"In his February 24, 2009 Joint Session address, President Obama called for a greenhouse gas cap-and-trade program, underscoring his commitment to domestic climate policy. While such a program can yield environmental benefits that justify its costs, it will raise energy prices and impose annual costs on the order of [REDACTION] dollars. At the same time, given the Administration's proposal to auction all emission allowances, a cap-and-trade program could generate federal receipts on the order of $100 to $200 billion annually."
So there you have it, from an internal Treasury Department document that cap-and-trade could generate federal receipts, i.e. tax revenue, in the range of $100 to $200 billion a year. McCullagh reports that at the upper end of that range,
cap-and-trade would cost every American household an extra $1,761 a year.
Does that cost sound familiar to you?
The Heritage Foundation has long predicted that:
"The annual cost of emissions permits to energy users will be at least $100 billion by 2012 and could exceed $390 billion by 2035."
This raises a whole other issue, that the $100 to $200 billion estimate by Treasury has no date or timeline of any kind. While Heritage follows the trajectory through to 2035, and even to 2050, the Treasury Department doesn't provide any further analysis or calculations.
In a different memo, prepared by President Obama's transition team after the election, they throw this out there:
"Economic costs will likely be on the order of 1% of GDP, making them equal in scale to all existing environmental regulation."
That's another prediction offered up without any details as to timeline or the effects of this scheme, not just on increased costs for families but on businesses and job losses.
These internal memos confirm what the Heritage Foundation, the
Brookings Institution and the
National Black Chamber of Commerce (NBCC) all
agree on -- that cap-and-trade will produce "significant losses in employment and gross domestic product."
According to Heritage:
"The Heritage Foundation's Center for Data Analysis found that, for the average year over the 2012-2035 timeline, job loss will be 1.1 million greater than the baseline assumptions. By 2035, there is a projected 2.5 million fewer jobs than without a cap-and-trade bill. The average GDP lost is $393 billion, hitting a high of $662 billion in 2035. From 2012 to 2035, the accumulated GDP lost is $9.4 trillion (in 2009 dollars). The average of the climate tax revenue--what the government gets to spend or give away--is $236 billion from 2012 through 2035 and adds up to $5.7 trillion in tax collections."
Brookings concluded:
"The Brookings analysis of the Waxman-Markey bill finds loss in personal consumption of $1-2 trillion in present value. The more stringent carbon targets in subsequent years produce even higher costs. Brookings projects that an additional 8 percent cut in carbon dioxide emissions increases costs 45 percent. GDP in the United States would be lower by 2.5 percent in 2050, and unemployment would be 0.5 percent higher (1.7 million fewer jobs) in the first decade below the baseline or without cap and trade. The total allowance revenue (tax revenue) generated by 2050 would be $9 trillion."
And, the NBCC predicted:
"The National Black Chamber of Commerce found the following adverse effects from Waxman-Markey: In 2015, GDP would be 1 percent ($170 billon) below the "no cap-and-trade bill" baseline. In 2030, GDP will be 1.3 percent ($350 billon) below the baseline, and by 2050 the study projects a reduction in GDP of 1.5 percent ($730 billion). The study also projects higher unemployment of 2.3-2.7 million jobs in each year of the policy through 2030--after accounting for "green job" creation."
Treasury's $100 to $200 billion a year estimate is a private admission that Heritage, Brookings and the NBCC have it right. But, the figure stops shorts of examining the widespread effects this huge tax scheme will have as it raises costs for consumers and simultaneously forces businesses to cut jobs.
"In particular, the Heritage analysis projects that by 2035 the economic impacts (in constant 2009 dollars) of this bill are:
- Gasoline prices will rise 58 percent (or $1.38);
- Natural gas prices will rise 55 percent;
- Heating oil prices will rise 56 percent;
- Electricity prices will rise 90 percent;
- A family of four can expect its per-year energy costs to rise by $1,241;
- Including taxes, a family of four will pay an additional $4,609 per year;
- A family of four will reduce its consumption of goods and services by up to $3,000 per year, as its income and savings fall;
- Aggregate GDP losses will be $9.4 trillion;
- Aggregate cap-and-trade energy taxes will be $5.7 trillion;
- Job losses will be nearly 2.5 million; and
- The national debt will rise an additional $12,803 per person ($51,212 per family of four).
The income losses, the job losses, the tax increases, and the mounting debt all get worse over the coming decades. The Waxman-Markey bill forces a bad deal on a generation that does not have the option to turn it down.
The $9.4 trillion of lost income, the 2.5 million lost jobs, the $5.0 trillion of additional national debt, and the $5.7 trillion in new taxes will buy no more than a 0.2 degree (Celsius) moderation in world temperature increases by 2100 and no more than a 0.05 degree reduction by 2050."
Christopher Horner, the CEI scholar who requested the documents put it best, "They're not telling you the cost -- they're not telling you the benefit, what are they telling you? They're just talking about global salvation."