Cap & Trade's impact on American families

As soon as the health care debate ends, which yesterday Senate Majority Leader, Harry Reid estimated to be $2 Trillion, instead of the $829 Billion advertised just this past Monday, we will turn our focus to the draconian Cap & Trade debate.

I wanted to take the time and read over the Congressional Budget Offices' summary of the Cap & Trade legislation to see what the impact will be on my family and friends.

I believe it will put the US at a severe competetive disadvantage on the world stage.

Many argue that the claims of "global warming" are dubious at best, considering that the claim ignores the earth's natural cooling and heating cycles that span millions of years.

Long before the first smoke stack belched or the first car took to the road, the earth warmed & cooled.

China & India have both flatly rejected calls for them to participate which means implementing such a law in the US will have a detrimental affect on US households expenses and jobs.

While these two countries refuse to take part in this scam, Obama's Commerce Secretary, Gary Locke recently called for US consumers to pay for our own emissions, and theirs.

That caveat is not included in the CBO report, but wiould only add to our rise in costs and unemployment beyond that which is currently included in their summary.


Here is a summary from the Congressional Budget Office (CBO), that addresses both of these issues.

Estimated Costs per Household

The GHG cap-and-trade program established under H.R. 2454 would impose
costs on U.S. households and provide some financial benefits, as well as the
benefits associated with any changes in the climate that would be avoided as a
result of the legislation. (This analysis addresses only those financial benefits.)

The costs would be incurred through higher prices for the goods and services that
households consumed, and the incidence of those costs would be determined
primarily by households’ consumption patterns. In the aggregate, most of those
costs would be offset by income or other benefits provided to households as a
result of the distribution of the value of the emission allowances.


The legislation would influence how much of that value was conveyed to various households by specifying how to allocate the allowances. For example, H.R. 2454 would direct some of that value to low-income households by specifying that 15 percent of the allowance value be used to provide energy rebates and tax credits for such households.


Gross Compliance Costs

Gross compliance costs would consist of the cost of emission allowances, the cost
of both domestic and international offset credits, and the resource costs incurred
in order to reduce the use of fossil fuels:


The cost of the allowances. The cost of acquiring allowances would become a
cost of doing business. In most cases, the firms required to hold the
allowances would not bear that cost; rather, they would pass it onto their
customers in the form of higher prices.


■ The cost of both domestic and international offset credits. Like the cost for
allowances, the cost of acquiring offset credits would be passed on by firms to
their customers in the form of higher prices.


■ The resource costs associated with reducing emissions. The resource costs
would include the value of the additional resources (including nonmonetized
resources, such as time) required to reduce emissions—for example, by
generating electricity from natural gas rather than from coal, by making
improvements in energy efficiency, or by changing behavior to save energy
(by carpooling, for example).


According to CBO’s estimates, the gross cost of complying with the GHG capand-
trade program delineated in H.R. 2454 would be about $110 billion in 2020
(measured in terms of 2010 levels of consumption and income), or about $890
per household (see Table 1). Of that gross cost, 96 percent would be the cost of
acquiring allowances or offset credits. The reminder would be the resource costs
associated with reducing emissions.


As noted, firms would generally pass the cost of reducing their emissions—or of
acquiring offset credits or emission allowances—on to their customers, and their
customers’ customers. (Indeed, assuming that higher costs are passed into prices
is customary in distributional analyses.) Households and governments would bear
those costs through their consumption of goods and services. Because households
account for the bulk of spending, they would bear most of the costs.


Transitional Costs
The measure of costs described above reflects the costs that would occur once the
economy had adjusted to the change in the relative prices of goods and services. It
does not include the costs that some current investors and workers in sectors of
the economy that produce energy and energy-intensive goods and services would
incur as the economy moved away from the use of fossil fuels.


To be sure, increased production of energy from non-fossil-fuel sources (such as wind or solar) and a shift to more energy-efficient production processes would create jobs and profit opportunities as well.


However, those jobs might be in different regions of the country or require different skills than the jobs being lost, and the profit opportunities might arise from different types of capital; their availability would
mute but not eliminate the costs of the transition.


Thus, investors would see the value of some stocks decline, and workers would face higher risk of unemployment as jobs in some sectors were eliminated. Stock losses would tend to be widely dispersed among investors because shareholders typically diversify their portfolios.


In contrast, the costs of unemployment would probably be
concentrated among relatively few households and, by extension, their
communities. The magnitude of those transitional costs would depend on the pace
of emission reductions, with more rapid reductions leading to larger costs.


Although large segments of the U.S. economy either do not face
significant foreign competition (for example, the electricity and transportation
sectors) or involve trade with countries that have a cap-and-trade program (the
European Union, for example), some important manufacturing industries, such as
steel, face competition from countries that do not face the costs of such a system.


Some regions and industries would experience substantially higher rates of unemployment and job turnover as the program became increasingly stringent. That transition could be particularly difficult for
individuals employed in those industries (such as the coal industry) or living in
those regions (such as Appalachia). However, any aggregate change in
unemployment would be small compared with the normal rate of job turnover in
the economy.

http://energycommerce.house.gov/Press_111/20090620/cbowaxmanmarkey.pdf

Are Americans willing to send more of our dwindling job market overseas while facing such an permanent increase in across-the-board prices here at home?

I do support the US developing alternative energy sources, but we do not have to throw the baby out with the bath water to achieve that result.