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The purpose of global warming legislation, including cap-and-trade, is to reduce emissions and concentration of greenhouse gasses (GHGs). The American Clean Energy and Security Act includes cap-and-trade to limit U.S. emissions unilaterally, without regard to whether other countries take similar measures. Action by the U.S. alone, however, would not significantly reduce global concentrations of GHGs - failing to achieve its environmental objective - while inflicting American families with higher energy costs and fewer jobs.

As of 2005, 20 nations combined to release more than 70 percent of global emissions.[i] Those 20 countries include many developing countries whose emissions since 1990 have increased dramatically, including China (up 100.8%), India (68.1%), Brazil (47.3%), Indonesia (78.0%), Iran (131.3%), South Korea (78.6%) and South Africa (26.4%).[ii] By contrast U.S. emissions have increased by only 16.6 percent in that time frame, while the U.S. is emitting less per unit of economic outcome.[iii] Since 1990, the share of developing countries' emissions has increased, while developed countries' share has declined.

On June 19, 2009, the Congressional Budget Office (CBO) released a letter and supplemental report about the American Clean Energy Security Act of 2009.[i] This analysis, which only looked at a portion of the costs of cap-and-trade, is being used by some to deceive the public into believing that this vast economy-altering bill would cost U.S. households only a "net average" of $175 in the year 2020.

In its document, CBO attempts to estimate how government redistribution (by giving away allowances and auction proceeds) will protect taxpayers, including those who were promised by the President that their taxes would not increase by a single dime.[ii] CBO estimates an average gross cost of $890 per household in 2020 with the top quintile paying an average of $1,380.[iii] After a generous assumption of an enormous government run wealth redistribution scheme via auction proceeds and free allowances, CBO projects a net average cost of $175 per household on average, with a middle quintile facing the highest net costs of $340.[iv] That figure, however, is only the budgetary cost of the scheme per household, not a comprehensive economic analysis. Moreover, it examines only one year of the program, a year that CBO optimistically assumes is relatively low cost, and after the expensive transition years.

As a result, CBO's estimate really only captures some of the costs of cap-and-trade, as the report acknowledges.

Promise: "But the bulk of our efforts must focus on unleashing a new, clean-energy economy that will … cut our carbon pollution by about 80 percent by 2050, and create millions of new jobs right here in America[.]" -- President Barack Obama, April 22, 2009 (speech in Newton, Iowa)

Reality: Cap-and-trade will destroy millions of jobs overall, even if it does create some green jobs. Numerous studies have analyzed the effect of cap-and-trade legislation[i] and concluded that it would result in millions of fewer jobs overall, even if it does create some green jobs. The Energy Information Administration (EIA), the government agency in charge of providing official energy statistics, concluded that cap-and-trade could result in up to 2.3 million fewer jobs in 2030 and up to 800,000 fewer manufacturing jobs in 2030, after including new green jobs.[ii]

The National Black Chamber of Commerce (NBCC) commissioned a study by Charles River Associates (CRA) that concluded cap-and-trade would result in about 1.5 million fewer jobs in 2015 and 3.6 million fewer jobs in 2050, after new green jobs were considered[iii] (graph below[iv]).

This week as the Senate Environment and Public Works Committee kicks off hearings on the Kerry-Boxer cap-and-trade bill, one argument Democrats will spout over and over is that America is a nation poor in natural resources. As seen from the quotes below, we are shamed into the belief that America possesses too little and consumes too much:

"With 3 percent of the world's oil reserves, the U.S. cannot drill its way to energy security," then-presidential nominee Barack Obama wrote on his campaign website in 2008. House Speaker Nancy Pelosi (D-Calif.) stated, "All told, the U.S. has only 1.6 percent of world's known oil supply." And in the Senate, Majority Leader Harry Reid (D-Nev.) added, "The math is simple: America has just 3 percent of the world's oil reserves, but Americans use a quarter of its oil."

Hear that? It's the sound of another 1,000-page bill hitting desks all over Washington. Sens. John Kerry and Barbara Boxer have introduced the "Clean Energy Jobs and American Power Act," which is the Senate equivalent of the Waxman-Markey cap-and-trade bill that passed the House earlier this year. Compared to Waxman-Markey (1,428 pages), the Kerry-Boxer bill (925 pages) is a model of concision. However, it is expected to grow as Senate Democrats try to buy Republican votes with token support for nuclear energy and offshore drilling. Skeptical senators should not take the bait.

Sen. Jim Inhofe, the ranking Republican on the Senate Environment and Public Works Committee, has blown the whistle on the Democrats' strategy, which involves targeting Republicans such as John McCain and Lindsey Graham. We've been down this road before: Last year, when the GOP was winning the debate over offshore drilling, Graham and four other Republicans nearly snatched defeat from the jaws of victory by signing onto a watered-down compromise that would have opened only a tiny sliver of the coast for drilling in exchange for a batch of new subsidies for renewable energy, including nuclear power.

WASHINGTON - U.S. Sen. Jim Inhofe says the financial hit suffered by Oklahoma's transportation program this month was $15 million more than expected.

By the end of the week, the Oklahoma Republican hopes to have a deal in place to at least halt that downward trend.

"Oklahoma loses on this," he said.

At issue is whether Inhofe and other top congressional players on transportation can work out an agreement on a short-term extension, possibly six months, of the current transportation programs.

If they fail, they may have to settle for another month-long resolution like the one passed in September.

Republicans on the Senate Environment and Public Works Committee may block a markup on the Democrats' climate bill if they're not satisfied they've gotten a sufficient analysis time to review the text in detail, according to the panel's top Republican, Sen. James M. Inhofe (Okla.).

Inhofe, speaking to reporters Friday afternoon, said the committee's seven Republicans were united in their determination to fully review the bill sponsored by Democratic Sens. John Kerry (Mass.) and Barbara Boxer (Calif.).

The bill is set to have its first hearing Tuesday and Boxer, who chairs the Environmental and Public Works Committee, said this week she hopes to mark up the bill a week or two after that.

Although the ratio of committee Democrats to Republicans is 12 to 7, under committee rules two Republicans must attend a markup in order to have a quorum.

We're not being unreasonable," Inhofe said. "The only leverage we have is the quorum leverage, and if we get stonewalled, we'll use it.

SENATE COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
"LEGISLATIVE HEARING ON S. 1733, CLEAN ENERGY JOBS AND AMERICAN POWER ACT"
WEDNESDAY, OCTOBER 28, 2009
9:30 AM
Dirksen 406

(Order subject to change)

Panel I: Jobs and Economic Opportunities

- Peter Brehm, Vice President of Business Development & Government Relations, Infinia Corporation

- Dan Reicher, Director, Climate and Energy Initiatives, Google

- Dave Foster, Executive Director, Blue Green Alliance

- The Honorable Michael Nutter, Mayor, City of Philadelphia, Pennsylvania

- Kate Gordon, Senior Policy Advisor, Apollo Alliance

- Bill Klesse , Chairman and CEO, Valero Energy Corp

- Brett A. Vassey, President and CEO, Virginia Manufacturers Association

Panel II: National Security

- The Honorable John Warner, United States Senator (Retired)

- Kathleen Hicks, Deputy Undersecretary of Defense for Strategy, Plans, and Forces, United States Department of Defense

- Vice Admiral Dennis McGinn, USN (Ret.), Member, Center for Naval Analysis Advisory Board

- Major General Robert H. Scales (Ret.)

- Drew Sloan, Fellow, Truman National Security Project

- Lieutenant Colonel James Jay Carafano (Ret.), Deputy Director, Kathryn and Shelby Cullom Davis Institute for International Studies and Director, Douglas and Sarah Allison Center for Foreign Policy Studies, The Heritage Foundation

Panel III: Utilities

- David Crane, President and Chief Executive Officer, NRG Energy, Inc.

- Ralph Izzo, Chairman, Chief Executive Officer and President, Public Service Enterprise Group Incorporated (PSEG)

- Kevin Law, President and Chief Executive Officer, Long Island Power Authority

- Nathaniel Keohane, Director of Economic Policy and Analysis, Environmental Defense Fund

- Joel Bluestein, President, Energy and Environmental Analysis, Inc., ICF International
- Barry Hart, Chief Executive Officer, Association of Missouri Electric Cooperatives

- Dustin Johnson, Commissioner, South Dakota Public Utilities Commission

Panel IV: Adaptation

- The Honorable Shari Wilson, Secretary, Maryland Department of the Environment

- Ronald E. Young, President, California Association of Sanitation Agencies
- Dr. Peter C. Frumhoff, Chief Scientist, Climate Campaign, Union of Concerned Scientists

- Larry J. Schweiger, President and Chief Executive Officer, National Wildlife Federation

- Fawn Sharp, President, Quinault Indian Nation

- Jim Sims, President and Chief Executive Officer, Western Business Roundtable

- Dr. Kenneth P. Green, Resident Scholar, American Enterprise Institute

SENATE COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

"LEGISLATIVE HEARING ON S. 1733, CLEAN ENERGY JOBS AND AMERICAN POWER ACT"

THURSDAY, OCTOBER 29, 2009

9:30 AM

Dirksen 406

Panel I: Moving to a Clean Energy Economy

Preston Chiaro, Chief Executive Officer, Energy Product Group, Rio Tinto
John Rowe, Chairman, President and Chief Executive Officer, Exelon Corporation
Dr. Willett Kempton, Professor, Marine Policy, University of Delaware
Bob Winger, President, International Brotherhood of Boilermakers, Local 11
Fred Krupp, President, Environmental Defense Fund
Mike Carey, President, Ohio Coal Association
Bob Stallman, President, American Farm Bureau Federation

Panel II: Transportation

The Honorable Sherwood Boehlert, Co-Chair of the Bipartisan Policy Center's National Transportation Policy Project
William Millar, President, American Public Transportation Association
Mike McKeever, Executive Director, Sacramento Area Council of Governments (SACOG)
Barbara J. Windsor, President & Chief Executive Officer, Hahn Transportation, Inc.

Panel III: Actions in Other Countries

John Podesta, President and Chief Executive Officer, Center for American Progress
Ned Helme, President, Center for Clean Air Policy
Jonathan Lash, President, World Resources Institute
Iain Murray, Vice-President for Strategy, Competitive Enterprise Institute

Panel IV: Moving to a Clean Energy Economy

The Honorable Linda Adams, Secretary, California Environmental Protection Agency
Dave Johnson, Organizing Director, Laborers’ Union Eastern Region, Laborers' International Union of North America (LIUNA)
J. Stephan Dolezalek, Managing Director, VantagePoint Venture Partners
David Hawkins, Director, Climate Center, Natural Resources Defense Council
Eugene Trisko, Attorney at Law, On behalf of the United Mine Workers of America
Charlie Smith, President & Chief Executive Officer, CountryMark
Paul Cicio, President, Industrial Energy Consumers of America

As debate proceeds on the Kerry-Boxer bill, there will undoubtedly be myriad attempts to cut deals to secure votes. If the past is prologue, coal will be center stage. The parameters of the "deal" for coal have largely been framed by the extent to which Congress provides financial support (through explicit funding and bonus allowances) for carbon capture and sequestration (CCS). There's reason to believe much the same will happen again. Yet this CCS "deal" misses the mark. That's because funding is one mere facet of the intricately (some might say infinitely) complex and convoluted web of regulatory policy issues that could very well engulf, and even overwhelm, the CCS enterprise. And in a cap-and-trade regime, no CCS means no coal.

For the record, neither Kerry-Boxer nor Waxman-Markey comes close to untangling the CCS web. And judging by the posture of each bill's strongest supporters, the great untangling is unlikely to happen any time soon. Yet funding CCS without also attaching the necessary regulatory and policy clarifications to build CCS is a fool's errand, providing no consolation to investors (and ultimately ratepayers) who will assume considerable financial and legal risk. And it's therefore ultimately no help to coal, which Kerry-Boxer and Waxman-Markey would just as well see driven to extinction.

U.S. Senate Committee on Environment and Public Works

RR: U.S. Cap-and-Trade Without International Action: All Pain and No Gain

Tuesday October 27, 2009

RR: Incomplete CBO Estimate Does Not Include All Costs of Cap-and-Trade

Tuesday October 27, 2009

RR: Cap-and-Trade Destroys Jobs

Tuesday October 27, 2009

The Hill: Inhofe: Dems Understate Nation's Resources

Tuesday October 27, 2009

NRO Editorial: Scrap the Cap

Tuesday October 27, 2009

Inhofe Works to Fix Road Funding (Tulsa World)

Monday October 26, 2009

Wash. Post: Republicans May Delay Cimate Bill Markup

Friday October 23, 2009

WITNESS LIST: LEGISLATIVE HEARING ON S. 1733, CLEAN ENERGY JOBS AND AMERICAN POWER ACT - WEDNESDAY, OCTOBER 28, 2009

Friday October 23, 2009

WITNESS LIST: LEGISLATIVE HEARING ON S. 1733, CLEAN ENERGY JOBS AND AMERICAN POWER ACT - THURSDAY, OCTOBER 29, 2009

Friday October 23, 2009

COAL, CCS AND CRS

Thursday October 22, 2009

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