need for de-development presents our economists with a major challenge. They must design a stable, low-consumption economy in which there is a much more equitable distribution of wealth than in the present one.” These three radical environmentalists argued, “The most critical change of all must be a change in goals; all people, rich and poor alike, must come to recognize that being a citizen of a giant, smoggy, freeway-strangled industrial state is not necessary to being a happy, healthy, fulfilled human being.” This is a concise statement of the core Green worldview.

According to a profile of Holdren’s work done by the Competitive Enterprise Institute in 2008, “In a 1995 paper that explains his model for ‘sustainable’ development, Holdren noted that ‘humans are included as just one species and are not treated specially.’ In his model, biosphere ‘damage’ is directly proportional to economic growth.” It follows, then, that growth must be halted or reversed to save the biosphere.

Fortunately, the Green delusion is not as dominant as its proponents claim. The increasing shrillness of the Green movement and its attempts to declare the debate over, so as to stifle critics, are signs of an ideology that knows it is in trouble and cannot stand the light of examination. Sen. James Inhofe (R-OK), the ranking member of the Senate Environment and Public Works Committee, has issued a 255 page GOP Senate Minority Report, available on his official website, listing over 700 leading scientists from around the world who dissent from the man-made (anthropogenic) global warming claims made by the United Nations Intergovernmental Panel. The work of the UNIP is cited as justification in H.R. 2454. Inhofe’s report details the flaws in the Green case against civilization with excellent links to studies that contradict every assertion made in the House legislation.

Opponents of the Green movement have been subjected to attacks by those who know they cannot stand an open debate. Dr. William M. Briggs, a climate statistician who serves on the American Meteorological Society’s Probability and Statistics Committee, describes on behalf of colleagues, “absolute horror stories of what happened to them when they tried getting papers published that explored non-‘consensus’ views” against the man-made climate change sophistry. Ivor Giaever, who won the Nobel Prize for Physics, is quoted as saying, “I am a skeptic…Global warming has become a new religion.” It is not, of course, a true religion, but an ideology that uses an “end of the world” threat to scare people into doing what decades of Green propaganda could not persuade people to do, that is, to abandon modern civilization.

If H.R. 2454 fails in the Senate, it will be because even some Democrats are not persuaded by Green arguments and pressure. There are perhaps a dozen moderate Democrats, from mainly northern and western States, who are reluctant to support the House bill because it is unpopular back home. Senators like Byron Dorgan and Kent Conrad, both of North Dakota, and Robert Byrd of coal-rich West Virginia will be key players. Sen. Barbara Boxer (D-CA), chair of the Senate Environment and Public Works Committee, will have to reach out to the handful of Republicans, like Sen. John McCain (R-AZ), who believe in global warming to get the 60 votes needed to break a filibuster and pass the bill.

But more important than the debate among scientists, activists, and politicians in the United States (and Europe) is the rejection of the Green movement in the rest of the world. The phony requirement to reduce carbon emissions to “save the planet” has created a real division between the developed and developing world. The latter group, which represents the majority of the human race, does not want to be prevented from attaining decent living standards. The confrontation is most apparent at the United Nations, the very organization that is supposedly leading the world to a Green future.

The UN Framework Convention on Climate Change (UNFCCC) will meet in December at Copenhagen to draft a post-Kyoto Protocol treaty. The “roadmap” to this treaty was set at Bali, Indonesia in 2007. While developed lands like the United States are to have “quantified emission limitation and reduction objectives,” the developing states are allowed to temper any such actions within “the context of sustainable development, supported and enabled by technology, financing and capacity-building.” The double standard allows India, China, and other developing nations to provide safe havens for high emission industries, both domestic and those “outsourced” from developed countries, which enact suicidal Green regulations.

At the recent G-8 summit in L’Aquila, Italy, Western liberals made a vain attempt to appease the developing nations within the principle of “differentiated responsibilities and respective capabilities.” The G-8 pledged to cut their emissions by 80 percent to reach the 50 percent global reduction goal set at the 2008 G-8 meeting. This means the underdeveloped countries could make cuts well below the average. Yet, the developing nations continued to reject mandated limits on their growth. The Kyoto Protocol did not require them to cut back, and they do not want the Copenhagen agreement to impose any limits on them either; only on the West. During the UNFCCC meeting in Bonn June 1-12, Chinese officials said that their country would actually be increasing its carbon emissions in future years as it continued to grow.

On July 8, Chinese State Councilor Dai Bingguo attended the “outreach session” of the G-8 on behalf of President Hu Jintao (who had gone home to deal with the Xinjiang riots). He spoke to the delegations from China, India, Mexico, Brazil and South Africa, known as the O-5. He demanded that the international community “respect the right of developing countries to independent economic development, take into full account the specific national conditions of developing countries, and ensure that developing countries enjoy necessary room for development policies.” In other words, they should not be constrained by Green regulations.

In direct reference to the UNFCCC and the Copenhagen conference, Dai urged continued adherence “to the principle of common but differentiated responsibilities.” He then called “on countries around the world to take active actions in accordance with the Bali Roadmap, and urge developed countries to make an explicit commitment to continuing taking the lead in emissions reductions and providing developing countries with measurable, reportable and verifiable support in technology, funding and capacity building.” This is nothing less than an explicit program for an international transfer of wealth. The developing countries do not accept the Green thesis, but they will exploit it to shift the balance of power in their favor. H.R. 2454 may claim that global warming poses a threat to national security, but here is the real threat.

Yet, in his opening speech to the U.S.-China Strategic and Economic Dialogue meeting in Washington July 27, President Barack Obama acted as if he had never heard what the Chinese (and others) have said. He called on the two countries to cooperate in planning “a clean, secure, and prosperous energy future.” Noting that the United States and China are “the two largest emitters of greenhouse gases in the world,” he said, “Let’s be frank: Neither of us profits from a growing dependence on foreign oil, nor can we spare our people from the ravages of climate change unless we cooperate. Common sense calls upon us to act in concert.” The president’s attempt to link Beijing’s fears about the security of oil shipments with global warming will not work. The first concern is about assured access to energy sources, the second is about restricting the use of energy sources. The Chinese favor the first, but will not accept the second—and neither should Americans.


William R. Hawkins, a former economics professor and Congressional staffer, is a consultant specializing in international economics and national security issues. He is a contributor to SFPPR News & Analysis.