Practically Speaking

Kyle and her husband moved to Brookfield in 1986. She became active in local politics and started blogging in 2004. Her focus is primarily on local issues but often includes state and national topics, too. Kyle looks at things from the taxpayers' perspective in a creative, yet down to earth way, addressing them from a practical point of view.

Cap and trade April 2009

Energy, Follow the money, Going Green, President Obama, Socialism / Marxism, TAXES, THE ECONOMY

Cap and trade program would raise electricity prices, utility study says April 1 2009


Proposed federal efforts to reduce greenhouse gas emissions through "cap-and-trade" programs would raise electricity prices for Wisconsin customers, a group of Midwestern utilities said Wednesday.

Under one scenario, rates could jump by as much as 63% from 2012 to 2030, said Midwest Consumer Utilities, a group that includes Madison Gas and Electric Co. and WPPI Energy, which serves 50 customer-owned electric utilities providing power in Wisconsin, Upper Michigan and Iowa.

A study commissioned by Midwest Consumer Utilities analyzes the costs under different approaches to cap-and-trade. Such programs place an overall limit - the cap - on pollutant emissions. Companies then get individual emission allowances, either through an auction or direct allocation. If they reduce their emissions below the allowance level, they reap pollution credits they can sell to other firms.

President Barack Obama and Democratic lawmakers advocate cap-and-trade, while some Republicans have denounced it as leading to sharply higher energy prices.

Particularly contentious is the issue of how to allocate the pollution credits that would be bought and sold under the system. Industry groups have called for the credits to be given free to existing greenhouse-gas emitters such as power plants. Obama has called for auctioning them off, then using the estimated $650 billion raised to help people cover higher energy bills and to help develop more climate-friendly energy sources.

Auction-based cap-and-trade programs would cost Wisconsin consumers the most, Midwest Consumer Utilities says. If emission allowances were sold through auctions and none of the money were used to reduce utility rates, prices here could rise by 19% to 63% from 2012 through 2030, according to the study.

That would mean extra payments by Wisconsin customers totaling $609 million to $2.1 billion in 2012 alone. By 2030, the study says, the annual extra costs could total $5.7 billion.

The study comes as Congress moves toward legislation to combat climate change. Democratic representatives this week unveiled a 600-page "discussion draft" that includes cap-and-trade provisions, and the House Energy and Commerce Committee is working toward crafting a bill by mid-May.

Exclusive: Sensenbrenner to Lead Charge Against 'Cap 'N Tax'

Branding the so-called “cap ‘n trade” legislation nothing more than “a huge hidden tax and welfare transfer, largely to China and India,” Rep. Jim Sensenbrenner (R.-Wis.) today vowed to lead the charge in Congress against the environmental measure proposed by Democratic Reps. Ed Markey (Mass.) and Henry Waxman (Calif.).

“Their plan should be called ‘cap’n’tax,' Sensenbrenner told two HUMAN EVENTS reporters. In an exclusive interview, the former House Judiciary Committee chairman pointed out that the Waxman-Markey bill “contains no number, so the consumer can’t figure out his or her increase in the cost of electricity, oil and heating, and gas at the pump.”

Sensenbrenner explained that in order to cooperate with the legislation that deals with "climate change” (the term now in vogue instead of “global warming,” he observed), China and India will have to have compensation equivalent to 1% of the entire world’s Gross Domestic Product. That figure is above and beyond the aid we already give them, added the congressman.

 “That comes to about an additional $1900 in taxes every year for every American,” said Sensenbrenner, who pointed out that this would be raised through “hidden taxes” on electricity and gasoline. [A study by the Massachusetts Institute of Technology showed similar figures, concluding that “cap and trade” legislation would lead to additional taxes of $3, 128 per American household].

“If they could add up the tab, they’d be appalled,” Sensenbrenner told us. “The sooner we have those numbers, the sooner ‘cap and tax’ can be killed.”

Other recent critics of “cap and trade” have said its enactment will hit particularly hard on lower income Americans. During a recent meeting with the House GOP Study Committee, for example, Lord Christopher Monckton, onetime science advisor to Margaret Thatcher, said Republicans should make a campaign issue out of the proposed environmental legislation and brand it an assault on blue collar workers with lower incomes. In a fighting speech during a conference in Harrisburg, Pennsylvania last weekend, Rep. Glenn Thompson (R.-Penn.) denounced cap and trade as “the war on the poor.”

But Sensenbrenner goes further, attacking the proposal as “an assault on everybody.” In his words, “When you drive forty miles to and from work and you have to pay a lot more for gas every day, it’s going to hurt whether you make $20,000 a year or $2 million a year. The same is true of heating costs.”

Sensenbrenner addressed the Western European leaders who are urging the U.S. to embrace tougher measures for dealing with climate change. This movement is, he said, “driven center-left leaders doing this, such as the Labor governments of Tony Blair and now Gordon Brown. [German Chancellor] Angela Merkel is a leader of the right, but she’s in this ‘grand coalition’ with the Social Democratic Party (SPD) and they control the environment ministry. [French President Nicolas] Sarkozy is cooperating in the call for climate change measures, but not out leading the charge. 90% of France’s power comes from its nuclear facilities.”

Does he agree with Lord Monckton and other scientists internationally that the science behind global warming is without merit?

“I believe that the science is not as conclusive as the former vice president of the U.S. [Al Gore] and his friends with Nobel medals say it is,” Sensenbrenner told us.

Throughout his interview with HUMAN EVENTS, 31-year Rep. Sensenbrenner repeatedly returned to his theme that what he called ‘cap and tax’ would also strike a deadly blow to the U.S. manufacturing industry.

“Soon, if it is passed, manufacturing factories will have signs outside saying ‘Closed for Good. Gone fishing,’” he said, “We’ve got to kill this bill.”

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