Cap and Trade -- Taxing our Way to Bankruptcy

Senate Majority Leader Harry Reid, D-Nev., has declared (April 28) that he is making global warming the Senate's top priority. With legislation likely to impose monumental costs on the nation's economy while accomplishing no real-world climate benefits, this is a fitting conclusion for a Congress intent on bankrupting the nation through sheer clumsiness and ignorance.

Global temperatures have not risen for more than a decade, confounding alarmists' computer models. During the entire 20th century, as the planet recovered from the abnormally cold Little Ice Age, temperatures rose only 0.6 degrees Celsius. Current temperatures remain abnormally cool when compared with the Earth's average temperature over the past 10,000 years.

Even if we had reasons to fear the current temperature trends, legislation would still accomplish no real-world climate benefits. U.S. carbon-dioxide emissions have declined since the year 2000, while global carbon-dioxide emissions have risen by roughly 30 percent. Clearly the United States is not responsible for rising carbon-dioxide emissions.

Even if we immediately eliminated all our carbon-dioxide emissions, it would have little impact on global carbon-dioxide emissions. In less than a decade, the growth in Chinese emissions would completely negate our effort. Nations such as China and India, which are leading the surge in global carbon-dioxide emissions, have made it clear they will not restrict their emissions regardless of whether we do so.

In addition to having no impact on the climate, U.S. carbon-dioxide restrictions would paralyze the economy. The reason U.S. consumers and businesses use coal, oil and natural gas is because these power sources are significantly less expensive to produce than solar and wind power. As Barack Obama acknowledged on the 2008 campaign trail, "Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket."

Obama's acknowledgment that it will be extremely costly to restrict carbon-dioxide emissions was not a misstatement. CBS News reported last fall that the Obama administration has concluded carbon-dioxide restrictions would cost the American economy up to $200 billion each year. This translates to each U.S. household paying an extra $2,000 every year in energy costs.

The Obama Treasury Department is even more pessimistic, concluding that carbon-dioxide offsets would cost U.S. consumers $300 billion each year. This means each U.S. household would pay an extra $3,000 every year in energy costs.

In a normal political environment, legislators would not dare to consider slapping a $3,000 annual fee on American households, even if doing so could accomplish some real-world benefits. But this is not a normal political environment:

-- Congress gave billions of dollars to banks under the premise of easing tight lending conditions. The banks pocketed the taxpayer funds, paid record bonuses to top management and kept lending conditions tight.

-- Congress spent $800 billion on a stimulus plan that was supposed to keep unemployment below 8 percent. Unemployment now hovers near 10 percent; the federal deficit has taken on nightmare proportions; and the "shovel-ready projects" promised by Congress turned out to be art sculptures in the middle of nowhere and studies on how often and under what circumstances college students have sex.

-- Congress passed a $940 billion health care reform bill that was supposed to reduce insurance costs, but now Obama's own Department of Health and Human Services reports the bill will raise overall medical costs and jeopardize the ability of seniors to access health care services.

Harry Reid apparently believes Congress has successfully numbed the American public to economy-busting programs that increase government power while delivering no real-world benefits. As the political spotlight now turns to costly, ineffectual global-warming legislation, we will soon learn whether Americans will finally stand up to a Congress intent on bankrupting the nation for no good reason.

James M. Taylor is a senior fellow at The Heartland Institute. His e-mail is jtaylor@heartland.org. This article initially appeared in the Manchester Union Leader.