Waxman-Markey

===

note color below

MERRI OK

see USCAP

end gallery 420 bak

DIED IN sEANTE, HOW/WHY? HARRY REID NEVER PUT UP FOR VOTE, conflicted w/ ACA fight, ironically would have helped coal transition. Obama pivot to CPP>

===

SEE ACESA

this was last best hope?

"energy citizens astro, jack gerard API opposed:markey co-sponsor

H.R.2454 - American Clean Energy and Security Act of 2009111th Congress (2009-2010)

BILL

===

https://www.eenews.net/articles/7-years-later-failed-waxman-markey-bill-still-makes-waves/

7 years later, failed Waxman-Markey bill still makes waves

By Amanda Reilly, Kevin Bogardus | 06/27/2016

7 years later, failed Waxman-Markey bill still makes waves

It’s been seven years since the House passed major legislation to create a cap-and-trade system for heat-trapping greenhouse gas emissions, and though that legislative attempt ultimately failed, the bill’s sponsors still say it sowed the seeds for other climate change efforts.

As is well-known, the Waxman-Markey bill was not taken up by the full Senate and never became law. But looking back over the last seven years, the bill’s sponsors and their former congressional aides reminisced with E&E Daily in interviews that the unsuccessful fight was worthwhile and that it has had important repercussions.

"It is always worthwhile to fight for what you believe in," former Democratic Rep. Henry Waxman of California said in his office in Washington, D.C., "and if you don’t succeed at first, you keep trying."

Waxman retired at the end of the 113th Congress, and early last year he joined his son’s public affairs and government relations firm, Waxman Strategies. The bill’s other sponsor, Democratic Sen. Ed Markey, has been the junior senator from Massachusetts since 2013.

The two former House lawmakers introduced their bill, formally known as the "American Clean Energy and Security Act," on May 15, 2009. The 1,400-page bill would have established emissions caps through 2050 for several greenhouse gases, including carbon dioxide, and instituted a system for trading emissions allowances.

Waxman-Markey squeaked by the House seven years ago yesterday on June 26, 2009, by a vote of 219-212.

Phil Barnett, who was the Democratic staff director at the House Energy and Commerce Committee under Waxman at the time, said working on the bill was "demanding" and "challenging."

"We worked intensively on it for six months … seven days a week, long hours. The bill was a top priority for Chairman Waxman," said Barnett, now a consultant, adding, "The entire staff poured their hearts and souls into the effort because they thought it would do something to solve the climate problem as well as create economic opportunities and keep costs low."

Looking back, Markey pointed to work on the health care law, another priority for President Obama, for stymying the cap-and-trade bill’s momentum in the Senate.

"We finished Waxman-Markey in the last week of June of 2009. So we had finished our work," Markey said. "We were ready to go. And the politics of it then got much more complicated than anyone thought they would have."

The political dynamics around health care reform became complex with the death of Massachusetts Democratic Sen. Ted Kennedy in August 2009. When Republican Scott Brown won Kennedy’s seat in an upset victory in a special election in January 2010, the politics of passing major legislation became more difficult becauseBrown gave Republicans a 41st seat in the Senate, thereby robbing Democrats of a filibuster-proof majority.

Then-Senate Majority Leader Harry Reid (D-Nev.) never brought the climate legislation, which was championed in the upper chamber by then-Sens. John Kerry of Massachusetts and Joe Lieberman of Connecticut, to a vote on the floor. Many people close to the legislation have since blamed a number of factors, including Republican opposition and concessions to special interests.

"It was a disappointment that we couldn’t get a bill all the way through, but we highlighted the issue," Waxman said. "We gave it our best effort. We tried to accomplish that goal. But I know from my own history as a member of Congress, I have to work sometimes decades before some of the proposals I made eventually became law."

He cited, for example, the 15 years it took for Congress to pass the 2009 Tobacco Control Act, which gave the Food and Drug Administration the authority to regulate tobacco products.

Genesis of executive branch efforts

The collapse of the Waxman-Markey bill in the Senate in 2010 spurred the Obama administration to aggressively use the executive branch to issue regulations aimed at reducing greenhouse gas emissions. U.S. EPA issued its final Clean Power Plan for reducing carbon dioxide emissions from power plants last August and helped negotiate the international climate change deal in Paris last December.

In the first term, "the administration really focused on trying to get a big legislative fix to the climate change problem. As you know, that effort fell short," John Podesta, who was a top adviser to Obama and helped drive White House climate policy from 2014 to 2015, said at a recent conference in California. "In the second term, there was more focus on organizing and coordinating the agencies and the White House offices on both the domestic and international side of the equation."

Podesta, who is now campaign chairman for Democratic presidential nominee Hillary Clinton, said that, if elected, the former secretary of State would likely focus on executive actions instead of attempting to pass a "grand climate fix" through Congress, even if the Senate flips to Democratic control.

Obama’s experience was "illustrative," Podesta said.

"A successful climate agenda requires a senior, serious point person in the White House," he said, "who can drive the agencies to do all they can across the whole suite of federal authorities."

But for the Obama administration, starting with a grand climate fix was "absolutely the right thing to do," Waxman said.

And Markey credited the legislation for setting the stage for the Obama administration’s second-term actions by helping to create necessary alliances.

"Much of what the president has done since then, and even if you look at the Clean Power Plan, it’s based largely on what was inside of the Waxman-Markey bill that we passed," Markey said. "So we had worked out the partnerships, the coalitions, that were still there when the president decided to develop the Clean Power Plan. So I think it was actually a very helpful political process to have gone through."

Michael Goo, another former top congressional aide who worked on the bill, agreed with the Massachusetts senator, saying, "Waxman-Markey is still the yardstick by which to measure climate programs."

"It was economywide, it set reduction pathways based on what the science was telling us, and it showed us how, by working together with industry, we could craft an effective climate program consistent with a growing economy," said Goo, now with AJW Inc. "And I think, sooner or later, we will return to something like it. "

Clinton vs. Trump

Markey called a potential Hillary Clinton administration paramount to the United States "continuing to be the world leader" on climate change.

Obama promised the globe in the time before the Paris climate negotiations that the United States would reduce its greenhouse gas emissions between 26 and 28 percent from 2005 levels by 2025. In Paris last December, more than 190 nations agreed to limit global warming to 2 degrees Celsius and to pursue efforts to limit warming to 1.5 C. The agreement also commits countries to periodically revisiting their pledged domestic emissions reductions.

Both Waxman and Markey are optimistic that Clinton will become the next president of the United States.

"I think she would be wise to follow the example of President Obama in trying to put this as a high priority to work with the rest of the world to reduce the greenhouse gases that cause climate change," Waxman said. "I believe she’s committed to it."

Markey is harshly critical of Republican presidential candidate Donald Trump’s inconsistent views on climate change. In 2009, before international climate talks in Copenhagen, Denmark, Trump signed an open letter calling global warming a problem; he’s since claimed that it is a hoax perpetuated by the Chinese to hurt American business.

Trump has more recently vowed to undo the Paris climate pledge, which Obama officials are hopeful will go into force before the beginning of the next administration. Once entered into force, which happens when at least 55 countries representing at least 55 percent of global greenhouse gas emissions formally adopt it, the withdrawal process for a nation takes four years.

Markey compared Trump’s claim that climate change is a hoax to the businessman’s former claim that Obama was born in Kenya and not the United States.

If Trump is elected, Markey said, "every single promise we made to the rest of the world [on climate change] will be broken."

A campaign issue?

Markey also predicted that climate change would become a more hotly debated issue this presidential election compared with the 2008 race, when both parties’ candidates expressed support for addressing greenhouse gas emissions, and the 2012 race between Obama and former Massachusetts Gov. Mitt Romney (R) when climate change was largely a nonissue.

"It’s going to become a larger and larger issue that goes right to [Trump’s] credibility as a leader in our country," Markey said. "So the more he says it, the better for us because suburban swing Republicans and independent voters believe the science of climate change."

Others have said the same.

"The Clinton campaign is going to push these issues, and their allies in the clean energy business sector are going to push these issues forcefully, especially in swing states," said Paul Bledsoe, a former climate adviser for the Bill Clinton administration and an energy consultant. "I think they see it as a profound political vulnerability for Trump and the Republicans generally."

Still, a recent Gallup poll found that, of 17 policy issues, the issue gap for climate change is greatest among voters. The poll found that 72 percent of Democrats say that the issue of climate change is "extremely" or "very" important in how they vote for a presidential candidate. Just 25 percent of Republicans say that the issue is important.

Waxman lamented the hyper-partisan nature of Congress and that "compromise" has become a "dirty word" in D.C. He said he’s surprised that supporters of cap and trade were unable to harness the business community in attracting more Republican support for the legislation.

"It has been a difficult time that we’re going through in getting a more reasonable way to compromise," he said, "because so many of the Republicans that have been elected to office in the last four, six years think that their role is to say no to anything that the Democratic president, Democrats want."

Greg Dotson, who was the chief environmental staffer on the Senate Environment and Public Works Committee at the time of Waxman-Markey, said that Republican support did not materialize despite support from companies in the oil and chemical sector.

"The assumption and hope was that if you got businesses on, you got Republicans on," said Dotson, who is now the vice president for energy policy at the Center for American Progress. "So we did a lot of work to address business concerns, and we got a lot of business support, and that did not translate to broad Republican support.

"For an incoming president," Dotson added, "that’s a pretty scary precedent."

At a recent hearing in the Environment and Public Works Committee, Markey said it was ironic that coal-industry allies who are complaining about EPA greenhouse gas regulations’ impact on jobs didn’t support the cap-and-trade legislation.

He complained that the coal industry rejected an offer of billions of dollars for carbon capture and storage technology via the Waxman-Markey bill. Markey argued that the bill attempted to help coal companies stay alive in a way that works "for all the interests."

"We were trying to give them a bridge to the future," he said. "Do you think they wish they could go back to 2009 and grab that money?"

Waxman said that he was hopeful that the dynamic would change in Congress to allow for more collaboration between the parties. He predicted a disaster for Republicans at the polls in November.

"I think it’s going to change because I think they’re going to go down the tubes in this next election, and that’s going to be a lesson to them," Waxman said.

He added: "But I don’t know. I’m giving you my wishful thinking."

===

https://www.desmog.com/2023/02/21/oreskes-conway-the-big-myth-free-market-capitalism-climate-change-mont-pelerin-society/

science historians Naomi Oreskes and Erik M. Conway, authors of the classic 2010 book :{Merchants of Doubt: How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming:(style="box-sizing:border-box"):}:, have released a new book placing that doubt machine into a longer arc of U.S. business and political history.

:{The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market:(style="box-sizing:border-box"):}: explores an even more ambitious history dating from the dawn of the 20th century to the present day.

The book documents how today’s prevailing anti-regulatory and anti-government postures that deride Big Government and cheer for Big Business did not arise simply from grassroots demands. Instead, they arose from well-funded industry campaigns creating what Oreskes and Conway have called a manufactured consensus “quasi-religious belief” in deregulated markets and an accompanying diehard opposition to governmental solutions to public policy problems.

Fighting Public Utilities, Child Labor Laws

One of the first campaigns in that spirit occurred within the electricity utility industry via an organization which eventually became known as the Edison Electric Institute.

What is now colloquially calledEEI, was launched in 1885 as the National Electric Light Association, or NELA. At the time, it “represented more than five hundred of the largest privately owned electrical utilities, accounting for more than 90 percent of U.S. kilowatt output,” according to the book.

In the 1920s, according to Oreskes and Conway, “electricity industry leaders organized one of the largest propaganda campaigns in the history of the United States.” The campaign aimed to persuade the public thatmunicipal-owned electricity was a bad thing, advocating instead for investor-owned utilities. In the end, though, it resulted in higher rates for homeowners and small businesses and bigger profits for company owners and their bankrollers.

The initially unpopular campaign framed its activities under the guise of freedom and market efficiency. NELA’s influence operation — involving rewriting K-12 and university textbooks, courting and funding industry-friendly professors, utilizing astroturf campaigns, deploying sophisticated lobbying techniques to facilitate regulatory and legislative capture, and other deceptive practices — resembles much of the fossil fuel industry’s political pressure that DeSmog has covered and uncovered week-in and week-out for over a decade and a half.

At the time, it was the first of its kind industrial-scale full-court press, and it provided a roadmap for other corporate hegemons in subsequent decades. And NELA’s goal went far beyond merely winning a PR campaign, Oreskes and Conway conclude; it had much deeper ideological underpinnings.

“[U]nlike conventional PR, the aim was not simply to create a positive impression of a particular business or even of the whole industry,” they write. “Rather, the goal—expressed outright in numerous documents—was to change the way Americans thought about private property, capitalism, and regulation” altogether.

Core to NELA’s campaign, Oreskes and Conway wrote, was the idea “that free-market capitalism was the embodiment of freedom, writ large, and that any restriction on the freedom of any business would put us on a slippery slope to tyranny.”

Private ownership of the electricity industry was, up until then, relatively rare in the United States and even more so throughout the industrializing world. But as of 2017, 72 percentof U.S. electricity customers got their power from investor-owned utilities. NELA’s campaign, in other words, changed history as we know it.

Today, its successor EEI and its member companies continue to wage deceptive PR campaigns to fight renewable energy and bolster the continued consumption of fossil fuels.

The NELA campaign’s legacy, however, goes far beyond its sector alone, according to Oreskes and Conway. “Perhaps most importantly, NELA pioneered a strategy of insisting that these claims were true, regardless of the facts,” they wrote.

Broadening their view beyond the fossil fuel industry, Oreskes and Conway also detail how the National Association of Manufacturers (NAM) propelled similar efforts across other industries during the same era. Like EEI, fast-forwarding to the present-day, NAM has served as a key node of climate denialism. 

But in its earliest days,NAM maintained a different sinister focus, according to The Big Myth: advocating against child labor laws amid what the authors described as a “pandemic” of workplace deaths both among young workers and the adult workforce.The sheer volume of such deaths served as one of the first major wakeup calls in the need for a more active regulatory state, the book maps out.

In making its case for child labor and against regulations protecting children, NAM espoused “that the federal government had no business interfering in business” and called such a notion “socialistic in its origin, philosophy and associations.”

Libertarian Fringe to (Neo)Liberal Mainstream

While both NELA and NAM laid the groundwork for a paradigm that’s alive and well today, their ideas were not adopted globally until the formation of theMont Pelerin Society,a group created in 1947 that like EEI and NAM has received close scrutiny from DeSmog for years. Oreskes and Conway devote a whole chapter of The Big Myth to Mont Pelerin.

Like NELA and NAM, Mont Pelerin’s roots lay in anti-regulatory and business-funded ideology. But unlike them, Mont Pelerin came out of academia and via professors committed to the now globally pervasive neoliberal ideology they created. Mont Pelerin inspired similar groups that are, like it, still active today, such as the Koch Industries-funded Institute for Humane Studies at George Mason University and the University of Chicago’s free market-oriented Economics Department.

Oreskes and Conway point to a legion of like-minded groups arising by the 1970s, riding the momentum of an academic community devoted to neoliberal ideology, and reacting to the gains made in environmental protection and other areas. Formation of these groups accelerated after the metaphorical call-to-arms made in a memo written to theU.S. Chamber of Commerce by the then-tobacco industry attorney and soon-to-be Supreme Court Justice Lewis Powell.

Known today as the Powell Memo, the 1972 letter called for Big Business to undergo “careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations.”

The Powell Memo, Oreskes and Conway concluded, spearheaded free market fundamentalist groups such as the Cato Institute, Koch Family Foundations, Scaife Family Foundations, Olin Foundation, Heritage Foundation, and the Federalist Society, among others. All of these entities, and the groups they fund or work alongside in coalitions, remain powerful forces within U.S. and global politics.

The Big Myth further highlights how those think tanks and companies also played a key role in defeating the 2009 and 2010 congressional push, led by then-President Barack Obama, to pass a federal, market-oriented climate bill known as the American Clean Energy and Security Act.[waxman markey]  Critics would charge that the policy approach taken in the bill, emblematically, embodies the very “market fundamentalist” ethos reigning over U.S. politics for the past 100-plus years.

During the congressional debate over a bill that would haveenshrined the policy lever of cap-and-trade, the Koch-funded Tea Party network also ascended[vid]

previous congressional pushes in the 2000s for what was ultimately a business-friendly climate policy, had enjoyed bipartisan support. But The Big Myth explains how as the Tea Party network took flight, Republican Party support for the climate bill — and broader climate action — eroded to a near-zero level. It has mostly remained there since.

At the same time, the reality of climate change had and has continued to become all the more clear. That reality though, Oreskes and Conway wrote, clashes with the religion of market fundamentalism.

“[H]ad the market fundamentalists spent so much time defending the magic of the market-place that they simply couldn’t accept market failure on a global scale?” the authors asked of the legion of climate-change deniers who helped to kill the bill. “To accept the enormity of what climate change portended for civilization was to accept that capitalism, as practiced, was undermining the very prosperity it was supposed to deliver. And not just in some distant future, but now.”

Although this “quasi-religious belief” in the power of the market holds the greatest sway with conservatives, Oreskes and Conway argue that belief in the “magic of the marketplace” has become an intoxicating ideology withinliberal circles too, including within climate policy debates.

“Even in supposedly liberal enclaves like Cambridge, Massachusetts,” where Oreskes teaches at Harvard, “many people think climate change will be best addressed by technological innovation in the marketplace,” the co-authors surmise, perhaps in alluding to the prototypical industry-friendly policies pushed by former Obama Administration U.S. Secretary of Energy Ernest Moniz — a professor at the nearby Massachusetts Institute of Technology.

“The rise of right-wing think tanks helped spread the pro-market, antigovernment gospel across the country and insert what had been decidedly niche views into the mainstream,” the authors explained of the ideology’s spread. Other scholars have referred to this as the “force field” effect, moving the gravitational pull of what’s possible within U.S. politics further and further toward right-wing, corporate-created policy solutions.

The ideological roots of anti-democracy, anti-environmental, and anti-regulatory campaigning explored in The Big Myth also serve as the heart and soul of the book :{Climate Cover-Up: The Crusade to Deny Global Warming:(style="box-sizing:border-box"):}:, written by DeSmog co-founders James Hoggan and Richard Littlemore.

If you have learned from DeSmog’s reporting shedding light on the climate change denial machine, you’ll love The Big Myth, an excerpt from which follows below. The book is a must-read for all students of the sordid history of public relations and governmental capture.

Go grab a copy and checkout some recent interviews on the book, as well, for further background. A video of Professor Oreskes discussing the book can also be seen below.

Excerpt from The Big Myth

In the 1990s, as capitalism was being declared triumphant in many quarters, scientists had proved that man-made climate change was under way.1 Climate change was textbook market failure. It arose from everyday economic activity— using fossil fuels—but was about to impose a huge external cost, inundating major coastal cities around the globe, making hurricanes and cyclones even more deadly than they already were, and dislocating tens or even hundreds of millions of people. It was also textbook environmental injustice, as poor people would almost certainly bear the brunt of a problem created by the rich.

But it also had a textbook answer: putting a price on carbon. Economists called this solution a “Pigouvian tax”—after the Cambridge economist Arthur Pigou, who in the early twentieth century had helped develop the concept of negative externalities. (Pigou also suggested it would be reasonable for governments to subsidize activities that had “positive externalities,” such as education.) The idea of pricing social and environmental costs of carbon was hardly radical; Pigou was firmly mainstream, a respected scholar at Cambridge University, a leading figure in what came to be known as the Cambridge school of economics.2 The obvious benefit of the Pigouvian approach was that it remedied the market failure directly by embedding information—in this case scientific information—into the price of fossil fuels. Then consumers could decide for themselves whether or not to buy more expensive fossil fuels, and producers of alternatives could compete on a level playing field.

The Clinton administration proposed to address climate change through a Pigouvian tax, the so-called “BTU” tax (referring to the heat content of fuels as measured in British Thermal Units).3 But it was opposed—indeed, ridiculed—by a broad coalition of conservatives, including, the Chamber of Commerce, the American Petroleum Institute, and virtually every right-wing think tank in America.4 

The notorious Global Climate Coalition, a network of fossil fuel producers and users that in the 1990s successfully prevented the U.S. Congress from ratifying the Kyoto protocol to the U.N. Framework Convention on Climate Change, was originally established as a committee of the National Association of Manufacturers. Even though the idea of putting a price on carbon was a mainstream economic approach to market failure, Republicans framed it as just another example of Democrats’ penchant to “tax and spend.” The Wall Street Journal mocked it as Al Gore’s “favorite tax.”5

In his 1979 paper on nonmarket failure, economist Charles Wolf had slipped into his conclusion the idea that one cause of nonmarket failure was “premature but politically effective demands for government action.”6 In the 1990s, many Republicans picked up on this theme, arguing that it was premature to act on climate change. Even at the time, that was wrong: scientists already had a consensus that man-made climate change was under way and likely to be very costly.7 To act in the 1990s would have been appropriate. It would have been timely. But Clinton was unable to generate congressional support for action; Republican opposition made it clear that any proposal to put a price on carbon would be dead on arrival. In 1999, when Vice President Al Gore ran for president on a platform prioritizing climate change, journalist Gregg Easterbrook (brother of Judge Frank Easterbrook) embarrassed him on the campaign trail with a false story that his mentor—climate champion Roger Revelle—had experienced a deathbed conversion and died thinking climate change was not a serious problem.8 (He had not.)

As the 1990s became the 2000s—and scientists declared the evidence “unequivocal”—market fundamentalist did not adjust their views. To the contrary, their opposition hardened.9

In 2006, Lord Nicholas Stern, former chief economist of the World Bank, concluded on behalf of the UK government that, yes, fixing climate change would be expensive—perhaps as much as 1 percent of global GDP per annum—but not fixing it would cost much more: at least 5 percent and perhaps as much as 20 percent.10 Here was a solid argument from a man who could scarcely be accused of being any kind of -ist other than an economist. In response, conservatives dug in deeper. Senator Ted Cruz promoted the canard that global warming had stopped; Senator James Inhofe called it a liberal conspiracy to bring down capitalism.11 No matter what solutions were proposed—market-friendly or not—the right wing found reasons to oppose them. The science wasn’t settled (they claimed). It would be too expensive to fix. We could just adapt. It was all a hoax. Often these claims were couched in libertarian terms, as when in 2011 former House Speaker Newt Gingrich deemed the push to address climate change “the newest excuse to take control of lives.”12

The singular exception to climate denial in Republican Party leadership was Senator John McCain. He and conservative Democrat Joe Lieberman introduced Climate Stewardship acts in 2003, 2005, and 2007 to address the carbon dioxide emissionsthat drive climate change by creating an emissions trading system—a proven mechanism, albeit more complicated than a Pigouvian tax. But when given the chance to use it to address climate change, Republicans refused.13 The 2003 bill failed on mostly party lines, with a few Democrats and nearly all Republicans in opposition. But it was a closer call than many expected, and soon Congress faced intense lobbying pressure against climate legislation, particularly from NAM and the U.S. Chamber of Commerce. The 2005 version came to a vote and failed 60–38, with only a handful of Republicans voting yea.14 Two years after that, McCain could not even persuade Republican leaders to bring a climate bill to the Senate floor.15

In 2009, Congress tried once more, with the American Clean Energy and Security Act (better known as Waxman-Markey, for its primary sponsors, Massachusetts representative Ed Markey and California representative Henry Waxman). For the fourth time in a decade, Congress had the opportunity to address climate change using a market mechanism, and for the fourth time rejected it.The bill barely passed the Democratic-led House; nearly all Republicans voted against, as did Democrats from fossil-fuel-producing states (and a few Democrats who found the bill too weak). The Senate never brought it to a vote. Democrats concluded they could not overcome the “wall of opposition” they faced from their Republican colleagues, opposition fortified by fierce lobbying.16 One analysis concluded that, in the eighteen months between January 2009 and June 2010, electric utilities, oil and gas companies, trade associations, and think tanks spent at least $500 million against climate change legislation.17 Another study tracinganti-climate lobbying back to 2003 places the figure at closer to $1 billion.18

The fossil fuel industry’s economic interests in preventing climate action have always been obvious; less understood is how it has camouflaged those interests. No one ever said, “I am denying climate change to protect corporate profits.” They said they were protecting jobs, protecting the economy, and protecting free markets from government “encroachment.” They said they were fighting for capitalism and freedom.

But historically, capitalism has never been just one thing: Adam Smith’s eighteenth-century vision of a democratic, distributed marketplace populated by small bankers and businessmen was a far cry from the industrial capitalism that developed in early nineteenth-century England and Germany—with its cruel “Satanic mills”—or the monopolies and managerial capitalism that came to dominate America in the late nineteenth century, much less the globally financed capitalism that emerged at the end of the twentieth century. China has liberalized its markets while continuing to oppress and even murder its ethnic and religious minorities. There are many capitalisms. American market fundamentalists fight for a form of capitalism that is both brutal and ignorant: that brushes aside market failure, anticompetitive practices, and external costs, in part by denying the facts of science, the facts of history, and the necessary role of government in making capitalism work.19

The question is not whether government should set limits that prevent individual autonomy from producing collective harm, the question is where we draw the lines. That is not an economic question, it is a political one. Market fundamentalists have managed to distract from the political aspects of these decisions and frame them as questions of “economic freedom.” Thus, a reasonable response to climate change is rejected as unreasonable “government encroachment.”

All this may make one wonder: was this ever reallyabout capitalism? Or freedom? Or was it all just one long, semi-continuous, shape-shifting defense of the prerogatives of big business? Of freedom for capital and capitalists? Or had the market fundamentalists spent so much time defending the magic of the market- place that they simply couldn’t accept market failure on a global scale? To accept the enormity of what climate change portended for civilization was to accept that capitalism, as practiced, was undermining the very prosperity it was supposed to deliver. And not just in some distant future, butnow.

ref bib...

===

ebell raga sob story goliath sez massive industry backing for w-m, mention uscap

==

 hr 2454, ati ~

American Clean Energy and Security Act  also tried in 2009 (gore testified)

===

The American Coalition for Clean Coal Electricity (ACCCE),a front group group financed by the biggest coal mining and coal-based utility companies in America, spent more than $92 million during the first two years of the Obama administration, much of it on lobbying and advertising against bills like Waxman Markey. The group gained infamy when one of its consulting firms was caught forging over a dozen letters from local NAACP groups and senior citizens to key lawmakers, asking them to oppose the bill.

One of the recipients of the ACCCE’s largesse was none other than one of Blue Line’s two partners, Michael Meehan. While Meehan led Blue Line’s pro-cap and trade effort, he also served as vice president to an online marketing firm called Virilion. Disclosures show that Virilion, which also rented office space to Blue Line, helped ACCCE manage its anti–cap and trade marketing budget in exchange for $19 million during the two years in which the legislation was debated.

The conflict was complicated by the fact that Meehan, and his partner, David DiMartino, had been employed by an infamous polluter lobbying firm only months prior to taking up the cap-and-trade job. The pair had worked for the BGR Group, a lobbying firm founded by former Republican National Committee chair Haley Barbour, up until the month they were hired by the coalition of environmental groups. While Blue Line worked closely with the Obama administration and its liberal allies, Blue Line maintained a “strategic partnership” with BGR, which at the time counted coal-fired utility giant Southern Company as a major client.

Of course, this conflict of interest was not the only reason Waxman Markey failed. Senator Harry Reid could have written reconciliation rules into the January 2009 budget in order to pass it with fifty-one votes. President Obama could have been more forceful. The lazy traditional media that failed to report on climate crisis, pervasive corruption in Congress, Citizens United providing polluters a greater bludgeon to defeat reform politicians, the USCAP coalition that saddled legislation with industry giveaways and poison pills, the unprecedented lobbying by polluters, the collapse of moderates within the GOP—there are many, many reasons why a climate bill did not pass. But let’s be clear: reformers had issues from the inside as well.

UPDATE: Someone close to the Waxman Markey reform efforts e-mailed to note that in addition to the coalition money spent on field, individual advocacy groups, including the Sierra Club and several other green groups, spent an undisclosed amount on their own grassroots organizing that would bring the total above the $900,000 referenced above. Still, disclosures show the coalition Clean Energy Works spent a disproportionate amount on advertising and media consultants. lee f?

===

 theda uscap: Following months of intricate bargaining, USCAP forces scored an initial, hardfought

success when, on June 29, 2009, the House of Representatives passed the

Waxman-Markey “American Clean Energy and Security” bill by a vote of 219 to 212.

Supporters were elated, but they got a big shock almost at once as oppositional lobbying

and media campaigns went into overdrive and fierce grassroots Tea Party protests broke

out. During the summer Congressional recess, telegenic older white protestors carrying

homemade signs appeared at normally sleepy “town hall” sessions to harangue

Congressional Democrats who supported health reform as well as the Waxman-Markey

bill. Protests were bolstered by generously funded advertising campaigns targeted on

Senators who would be asked to decide about cap and trade bills in the fall. In hasty

response, cap and trade supporters threw together a national “war room” and public

3

relations campaign. They plowed ahead toward what they hoped would be a bipartisan

deal in the Senate.

all: 

 ===

theda:

My interlocutor had played a major role in efforts to get Congress to pass “cap

and trade” legislation during 2009 and 2010. Hefty DC players had worked together in

the U.S. Climate Action Partnership (otherwise known as USCAP), a coalition of

business chieftains and leaders of big environmental organizations that was publicly

launched in 2007 to push legislation to place acap on carbon emissions and create an

open market for energy producers to trade allowances under the cap. Once legislated,

caps were meant to be slowly ratcheted down in future decades, so U.S. companies and

citizens would have an incentive to use less carbon-based energy and invest in green

technologies. This “cap and trade” approach was seen by supporters as a quintessentially

market-oriented way to nudge the vast U.S. economy through a gradual transition to

reliance on sources of energy that would do less damage to the climate.

:{The model

originated with economists looking to harness market forces}: and found some favor with

major corporations and Republicans, so it seemed to be a good bet for building bipartisan

coalitions in Congress.1 Votes from some Republicans would be essential, because votes

for carbon caps would be hard to find among Democrats representing states with strong

coal or oil sectors or states heavily reliant on electricity generated in coal-fired plants.

To many savvy players, prospects for a legislative push for cap and trade looked

excellent during and right after the presidential campaign of 2008. Versions of this

approach were touted not just by the Democratic nominee and eventual victor Barack

2

Obama, but also by the 2008 Republican standard-bearer, John McCain – who was one of

the favorite GOPers among big environmentalists, because he had repeatedly cosponsored

carbon-control bills. Environmentalists who favored cap and trade presumed

that John McCain would be on their side – it was just a question of when they could make

it possible for him to play a pivotal role in forging a bipartisan deal in the Senate. With

Democratic president Barack Obama moving into the White House in early 2009 and

Democratic House and Senate leaders pledged to act on climate legislation, the time

looked ripe to move full speed ahead. On January 15, 2009, USCAP leaders issued a

meticulously negotiated blueprint for a new cap and trade system and geared up for nonstop

lobbying to get legislation through Congress.2

Visions danced in their heads of a

celebratory White House signing ceremony nicely timed to tee up U.S. leadership in the

next international climate confab scheduled for December 2009 in Copenhagen.

Following months of intricate bargaining, USCAP forces scored an initial, hardfought

success when, on June 29, 2009, the House of Representatives passed the

Waxman-Markey “American Clean Energy and Security” bill by a vote of 219 to 212.

Supporters were elated, but they got a big shock almost at once as oppositional lobbying

and media campaigns went into overdrive and fierce grassroots Tea Party protests broke

out. During the summer Congressional recess, telegenic older white protestors carrying

homemade signs appeared at normally sleepy “town hall” sessions to harangue

Congressional Democrats who supported health reform as well as the Waxman-Markey

bill. Protests were bolstered by generously funded advertising campaigns targeted on

Senators who would be asked to decide about cap and trade bills in the fall. In hasty

response, cap and trade supporters threw together a national “war room” and public

relations campaign. They plowed ahead toward what they hoped would be a bipartisan

deal in the Senate. p 3

But one coalitional effort after another fell apart in late 2009 and early 2010, as

putative Senate compromises came and went. In July 2010,Senate Leader Harry Reid

finally pulled the plug when it became clear that no variant of cap and trade or any other

kind of energy legislation had any prospect of coming close to the 60 votes needed to

clear his chamber’s filibuster bar.During this pivotal year,:{ Republicans, including longtime

supposed friends of the environmental movement like John McCain, simply melted

away; and in the end GOP Senators unanimously refused to support of any variant of cap

and trade}:.3 In public opinion polls, Americans registered increased wariness about

government action on carbon caps – with public worries stoked by opponents claiming

that new taxes and regulations would cost jobs, reduce family incomes, and stifle

businesses struggling to recover from the Great R

---

exerpt:

Impact on Copenhagen Climate Change Conference

It was reported that the passage of ACES [W-M] in Congress would increase the likelihood that a successor to the Kyoto Protocol would be adopted at the United Nations Climate Change Conference 2009 in Copenhagen. The Guardian US environment correspondent noted that ACES passing the US House of Representatives "delivers an important boost to the prospects of reaching an agreement for international action on climate change at Copenhagen this year."^[47] The NYTimes noted that "the German chancellor, Angela Merkel, who was in Washington on Friday to meet with Mr. Obama, strongly endorsed the bill even though it fell short of European goals for reducing the emissions of heat-trapping gases."^[2]

---

https://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act

1/22

The American Clean Energy and Security Act of 2009 (ACES) was an energy bill in the 111th United States Congress (H.R. 2454) that would have established a variant of an emissions trading plan similar to the European Union Emission Trading Scheme. The bill was approved by the House of Representatives on June 26, 2009 by a vote of 219–212, but was never brought to the floor of the Senate for discussion or a vote.^[1][2][3]

The House passage of the bill was the "first time either house of Congress had approved a bill meant to curb the heat-trapping gases scientists have linked to climate change."^[4]

The bill was also known as the Waxman-Markey Bill, after its authors, Representatives Henry A. Waxman of California and Edward J. Markey of Massachusetts, both Democrats. Waxman was at the time the chairman of the Energy and Commerce Committee, and Markey was the chairman of that committee's Energy and Power Subcommittee.

---

The American Clean Energy and Security Act of 2009 (ACES) is an energy bill in the 111th United States Congress (H.R. 2454) that would establish a variant of an emissions trading plan similar to the European Union Emission Trading Scheme. The bill was approved by the House of Representatives on June 26, 2009 by a vote of 219-212, and is still in consideration in the Senate.^[1]

This vote was the "first time either house of Congress had approved a bill meant to curb the heat-trapping gases scientists have linked to climate change."^[2]

The bill is also known as the Waxman-Markey Bill, after its authors, Representatives Henry A. Waxman of California and Edward J. Markey of Massachusetts, both Democrats. Waxman is the chairman of the Energy and Commerce Committee, and Markey is the chairman of that committee's Energy and Environment Subcommittee.

Internationally, the House's passage of the ACES bill "established a marker for the United States when international negotiations on a new climate change treaty begin later this year."^[2] Hearings on the draft of the legislation took place the week of April 20, 2009 and the bill was passed by the House on June 26, 2009. However, in July 2010 it was reported that the Senate would not consider climate change legislation before the end of the legislative term.^[3]

Summary of provisions

The bill proposes a cap and trade system, under which the government sets a limit (cap) on the total amount of greenhouse gases that can be emitted nationally. Companies then buy or sell permits to emit these gases, primarily carbon dioxide (CO₂₎. The cap is reduced over time to reduce total carbon emissions. The legislation would set a cap on total emissions over the 2012–2050 period and would require regulated entities to hold rights, or allowances, to emit greenhouse gases. After allowances were initially distributed, entities would be free to buy and sell them (the trade part of the program). Those entities that emit more gases face a higher cost, which provides an economic incentive to reduce emissions. Key elements of the bill include:^[4]

• Requires electric utilities to meet 20% of their electricity demand through renewable energy sources and energy efficiency by 2020.
• Subsidizes new clean energy technologies and energy efficiency, including renewable energy ($90 billion in new subsidies by 2025), carbon capture and sequestration ($60 billion), electric and other advanced technology vehicles ($20 billion), and basic scientific research and development ($20 billion).
• Protects consumers from energy price increases. According to estimates from the Environmental Protection Agency, the reductions in carbon pollution required by the legislation will cost American families less than a postage stamp per day.
• It sets a slightly higher target for reductions in emissions of carbon dioxide, methane, and other greenhouse gases than that proposed by President Barack Obama. The bill requires a 17-percent emissions reduction from 2005 levels by 2020; Obama has proposed a 14 percent reduction by 2020. Both plans would reduce United States' emissions by about 80 percent by 2050. Complementary measures in the legislation, such as efforts to prevent tropical deforestation, will achieve significant additional reductions in carbon emissions.
• It includes a renewable electricity standard (almost identical to a renewable portfolio standard, but narrowly tailored to electrical energy) requiring each electricity provider who supplies over 4 million MWh to produce 20 percent of its electricity from renewable sources (such as wind, solar, and geothermal) by 2020. There is a provision whereby 5% of this standard can be met through energy efficiency savings, as well as an additional 3% with certification of the Governor of the state in which the provider operates.

Alternative compliance payments are $25/MWh in violation of the standard, adjusted for inflation beginning in 2010.

• It provides for modernization of the electrical grid
• It provides for expanded production of electric vehicles and other advanced automobile technology.
• It mandates significant increases in energy efficiency in buildings, home appliances, and electricity generation.

The bill's cap-and-trade program allocates 85% of allowances to industry for free, auctioning the remainder.^[5] The revenue from these allowances will be used to finance conservation of tropical forests abroad and to support low-income households.^[6] 30% of the allowances will be allocated directly to local distribution companies (LDCs) who are mandated to use them exclusively for the benefit of customers. 5% will go to merchant coal generators and others with long-term power purchase agreements.

[CBO analysis

A study in June 2009 by the non-partisan Congressional Budget Office (CBO) indicated that the bill would be roughly deficit-neutral for the government over the next decade:^[7]

"...enacting the legislation would increase revenues by $873 billion over the 2010-2019 period and would increase direct spending by $864 billion over that 10-year period. In total, CBO and JCT estimate that enacting the legislation would reduce future budget deficits by about $4 billion over the 2010-2014 period and by about $9 billion over the 2010-2019 period..."

The study also indicated that the tax burden on individual households would be limited:^[8]

"...the net annual economy-wide cost of the cap-and-trade program in 2020 would be $22 billion—or about $175 per household...households in the lowest income quintile would see an average net benefit of about $40 in 2020, while households in the highest income quintile would see a net cost of $245. Added costs for households in the second lowest quintile would be about $40 that year; in the middle quintile, about $235; and in the fourth quintile, about $340. Overall net costs would average 0.2 percent of households’ after-tax income."

The analysis did not attempt to quantify the environmental benefits of reduced greenhouse gas emissions. The report also stated that the "net financial impact of the program on households in different income brackets would depend in large part on how many allowances were sold (versus given away), how the free allowances were allocated, and how any proceeds from selling allowances were used. That net impact would reflect both the added costs that households experienced because of higher prices and the share of the allowance value that they received in the form of benefit payments, rebates, tax decreases or credits, wages, and returns on their investments." In other words, while a cap and trade system imposes costs on high emitters, it can generate revenues for low emitters that sell permits to them. While the government sets the bar on emission levels, the market determines who gains and who loses.

Public debate

Supporters of and arguments for the bill

The bill is supported by a number of environmental organizations including, the Defenders of Wildlife,^[9] the Alliance for Climate Protection,^[10] the Environmental Defense Fund,^[11][12][13] the National Wildlife Federation,^[14] The Nature Conservancy,^[15][16] the Audubon Society,^[17] the Natural Resources Defense Council^[18] and the Sierra Club.^[19] The League of Conservation Voters has threatened to withhold endorsements from any Representative who votes against the bill.^[20] In addition to environmental organizations the Energy and Commerce Committee received letters of support from a broad range of organizations, including the United Auto Workers, Exelon, General Electric, Dow Chemical Company, Pacific Gas and Electric Company, and DuPont^[12] The New York Times noted that "industry officials were split, with the United States Chamber of Commerce and the National Association of Manufacturers opposing the bill and some of the nation’s biggest corporations, including Dow Chemical and Ford, backing it."^[2]

The Republicans for Environmental Protection (REP), a national grassroots organization, issued a press release after the vote stating "House passage today of the American Clean Energy and Security Act is a step in the right direction in the fight against dangerous climate change and for developing cleaner, more secure energy resources."^[21] David Jenkins, REP vice president for government and political affairs, noted that "Doing nothing is not an option. The costs and risks of failing to limit greenhouse gas emissions are too high. We owe it to our country and to our country's future citizens to take action. Today, the House looked to the future and did the right thing for our economy, security, and environment."^[21]

The Environmental Protection Agency (EPA) estimated the discussion draft version of the bill to cost average households $98–$140 per year. A preliminary update of this study says that the changes "would likely result in lower allowance prices, a smaller impact on energy bills, and a smaller impact on household consumption."^[22]

Economist Paul Krugman argued for the bill in September 2009, while attacking the bill's opponents: "It’s important, then, to understand that claims of immense economic damage from climate legislation are as bogus, in their own way, as climate change denial. Saving the planet won’t come free (although the early stages of conservation actually might). But it won’t cost all that much either."^[23] During May 2009, he argued that a cap and trade system is better than a carbon tax. He explained how the incentives work:"Even when polluters get free permits, they still have an incentive to reduce their emissions, so that they can sell their excess permits to someone else. That’s not just theory: allowances for sulfur dioxide emissions are allocated to electric utilities free of charge, yet the cap-and-trade system for SO2 has been highly successful at controlling acid rain."^[24]

[edit] Arguments against the bill

Criticism has focused on ultimate costs and benefits of the plan. A report written for the Heritage Foundation on the discussion draft of the bill claims that the economy would react to this cap-and-trade system like it would to an energy crisis.^[25] This same report also claimed that the impact on global temperature by the end of the 21st century would amount to a reduction of no more than 0.2° Celsius.

Economist Arnold Kling said the bill "maximizes rent-seeking (favoritism toward particular businesses) and minimizes carbon reduction".^[26] Other economists have argued that the bill will create significant financial costs. The Wall Street Journal accused the Congressional Budget Office (CBO) of significantly underestimating the bill's ultimate costs, pointing out supposed flaws in its calculations. The Wall Street Journal also suggested that the bill's costs would disproportionately affect lower-income households, for which the CBO estimates did not account.^[27] The New York Times reported that the bill's provisions to levy tariffs on Chinese imports due to carbon emissions could provoke a trade war.^[28] The Competitive Enterprise Institute argued that the bill was essentially the "largest tax hike in world history".^[29] The American Petroleum Institute, which represents the petroleum and natural gas industry, said the bill would place "disproportionate burden on all consumers of gasoline, diesel fuel, heating oil, jet fuel, propane and other petroleum products", and by 2035, it would cause gasoline prices in excess of $4.00 per gallon by today's standards.^[30]

Nuclear power plants generate minimal greenhouse gases, yet one critic wrote that the bill does not sufficiently advocate this clean power source. In response to this criticism, House of Representatives staff members wrote that the electricity generated by nuclear power requires the purchase of far fewer allowances than other forms of electricity generation; that the bill provides various types of financial support to build clean energy generating sources, including nuclear; and that an EPA study indicated that twice as many nuclear plants would be built if the law is passed versus the status quo.^[31]

There is criticism that unless China and India adopt similar emissions standards, the impact on global climate will be insubstantial. This is largely an argument based on the leading role these two countries have obtained in carbon dioxide emissions which could reach 34% of the global total by 2030.^[32]

Critics also note that the bill would create the largest market in carbon in the world. It would also "open up the so-called 'sub-prime carbon' market in carbon offsets, whereby industries can claim emissions reductions by investing in various projects around the world that theoretically reduce greenhouse gas emissions. The Government Accountability Office (GAO) claims it's virtually impossible to verify whether carbon offsets represent real emissions reductions.^[33]"

On June 26, 2009, Reuters reported that "[s]tates that have set the U.S. agenda on addressing greenhouse gas emissions are lining up behind a federal climate bill, fearing signs of dissent would weaken a plan that still faces hurdles"^[34] The article noted that representatives from members of the Eastern U.S. 10-state Regional Greenhouse Gas Initiative, the Midwestern Greenhouse Gas Reduction Accord, which joins six U.S. states with Canada's Manitoba, and the 11-state-and-four Canadian province Western Climate Initiative were supporting the legislation, even though the Eastern market member states, which have already been operating under a cap-and-trade system, "would lose a direct revenue stream of hundreds of millions of dollars if the federal plan were passed."^[34] The three existing regional carbon cap and trade programs, which are in varying states of development, would likely be merged into the national plan, since "the federal 'cap-and-trade' plan pre-empts any similar state scheme from 2012 to 2017."^[34] However, ACES leaves states the option of resuming trade of pollution credits after 2017 and "would allow holders of RGGI allowances to convert them into federal allowances, which means the states will likely hold auctions until the federal plan begins.^[34]

Citizens Against Government Waste named both Reps. Waxman and Markey the May 2009 Porkers of the month for "adding and altering provisions to placate special interests and buy the votes of appropriately skeptical members of Congress".^[35]

[ Debate among environmental organizations and scientists

While the Environmental Defense Fund^[13] and many other environmental organizations strongly support the bill, other environmentalists have sharply criticized the legislation in its present form as too weak and have called urgently for it to be amended so as to include additional and more vigorous measures to protect climate and natural resources.

Some environmentalists have criticized the fuel efficiency standards in the "cash for clunkers" provision of the bill, because new cars would only need to get 22 MPG to be considered fuel efficient.^[36][37] New SUVs and pickup trucks would only need to get 18 MPG to be considered fuel efficient.^[38] Vehicles older than 25 years are not eligible for the program. CNN reported that "One of the biggest criticisms is that it's not very environmentally friendly."^[39]

The New York Times has noted that "while some environmentalists enthusiastically supported the legislation, others, including Greenpeace and Friends of the Earth, opposed it."^[2] Friends of the Earth, an international environmental organization, announced its opposition to ACES believing the bill to be too weak and cited support from Shell Oil Company and Duke Energy as evidence of the bill's shortcomings.^[40] Environmental organizations critical of the bill say the bill falls short by allowing for 85 percent or more of pollution permits to be given away free of cost to the electricity sector. A coalition of environmental groups released a statement saying that "to craft a bill that allows for 2 billion tons of offsets per year — roughly equivalent to 27 percent of 2007 U.S. greenhouse gas emissions — is to allow for continued and dangerous delay in real action by our country at a time when the world is looking to the U.S. for leadership on climate change."^[41] Critics of the bill about it not going far enough, claim that there were too many concessions made in rewriting the bill and that they gave into special interests.^[42] Thus, making the bill weak and potentially harmful to the economy and environment.^[43]

Dr. James E. Hansen, one of the first to warn about the risks of climate change and an advocate of taking related action, also has argued strongly against the bill: 1) It restricts the EPA's ability to regulate CO₂ emissions from power plants; 2) it sets "meager" targets for emission reductions, with only a 13% reduction by 2020; 3) it lacks certain controls important to the trading of allowances to emit carbon; and 4) fails to set predictable prices for carbon, making it harder for businesses and households to make investment decisions. Dr. Hansen advocates a carbon tax rather than a cap and trade system.^[44] Alternatively, Senators Maria Cantwell and Susan Collins have introduced the Carbon Limits and Energy for Americas Renewal (CLEAR) Act. This bill proposes a Cap and Dividend approach in which 75% of the revenue goes to tax payers and the rest to development of renewable energy. ^[45]

[Media response

News agencies Reuters & Agence France-Presse and United Kingdom newspaper The Guardian reported the narrow passage of the 'historic'^[46][47] legislation in the House, regarding the vote to be a 'major'^[46][48] and 'hard-fought'^[46] victory for President Obama, while an Associated Press article, carried by the Canadian Broadcasting Corporation, reported the vote to be "a triumph for [the] U.S. President."^[49]

The New York Times commented that "the House legislation reflects a series of concessions necessary to attract the support of Democrats from different regions and with different ideologies. In the months of horse-trading before the vote Friday, the bill’s targets for emissions of heat-trapping gases were weakened, its mandate for renewable electricity was scaled back, and incentives for industries were sweetened."^[2] Business Week emphasized its perceived significance of the legislation and its passage in the House, declaring "June 26, 2009, will go down as an historic moment in world’s efforts to tackle climate change. For the first time, a Congressional body passed legislation that would place mandatory limits on the emissions of the greenhouse gases that cause global warming."^[50]

[ Impact on Copenhagen Climate Change Conference

It was reported that the passage of ACES in Congress would increase the likelihood that a successor to the Kyoto Protocol would be adopted at the United Nations Climate Change Conference 2009 in Copenhagen. The Guardian US environment correspondent noted that ACES passing the US House of Representatives "delivers an important boost to the prospects of reaching an agreement for international action on climate change at Copenhagen this year."^[47] The NYTimes noted that "the German chancellor, Angela Merkel, who was in Washington on Friday to meet with Mr. Obama, strongly endorsed the bill even though it fell short of European goals for reducing the emissions of heat-trapping gases."^[2]

[ Legislative history

It was offered as a "discussion draft" in the House Committee on Energy and Commerce on March 31, 2009.^[51] A final version of the legislation was introduced on May 15, 2009 by the same title, assigned bill number H.R. 2454.^[52]

On May 21, 2009, the bill passed out of the Energy and Commerce Committee by a vote of 33-25, largely falling along political party lines.^{[citation needed]}

[ Energy and Commerce Committee markup

Republicans proposed over 400 amendments to the bill, the majority of which many think were proposed to delay passage.^[53] Some of the more prominent from both parties are listed below:

[] Accepted

• John Dingell (D-MI) offered an amendment that establishes a bank to assist with loans for clean energy development.
• Betty Sutton (D-OH) offered an amendment establishing a "Cash for Clunkers" program, giving $3,500 or $4,500 toward the purchase or lease of more fuel efficient vehicles if anyone trades in qualifying, less-efficient vehicles.
• Kathy Castor (D-FL) offered an amendment giving states the ability to adopt feed-in tariffs for renewable energy as defined in the bill.
• Henry Waxman (D-CA) offered an amendment creating a classification of "central procurement state" that allows existing renewable energy legislation passed by states before January 1, 2009 to supersede some provisions of the bill.

[ Defeated

• Mike Rogers (R-MI) offered an amendment that would have cancelled the Act unless China and India adopt similar standards.
• Roy Blunt (R-MO) offered an amendment that would have cancelled the Act if the average price of electricity in a residential sector increases by 10% or more. After defeat, he offered a second amendment that would have cancelled only Title III (the cap-and-trade plan) of the Act if residential electricity prices rise by 20%. After defeat of this measure, George Radanovich (R-CA) offered a similar amendment that would have cancelled only Title III if electricity prices in the residential sector rise by 100%. This measure was also defeated. In the hearing, Bart Stupak (D-MI) called into question the seriousness of these "message amendments." He stated they are only offered to be used by the Republicans to spur sensational headlines about lack of sympathy by Democrats. Ranking Member Joe Barton (R-TX) responded that they were indeed "message amendments" to the American people in an attempt to convey that supporters of the bill care nothing about cost to the ratepayer.
• Lee Terry (R-NE) offered an amendment that would have cancelled the Act if average gas prices reach $5 per gallon.
• Fred Upton (R-MI) offered an amendment that would have suspended the Act if the nation's unemployment rate for the prior year reaches 15% as a result of the Act.
• Marsha :{Blackburn:(style="background-color:#ffff66;"):}: (R-TN) offered an amendment that would have required the U.S. Environmental Protection Agency‎ (EPA) to label energy bills, food, manufactured products and fuels with the price impact this law has on the item.
• Cliff Stearns (R-FL) offered an amendment that would have removed existing nuclear power from the baseline of the Renewable Electricity Standard. (This amendment would have potentially reduced the overall implementation of renewable energy under this act by around 20%, the amount of nuclear electricity generation in the United States).^[54]

By the end of May 20, 2009, 2 Republican and 24 Democratic amendments had been adopted. 15 Republican amendments had been defeated. No amendment sponsored by a Democrat had yet been defeated.

[] Rules Committee resolution

At 3:47 AM on June 26, 2009, H.Res. 587 was reported to the house,^[55] which amended H.R. 2454, adding to the bill. This resolution was passed by the house just hours later at 11:21 AM. Republicans complained that neither the public nor the Representatives were given adequate time to study the 310-page amendment.^[56] Markey refuted Rush Limbaugh's assertion that the bill was not available at all, saying the bill was available to read on the internet and at the reading clerk's desk since the 3:47 AM reporting.^[57]

[] Final debate and floor vote

Speaker Nancy Pelosi scheduled the vote for June 26, 2009.^[58] The week leading up to the vote was marked by courting moderate Republicans and on-the-fence Democrats from rural and coal districts to support the legislation in what was expected to be a close vote.^[59] On the day of the vote, Democrats were still working to ensure they had the votes needed to pass the bill. Republicans tried to pull back their proposed amendments, realizing they were giving the Democrats more time to corral votes, however, they were unable to pull their proposed amendments off the floor.^[59] Shortly before the vote, John Boehner read aloud to the House from most of the 300 page Manager's amendment that was filed at 3:09AM on the day of the vote.^[60][61] He voiced opposition to the practice of changing bills in the middle of the night before the vote, and concern that the Manager's amendment made substantial changes to the bill. He did not want the House to vote on the bill before the members could learn what was in the amendment, so he read much of it aloud. Manager's amendments are supposed to be for clerical changes only, not substantive ones. Patrick J. Kennedy (D-RI) returned from rehab to cast an 'Yes' vote, and Ellen Tauscher (D-CA) delayed resigning the House to vote for the legislation as well.^[60]

The bill was approved by the House by a vote of 219-212, with 8 Republicans supporting, and 44 Democrats voting against, and 3 members not voting.^[62] All Representatives present at the time of the vote had cast votes. Jeff Flake (R-AZ), Alcee Hastings (D-FL), and John Sullivan (R-OK) missed the vote due to 'a family conflict,' travel abroad in Albania, and 'alcohol addiction treatment,' respectively.^[63]

Democratic votes against largely came from freshman in Republican-leaning seats, conservative "blue dog" democrats, as well as Democrats from areas dependent on coal for electricity or areas with large numbers manufacturing jobs.^[2][62][64] However, some Democrats from liberal districts, like Pete Stark (CA) voted against the bill because he considered the bill 'watered-down.'^[65] Dennis Kucinich (D-OH) voted against the bill because he considered the bill 'too-weak' and opposed offsets, among other similar criticisms.^[66]

Republicans supporting the bill included Army Secretary nominee John M. McHugh and moderate Republican Main Street Partnership caucus members Mary Bono Mack (R-CA), Mike Castle (R-DE), Dave Reichert (R-WA), Mark Kirk (R-IL), Leonard Lance (R-NJ), Frank LoBiondo (R-NJ).^[62] Kirk and Castle are also members of the Republicans for Environmental Protection caucus.

[] Required annual reductions in GHG emissions

The table below summarizes the required GHG emission reductions (benchmark is 2005 emission levels)^[67]:

[ See also

• Carbon Pollution Reduction Scheme
• Low-carbon fuel standard
• Low carbon power generation
• Regional Greenhouse Gas Initiative

[References

1. ^ http://www.opencongress.org/bill/111-h2454/actions_votes
2. ^ ^a(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-nyt_1-0) ^b(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-nyt_1-1) ^c(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-nyt_1-2) ^d(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-nyt_1-3) ^e(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-nyt_1-4) ^f(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-nyt_1-5) ^g(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-nyt_1-6) Broder, John (2009-06-26). "House Passes Bill to Address Threat of Climate Change". New York Times. http://www.nytimes.com/2009/06/27/us/politics/27climate.html?_r=1&hp. Retrieved 2009-06-27. 
3. ^ Hulse, Carl; Herszenhorn, David M. (2010-07-22). "Democrats Call Off Climate Bill Effort". The New York Times. http://www.nytimes.com/2010/07/23/us/politics/23cong.html.:{ }:
4. ^ Summary-House of Representatives-July 2009
5. ^ Stone, Andy (2009-06-24). "A Winner In The New Climate Legislation". Forbes. http://www.forbes.com/2009/06/24/climate-carbon-cap-and-trade-business-energy-carbon.html. Retrieved 2009-07-04. 
6. ^ "Tropical Forest Conservation in Waxman Markey". Stevenson, Andrew. June 9, 2009. Retrieved August 28, 2009.
7. ^ CBO Analysis of Waxman-Markey June 2009
8. ^ CBO-Analysis of Waxman-Markey-June 2009
9. ^ Defenders of Wildlife Action Center
10. ^ 3cdn.net
11. ^ Climate 411 » Why This Is the Pivotal Climate Vote of Our Lives, Environmental Defense Fund
12. ^ ^a(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-Committee2454_11-0) ^b(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-Committee2454_11-1) energycommerce.house.gov
13. ^ ^a(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-EDF9854_12-0) ^b(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-EDF9854_12-1) Key Features of the American Clean Energy and Security Act, - Environmental Defense Fund
14. ^ NWF View National Wildlife Federation
15. ^ Climate Change - Climate Change: Climate Change Bill Heads to the House Floor The Nature Conservancy
16. ^ Carbon Cap: Who Supports It?, Environmental Defense Fund
17. ^ Audubon: Issues & Actions, Audubon Society
18. ^ Switchboard, from NRDC :: Michael Oko's Blog :: Climate and Energy Legislation: "Now is the Time to Act", Natural Resources Defense Council
19. ^ The Economist-Waiting for the Other Shoe to Drop-September 2009
20. ^ LCV: No endorsement for climate bill foes - Glenn Thrush, POLITICO.com
21. ^ ^a(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-REP626_20-0) ^b(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-REP626_20-1) Press Releases, Republicans for Environmental Protection (REP America)
22. ^ Samuelsohn, Darren (2009-05-19). "Revised House climate bill carries smaller price tag, EPA report says". New York Times. http://www.nytimes.com/gwire/2009/05/19/19greenwire-revised-house-climate-bill-carries-smaller-pri-19116.html. Retrieved 2009-05-20. 
23. ^ NYT-Paul Krugman-It's Easy Being Green-September 24,2009
24. ^ NYT-Paul Krugman-The Perfect, The Good, The Planet
25. ^ "The Economic Impacts of Waxman-Markey". The Heritage Foundation. 2009-05-13. http://www.heritage.org/Research/EnergyandEnvironment/wm2438.cfm. Retrieved 2009-05-14. 
26. ^ The Obama Pattern, The Atlantic, June 26, 2009.
27. ^ The Cap and Tax Fiction, The Wall Street Journal, June 26, 2009.
28. ^ Possible Plan for Tariffs on Imports From China Remains Alive in House Climate Bill, The New York Times, June 24, 2009.
29. ^ Trojan Hearse, The New York Post, June 25, 2009.
30. ^ Letter to Congress, American Petroleum Institute, June 23, 2009.
31. ^ Huffington Post-Steve Kirsch-Waxman-Markey: Three Unanswered Questions
32. ^ "International Energy Outlook, Chapter 7". Energy Information Administration. June 2008. http://www.eia.doe.gov/oiaf/ieo/pdf/emissions.pdf. Retrieved 2009-05-20. 
33. ^ Good News, There's a Climate Bill — Bad News, It Stinks, The Institute for Policy Studies, May 19, 2009
34. ^ ^a(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-gardner_33-0) ^b(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-gardner_33-1) ^c(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-gardner_33-2) ^d(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-gardner_33-3) Gardner, Timothy; Henderson, Peter (2009-06-26). "Green states lining up behind U.S. climate change bill". Reuters. http://www.reuters.com/article/environmentNews/idUSTRE55P6KF20090627. Retrieved 2009-06-27. 
35. ^ "Reps. Henry Waxman and Edward Markey CAGW’s May Porkers of the Month". Citizens Against Government Waste. May 2009. http://www.cagw.org/site/News2?page=NewsArticle&id=11276. Retrieved 2009-07-11. ^{[dead link]}
36. ^ Belson, Ken (May 6, 2009). "Congress Close on ‘Cash for Clunkers’". The New York Times. http://wheels.blogs.nytimes.com/2009/05/06/congress-close-on-cash-for-clunkers/?hp. Retrieved April 23, 2010. 
37. ^ "Dems Finally Stop Pretending Cash-for-Clunkers Is an Environmental Bill". Washington Independent. May 19, 2009. http://washingtonindependent.com/43628/dems-finally-stop-pretending-cash-for-clunkers-is-an-environmental-bill. 
38. ^ Crawley, John (June 2, 2009). "Senate set to consider plan to boost auto sales". Reuters. http://www.reuters.com/article/politicsNews/idUSTRE5515YB20090602?feedType=RSS&feedName=politicsNews.:{ }:
39. ^ Willis, Gerri; Finance, Personal (June 10, 2009). "Money for your gas guzzler". CNN. http://money.cnn.com/2009/06/10/pf/saving/cash_for_clunkers. 
40. ^ Friends of the Earth U.S.
41. ^ redd-monitor.org^{[unreliable source?]}
42. ^ Power, Stephen (2009-06-27). "Impact of 'Offsets' to Limit Emissions Is Uncertain". Wall Street Journal. http://online.wsj.com/article/SB124605745731563541.html. Retrieved 2009-06-27. 
43. ^ http://theclean.org^{[unreliable source?]}
44. ^ Hansen, James (2009-07-09). "G-8 Failure Reflects U.S. Failure on Climate Change". The Huffington Post. http://www.huffingtonpost.com/dr-james-hansen/g-8-failure-reflects-us-f_b_228597.html. Retrieved 2010-01-10. 
45. ^ Eilperin, Juliet (2010-04-12). "CLEAR Act delivers, study says". The Washington Post. http://views.washingtonpost.com/climate-change/post-carbon/2010/04/clear_act_delivers_study_says.html. Retrieved 2010-05-05. 
46. ^ ^a(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-afphistoric_45-0) ^b(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-afphistoric_45-1) ^c(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-afphistoric_45-2) AFP: US House passes historic climate change bill:
47. ^ ^a(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-Guardian27_46-0) ^b(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-Guardian27_46-1) Goldenberg, Suzanne (2009-06-27). "Barack Obama's US climate change bill passes key Congress vote". London: The Guardian. http://www.guardian.co.uk/environment/2009/jun/27/barack-obama-climate-change-bill. Retrieved 2009-07-07. 
48. ^ House passes landmark climate change bill, Reuters
49. ^ U.S. House passes climate change bill, Canadian Broadcasting Corporation
50. ^ House Passes Carbon Cap-and-Trade Bill - BusinessWeek
51. ^ "Chairmen Waxman, Markey Release Discussion Draft of New Clean Energy Legislation". Committee on Energy and Commerce. 2009-03-31. http://energycommerce.house.gov/index.php?option=com_content&task=view&id=1560&Itemid=1. Retrieved 2009-04-04. 
52. ^ "Chairmen Waxman and Markey Introduce "The American Clean Energy and Security Act"". Committee on Energy and Commerce. 2009-05-15. http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1622:chairmen-waxman-and-markey-introduce-the-american-clean-energy-and-security-act&catid=155:statements&Itemid=55. Retrieved 2009-05-19. 
53. ^ "Waxman Seeks Bipartisan Help in Passing Climate Bill". Bloomberg. 2009-05-18. http://www.bloomberg.com/apps/news?pid=20602099&sid=aCOW1G1GFgAQ&refer=energy. Retrieved 2009-05-20. 
54. ^ "U.S. Electricity Generation Fuel Shares". Nuclear Energy Institute. April 2009. http://www.nei.org/resourcesandstats/documentlibrary/reliableandaffordableenergy/graphicsandcharts/uselectricitygenerationfuelshares. Retrieved 2009-05-21. 
55. ^ "House actions on H.R. 2454". http://thomas.loc.gov/cgi-bin/bdquery/z?d111:HR02454:@@@S.:{ }:
56. ^ "EPW Republicans to Majority: American Public Deserves to Know What Is In the Global Warming Bill". 2009-07-07. http://www.epw.senate.gov/public/index.cfm?FuseAction=Minority.PressReleases&ContentRecord_id=567bcb03-802a-23ad-43b2-c9ad4c60bf02. 
57. ^ Richert, Catharine. "Limbaugh claims the climate bill wasn't written when it came up for a vote". Politifact, St. Petersburg Times.. http://www.politifact.com/truth-o-meter/statements/2009/jul/09/rush-limbaugh/limbaugh-claims-climate-bill-wasnt-written-when-it. Retrieved June 29, 2009. 
58. ^ O'Connor, Patrick (June 23, 2009). "Nancy Pelosi to bring climate change bill to floor". Politico. http://www.politico.com/news/stories/0609/24068.html. Retrieved 2009-07-02. 
59. ^ ^a(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-politico32_58-0) ^b(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-politico32_58-1) http://www.politico.com/news/stories/0609/24232.html
60. ^ ^a(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-cqpolitics_59-0) ^b(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-cqpolitics_59-1) http://www.cqpolitics.com/wmspage.cfm?docid=news-000003154783
61. ^ http://www.realclearpolitics.com/video/2009/06/26/house_gop_leader_boehner_filibusters_cap-and-trade_bill.html
62. ^ ^a(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-House_vote_61-0) ^b(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-House_vote_61-1) ^c(http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act#cite_ref-House_vote_61-2) Roll call vote 477, via Clerk.House.govl
63. ^ http://thehill.com/leading-the-news/rep.-kennedy-returns-for-climate-vote-2009-06-26.html
64. ^ http://www.swingstateproject.com/
65. ^ The Online Office of Congressman Pete Stark - STATEMENT OPPOSING WATERED-DOWN GLOBAL WARMING LEGISLATION:
66. ^ Dennis Kucinich Lays Out Why He Voted Against Clean Energy Act, Cleveland Leader
67. ^ Summary of Clean Energy and Security Act http://thomas.loc.gov/cgi-bin/bdquery/z?d111:HR02454:@@@D&summ2=m&

Retrieved from "http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act"

Categories: 111th United States Congress | United States proposed federal legislation | Emissions trading | Renewable-energy economy | Climate change law

http://en.wikipedia.org/wiki/American_Clean_Energy_and_Security_Act

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nyer

Meanwhile, the House bill, known as Waxman-Markey (for Edward J. Markey, of Massachusetts), passed on June 26, 2009, by a vote of 219-212. Eight Republicans supported it. But there were omens for the Senate. The White House and Waxman spent the final days before the vote negotiating with members of the House representing two crucial interest groups: coal and agriculture. Despite cutting generous deals, they ended up with only limited support. Worse, several members who had promised House Speaker Nancy Pelosi their votes reneged. One of them, Ciro Rodriguez, of Texas, ducked into the chamber, quickly cast a no vote, and then sprinted out. Anthony Weiner, a Brooklyn Democrat and one of Pelosi’s whips, chased after him, yelling, “Ciro! Ciro!”

As the scene unfolded on the floor, Rosengarten and other Senate aides watched from the gallery. Rosengarten turned to a colleague and said, “Now it’s our turn. We’ve got to go pass this thing in the Senate.”

===

BS

https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and

==

The Economic Consequences of Waxman-Markey: An Analysis of the American Clean Energy and Security Act of 2009August 6, 2009 34 min read Download Report

Authors:

David Kreutzer, Nicolas Loris[who will speak for the greed?], Ben Lieberman, Karen Campbell and William Beach

After a truncated debate and last-minute changes, the House of Representatives narrowly passed climate-change legislation on June 26, 2009, designed by Henry Waxman (D-CA) and Edward Markey (D-MA). The 1,427-page bill would restrict greenhouse gas emissions from industry, mainly carbon dioxide from the combustion of coal, oil, and natural gas.

Since energy is the lifeblood of the American economy, 85 percent of which comes from CO2-emitting fossil fuels, the Waxman-Markey bill represents an extraordinary level of economic interference by the federal government. For this reason, it is important for policymakers to have a sense of the economic impact that accompanies any environmental benefits.[1]

Analysis by The Heritage Foundation's Center for Data Analysis (CDA) makes clear that Waxman-Markey promises serious perils for the American economy for the years and decades ahead. Waxman-Markey requires arbitrary and severe restrictions on the current energy supply and infrastructure. These restrictions can be met only through large-scale deployment of still-undeveloped or uneconomical technologies [CCS?] and alternative energy sources.In addition to the direct impact on consumers' budgets through higher electric bills and gasoline prices, the resultant increase in energy costs will reverberate throughout the economy and inject unnecessary inefficiencies at virtually every stage of production.It would suppress economic activity and reduce employment, especially in the manufacturing sector. Virtually all costs would eventually filter down to the American people.

Get exclusive insider information from Heritage experts delivered straight to your inbox each week. Subscribe to The Agenda ]

[lost jobs]

Waxman-Markey extracts trillions of dollars from the energy-using public and delivers this wealth to various groups--some of whom may be more deserving than others, and some who are simply better at lobbying. That could mean low-income households in an attempt to compensate them for sharply higher energy costs, or regulated industries that have effectively lobbied for compliance assistance. In any event, cap-and-trade allowances are a tax and would be the largest tax increase in recent history.

The recent experience with ethanol-use mandates illustrates the costs and unanticipated (at least by proponents) problems with a federal intervention in energy markets. However, Waxman-Markey represents a vastly more complex and comprehensive scheme,which suggests that the scope and intensity of unintended effects could be greater than either proponents or critics of Waxman-Markey currently anticipate. In addition, Europe's experience with climate-change laws similar to Waxman-Markey strongly suggests both high costs and uncertain emissions reductions.

Overview

Waxman-Markey imposes strict limits on the emissions of six greenhouse gases (GHGs) with the primary emphasis on carbon dioxide (CO2). The mechanism for capping these emissions requires regulated emitters to acquire federally created permits (allowances) for each ton emitted. The allowances have the economic effect of a tax--energy users will, of course, have to pay for the energy itself, and will also have to pay for the rights to use it if its production involved one of the regulated greenhouse gases. The increase in energy costs stemming from paying for these permits to emit creates correspondingly large transfers of income from private energy consumers to special interests: the federal government collects the revenues from the sale of the allowances and redistributes them to individuals and groups (businesses included) that are listed in the legislation.

Implementing the Waxman-Markey legislation will be very costly, even given the rather optimistic assumptions about how effective it will be in reducing CO2 emissions and how accommodating the economy will be to the added energy costs. The Heritage Foundation's dynamic analysis of these economic costs are summarized as follows (adjusted for inflation to 2009 dollars):

• Cumulative gross domestic product (GDP) losses are $9.4 trillion between 2012 and 2035;
• Single-year GDP losses reach $400 billion by 2025 and will ultimately exceed $700 billion;
• Net job losses approach 1.9 million in 2012 and could approach 2.5 million by 2035. Manufacturing loses 1.4 million jobs in 2035;
• The annual cost of emissions permits to energy users will be at least $100 billion by 2012 and could exceed $390 billion by 2035;
• A typical family of four will pay, on average, an additional $829 each year for energy-based utility costs;and
• Gasoline prices will rise by 58 percent ($1.38 more per gallon) and average household electric rates will increase by 90 percent.

This CDA analysis extends only to 2035, as this is the forecasting horizon for the macroeconomic model used to prepare these estimates. But it should be noted that the emissions reductions continue to tighten through 2050 and that model-based analysis by other groups whose models extend beyond 2035 shows increasing harm to the U.S. economy.

In addition to burdening households, the high energy prices weaken the production side of the economy. Contrary to the claims of an economic boost from "green" investment as firms undertake the changes to reduce emissions and increased employment as so-called green jobs are created to do this work, Waxman-Markey would be a significant net drain on GDP and employment.

Description of the Legislation

Waxman-Markey is a cap-and-trade bill. It caps greenhouse gas emissions from regulated entities beginning in 2012. At first, each power plant, factory, refinery, and other regulated entity will either be allocated allowances (rights to emit) for six greenhouse gases, or be made to purchase these allowances, or some combination of the two. In the early years, most of the allowances will be given away. Perhaps one result of the ill-conceived last-minute changes is that for some years there are promises to distribute more than 100 percent of the available allowances to various interest groups. However, Heritage analysts assume, as do the bill writers, that most emitters will need to purchase at least some allowances. Note that whether allowances are sold or given away had no effect on the energy cost increases, which are caused by the constraint on supply.

Emitters who reduce their emissions below their annual allotment can sell their excess allowances to those who do not--the trade part of cap and trade. Over time, the cap is ratcheted from a 3 percent reduction of 2005 levels (the base year for measuring and mandating future GHG reductions) by 2012 to an 83 percent reduction by 2050.

Effects on Industry

Waxman-Markey affects some industries more than others. Some industries are undoubtedly more energy-intensive and thus hit harder by higher energy prices. Particularly alarming is the damage that Waxman-Markey inflicts on America's manufacturing base. By 2035, the last year of the simulation, durable manufacturing employment will have lost 1.17 million jobs. Nondurable manufacturing losses reach almost 210,000 jobs by 2035. Combined, manufacturing employment averages 389,000 less than the baseline between 2012 and 2035, hitting a high of 1.38 million lost jobs in 2035. [[1]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_1ftn1)

Other industries experience the effects of higher energy prices as well. The fabricated-metal industry will see jobs drop by an average of more than 51,000 below the baseline and 216,000 below by 2035. The machinery industry will shed 263,000 jobs by 2035. Plastic and rubber products employment falls 33,000 jobs below the baseline on average as a result of Waxman-Markey and is 80,000 below business-as-usual in 2035, the last year of the simulation. The employment-services industry faces substantial losses, reaching 428,000 in 2035 and averaging 93,000 fewer jobs than the baseline from 2012 to 2035.

Two other industries adversely affected by this cap-and-trade legislation are transportation and trade. With cap-and-trade regulation, retail-trade unemployment increases by 276,000 in 2035, with a yearly average loss of 78,000, while wholesale trade unemployment increases by 400,000 in 2035, and 191,000 on average each year. The trade, transportation, and utilities sector losses reach 1.1 million jobs by 2035 and 441,000 for the yearly average. Transportation and warehousing employment drops 383,000 by 2035 and has an average yearly loss of 175,000 jobs.

Because agriculture is energy intensive, it would be disproportionately burdened by Waxman-Markey.Higher gasoline and diesel fuel prices, higher electricity costs, and higher natural-gas-derived fertilizer costs all erode farm profits, which are expected to decline by 28 percent in 2012 and average 57 percent lower through 2035.

Also noteworthy are the effects on gas stations, which tend to be small businesses. Employment in the gas station industry is an average 33,000 jobs below the baseline every year from 2012 through 2035.

The model also includes an industry-production index. An industry-production index is a composite measure of the output produced by each of the companies within an industry. Roughly, the index is created by a weighted average of the total output by each company within an industry divided by the base year's weighted average total.[[2]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_1ftn2) The index is based on a common year and, therefore, provides a comparable measure of increases or decreases in an industry's output over time.

Of all the industries modeled, only a handful showed increases in output under Waxman-Markey.[[3]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_1ftn3) Most decreased, and the set of industries whose output fell the most include:

• durable goods,
• railroad equipment,
• miscellaneous manufacturers,
• motor vehicles and parts,
• light truck and utility vehicles,
• electrical equipment, appliances, and components,
• communications equipment, computers, and electronics,
• engines and turbines,
• metalworking machinery,
• construction,
• agricultural equipment,
• glass and glass products,
• rubber and plastic products,
• medical equipment and supplies, and
• mining and its support activities.

[[1]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_1ftnref1)The term "baseline" refers to the projections of the U.S. economy's future between 2009 and 2035 without the Waxman-Markey legislation becoming law. This baseline does contain all of the enacted energy legislation by this and previous Congresses. For example, the baseline used in this CDA Report contains the current law about fuel efficiency standards and the development of alternative energy sources.

[[2]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_1ftnref2)For a more precise description of production indices as well as the methodology used to compile them, see "Studies in Methods--Index Numbers of Industrial Production," Series F, No. 1, United Nations Statistics Division, Department of Economic and Social Affairs, 2008, at /static/reportimages/77E656BDAEE6C880CDEA33D88F389D15.pdf (July 24, 2009).

[[3]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_1ftnref3)Those industrial groupings that increase are: leather and allied products; bags and coated and treated paper; semiconductors; newspapers and misc. publishers; periodicals; books; and cutlery and hand tools. The first most likely reflects a consumer switch from synthetically produced materials that require relatively more emissions. There is a broad applicability of semiconductors along with a need to find new technological processes. Newspapers and other media may historically be somewhat inversely related to unemployment as less work time may increase the demand for reading material both for leisure and education. Cutlery and hand tools may be driven by more labor-intensive processes, rather than motorized processes.

Allowance Giveaways

President Obama's budget proposal suggested a 100 percent auction of the emission allowances, forcing companies to bid on the right to emit. In order to get the Waxman-Markey cap-and-trade bill through the House Energy and Commerce Committee, however, Members of Congress promised generous handouts for various industries and special interests. In the near term, the legislation promises to distribute 85-101 percent of the allowances to various interest groups at no cost. The percentages for each industry decrease over time.

Electric Utilities. The biggest winners are the electric utilities, receiving 43.75 percent of the emission allowances in 2012 and 2013. The free allowances fall to 38.89 percent in 2014 and 2015, and 35 percent from 2016 through 2025. Beginning in 2026, the freely distributed allowances fall by 7 percent per year, until they reach zero by 2030. Small local-distribution electric companies are given 0.5 percent of the allowance value from the enactment of the bill through 2025; it is then reduced by 0.1 percent until it reaches zero. Energy-efficient cogeneration facilities receive 0.35 percent in the first year, but nothing after that.

Energy Sectors. The natural gas industry receives 9 percent of the allowances beginning in 2016, until they are reduced by 1.8 percent per year beginning in 2026. The handouts reach zero in 2030. For home heating oil and propane consumers, only 1.88 percent of the allowances are given in years 2012 and 2013. This decreases to 1.67 percent for the next two years, and to 1.5 percent from 2016 through 2025. After this they are phased out by 0.3 percent each year. Oil refiners receive 2 percent of the allowances from 2014 through 2026. On top of this, small business refineries will receive 0.25 percent from 2014 to 2026.

Protecting the Poor. The bill stipulates that the revenues from 15 percent of the allowances sold at auction will go to low-income consumers.

Trade-Affected Industries. Energy-intensive and "trade-exposed" industries will undoubtedly be at a competitive disadvantage in relation to companies in other countries that do not put a price on carbon emissions. To mitigate this result, the bill gives 2 percent of the allowances to affected industries for the first two years of the bill's enactment, which increases to 15 percent beginning in 2014, and then slowly phases them out to zero by 2035.

[ghg?]

Transitioning to Cleaner Energy. To invest in clean technology and renewable energy, 10.05 percent of the free allowances are set aside beginning immediately in 2012. The majority of these allowances will go to State Energy and Environmental Development (SEED), which allows state energy offices to allocate the revenue to specified energy efficiency and renewable energy programs. A small portion, 0.5 percent, goes toward more energy-efficient building codes. The free allowances fall to 7.05 percent for 2016 and 2017, 6.03 percent for 2018 to 2021, 1.53 percent for 2022 to 2025, rises back to 8.58 percent from 2026 to 2029, and remains at 5.03 percent thereafter. The auto industry receives 3 percent of the allowances from 2012 to 2017, and 1 percent from 2018 to 2025.

Universities, institutions, and any "Clean Energy Innovation Center," which will study energy-efficient building systems and designs, are awarded 1.05 percent of the allowances beginning in 2012 and lasting until 2050. Eight energy-innovation hubs at universities, private research entities, industry sites, or state institutions that focus on clean-energy technology will receive 0.45 percent of allowances from 2012 through 2050. Worker-assistance programs receive 0.5 percent of the allowances from 2012 through 2021, and 1 percent for 2022 through 2050. For the year 2012 only, 1 percent is designated to early actors, which rewards those who have already taken approaches to reduce carbon dioxide emissions, such as no-till farming and planting trees. The allowance revenue would only be available for entities that publicly stated and reported greenhouse gas reduction goals and demonstrated net reductions. The allowances cover only "reduction activity" that took place between January 1, 2001, and January 1, 2009. To foster the deployment of carbon capture and sequestration (CCS), a relatively untried process that reduces the amount of carbon dioxide emissions from industrial facilities, the bill allocates 1.75 percent of the emission allowances from 2014 through 2017, 4.75 percent from 2018 to 2019, and 5 percent from 2020 through 2050 for installing and operating CCS technologies.

Supplemental Reduction. From 2012 to 2025, 5 percent of the allowance revenue will be allocated for supplemental reduction, such as for funding international forestry products. This falls to 3 percent in 2026, to 2 percent in 2031, and continuing through 2050. Supplemental agriculture and renewable energy receive 0.28 percent of the handouts beginning in 2012 and ending in 2016.

Adaptation Efforts. Domestic adaptation efforts to protect humans, landscapes, and wildlife affected by climate change receive 0.9 percent of the allowances from 2012 through 2021, growing to 1.9 percent in 2022 and to 3.9 percent in 2027. Specifically, 0.1 percent of the allowance handouts will go to the Climate Change Health Protection and Promotion Fund from 2012 to 2050 to protect the health of humans affected by climate change; 0.385 percent and 0.615 percent go to wildlife and natural-resource adaptation distributed to states and the Natural Resources Climate Change Adaptation Fund, respectively. These percentages increase to 0.770 and 1.23, respectively, for the years 2022 to 2026, and increase again to 1.54 percent and 2.46 from 2027 to 2050.

International adaptation to increase resilience as well as reduce vulnerability to climate change and international deployment of clean-energy technologies receive 1 percent each from 2012 to 2021, increasing to 2 percent each year beginning in 2022, and increasing again to 4 percent from 2027 through 2050.

Macroeconomic Simulation Overview

In a market-based economy, most effects of a policy are transmitted through price signals that are driven by changes in consumption and production decisions at the micro level. The aggregate impact these changes have on the economy is based on how these price signals interact with other markets and shift the economy's resources. Moving below the baseline means that the economy is operating less efficiently and that, therefore, the resources in the economy were better utilized under the baseline scenario than under the new policy.

Heritage analysts used the IHS Global Insight long-term macroeconomic model of the U.S. economy to estimate the effects of the Waxman-Markey bill on the overall economy.[[2]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_ftn2) The simulation was implemented by changing variables in the macroeconomic model according to the changes predicted by a microeconomic model of the energy sector maintained by the CDA (see the section describing the CDA energy model below). In order to estimate the policy impact, three main pieces needed to be simulated: (1) price effects, (2) energy-efficiency (demand) effects, and (3) allowance revenue and allocation effects.

The policy changes in Waxman-Markey affect pro­ducer prices in the energy sectors directly through the cost of purchasing allowances and offsets as well as through changes in production needed to reduce emissions.[[3]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_ftn3) The energy model estimated the change in energy production prices and retail energy prices. These prices were matched with their corresponding variables in the macroeconomic model to estimate the effect these price changes would have on the overall economy.

The energy model projects changes in fuel efficiency and changes in total highway fuel consumption. The corresponding macroeconomic model variables were changed. The effect of these changes helps mitigate some of the total increased consumer expenditure on fuel.

The macroeconomic model does not have specific variables corresponding to the alternative renewable fuel sources in the CDA energy model. The macroeconomic simulation takes into account the increase in domestic alternative-fuel sources by adjusting the amount of imported fuel.

The last piece of the simulation is the allowance revenue component. As discussed above, the value of permits equals the entire value of these permits as government revenue, regardless of whether they are formally auctioned. As much as possible, the revenue allocations followed the details in Henry Waxman and Edward Markey's May 14, 2009, memo "Proposed Allowance Allocation."[[4]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_ftn4) Any unallocated allowance revenue remained in the federal government's general consumption variable and was thus allocated by the model in ways consistent with the historical pattern of government spending.[[5]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_ftn5)

The Waxman-Markey Energy Model

To meet the emissions reduction goals of Waxman-Markey, the price of fossil-fuel energy must increase enough to drop the quantity demanded to the target levels. The allowance price is the tax on fossil-fuel energy that causes the price to increase. The allowance tax will be determined as refiners, electric companies, natural gas distributors, and certain other energy users bid against each other for the allowances. As the allowance price increases, these bidders will find it increasingly difficult to pass the costs on to the ultimate consumers, thus they bid for fewer allowances. This, in turn, restricts the amount of fossil fuel that will be consumed and determines the added price consumers must pay for energy.

The amount of CO2 emitted per unit of energy generated depends on the type of fuel used. The energy model used by the Center for Data Analysis is based on the IHS Global Insight energy module and adds the appropriate cost to each energy source for various allowance prices.[[6]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_ftn6)

Further, the model incorporates estimates of user responses to price changes (demand elasticity) for natural gas, petroleum products, coal, and electricity. Following a well-known pattern, this responsiveness to price changes grows over time.

In the CDA model, the allowance prices for all years are adjusted until the aggregate amounts of CO2 emissions from all fuels reaches the target emissions for that year. To account for offsets, the targets are increased by 15 percent above the caps for every year. In the early years, the business-as-usual emissions are greater than the allowances alone, but less than the allowances plus offsets. For those years, the allowance price is set at the estimated world clearing price for offsets--$20 per ton. Beyond the year 2018, the offsets limits are reached and the allowance price rises as the caps become tighter. The allowance price exceeds $120 per ton of CO2 by 2035.

The Economic Costs of Waxman-Markey

The Waxman-Markey bill affects the economy directly through higher prices for carbon-based energy, which reduces quantity demanded and, thus, the quantity supplied of energy from carbon fuels. Energy prices rise because energy producers must pay a fee for each ton of carbon they emit. The fee struc­ture is intended to create an incentive for producers to invest in technologies that reduce carbon emissions during energy production. The bill's sponsors and supporters hope that the fees are sufficiently high to create a strong incentive and demand for cleaner energy production and for the widespread adoption of carbon capture and sequestration technology.

The economic model that CDA analysts used to estimate the bill's broad economic effects treats the fees as a tax on energy producers. Thus, energy prices increase by the amount of the fee or tax. The demand for energy, which largely determines the consumption and, thus, the taxes collected, responds to higher energy prices both directly and indirectly. The direct effect is a reduction in the consumption of carbon-based energy.

The indirect effects are more complex. Generally speaking, the carbon fees reduce the amount of energy used in producing goods and services, which slows the demand for labor and capital and reduces the rate of return on productive capital. This "supply-side" impact exerts the predictable secondary effects on labor and capital income, which depresses consumption.[[7]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_ftn7)

These are not unexpected effects. Carbon-reduc­tion schemes that depend on fees or taxes attain their goals of lower atmospheric carbon by slowing carbon-based economic activity. Producers and consumers respond to the carbon taxes both by switching to less carbon-intensive production and consumption and by simply reducing production and consumption.

The Heritage study assumes that renewable electricity generation (not including conventional hydro) and biofuels grow by a factor of four between 2010 and 2035. The baseline used in the Heritage analysis already includes significant increases in wind energy, solar power, ethanol, biodiesel, and biomass-derived energy. So, the economic impacts are in addition to the costs of these large baseline increases in alternative energy supply.

With the combined impact of these responses, policymakers can expect results similar to the following economic effects:[[8]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_ftn8)

Economic Output Declines. The broadest measure of economic activity is the change in GDP after accounting for inflation. GDP measures the dollar value of all goods and services produced in the United States during the year for final sale to consumers. The changes that Waxman-Markey causes in GDP are a broad measure of the altered pattern of all other economic variables.

The initial shock of higher energy prices reduces GDP by nearly $200 billion in each of the first few years. As always, markets strive to counter shocks. Because of the generosity of the offsets, the carbon constraints do not further tighten until 2018 and markets move GDP closer to the higher baseline levels. However, after 2018 the carbon limits put ever increasing pressure on energy markets and GDP losses grow each year. Though the annual losses decrease somewhat after 2032, the Waxman-Markey impact continues to destroy more than $600 billion of GDP value every year until the end year of the Heritage analysis (2035).

Driving energy prices higher is a fundamental feature of cap and trade. It is the higher price of fossil-fuel energy (85 percent of U.S. energy) that forces firms and households to use less of it. There is no allowance-distribution scheme that can lower overall energy costs. Though some allowances given to regulated electric utilities may, at least initially, lower prices for their customers, this would undermine the necessary conservation and force greater costs on other consumers. There will be no net energy price reductions. Further, allowances given to unregulated firms will simply go to the bottom line and not to consumers.

In aggregate, the GDP losses for 2012 to 2035 are $9.4 trillion even after adjusting for inflation.

This slowdown in GDP is seen more dramatically in the slump in manufacturing output. Indeed, by 2020, manufacturing output in this energy-sensitive sector is 2 percent below what it would be if Waxman-Markey never becomes law. By 2035, the manufacturing sector has lost $585 billion in output when compared to the CDA baseline; that is, when compared to the economic world without Waxman-Markey.

Number of Jobs Declines. Though lost GDP is the broadest measure of the economic impact, it often seems a remote measure. Looking beneath the surface of GDP shows the economic reactions to the legislation that led up to the drop in output. The change in employment is one such reaction.

Instead of creating jobs, Waxman-Markey is a job destroyer. Compared to the baseline (a no-Waxman-Markey world), the average year has 1.1 million fewer people working. By 2035, this Waxman-Markey jobs deficit has risen to nearly 2.5 million lost jobs.

The job losses are widely, but not evenly, distributed. For instance, the construction industry loses 8.5 times as many of its jobs than the economy as a whole. The job-loss rate for the textile industry is more than 7.8 times the rate of overall job loss; 4.4 times the overall rate for manufacturing; 5.9 for durable manufacturing; 5.3 for paper products; and 7.1 for wood products.

Because the distribution of energy-intensive jobs across the country is unequal, some states and congressional districts will be hit particularly hard. Notable among the most adversely affected states throughout the duration of the bill are: Wisconsin, Indiana, Minnesota, Iowa, New Hampshire, North Carolina, South Carolina, Idaho, and Alabama. Some states, such as Wyoming, North Dakota, Colorado, and Nebraska are most adversely affected when the policy first takes effect, while other states, such as Michigan, Ohio, and Tennessee, are among the hardest-hit states by 2035.[[9]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_ftn9)

Energy Prices Rise. The policy-induced higher energy prices, which signal the constraint of energy, are the root cause of the slower economy. As Chart 5 shows, consumer prices for electricity, natural gas, and home heating oil increase significantly between 2015 and 2035. Indeed, by 2035, the total energy bill for a family of four is $1,200 higher than it would be otherwise. Between 2012 and 2035, the total increase in expenditure on energy is nearly $20,000. This increase occurs not only after adjusting for inflation, but also after households have adjusted as well as possible to the higher energy prices.

By 2035, Waxman-Markey causes electricity prices to rise 90 percent over and above the rise that would have occurred anyway. By turning thermostats down in winter and up in summer; by purchasing more energy-efficient, but more expensive, appliances; by adding more insulation to houses; by living in smaller houses; and by manifold other changes, U.S. energy consumption is cut by more than 30 percent. Nevertheless, even these cuts are not sufficient to fully offset the price increase for electricity. The net effect is that a family of four will spend $468 more on electricity alone because of Waxman-Markey.

Incomes and Consumption Decline. Higher energy prices also drive up production costs, which must be reflected in product prices. Since higher prices reduce quantities sold, producers produce less. In turn, workers and investors earn less, and household incomes decline. The especially sharp income and employment reductions in the energy-intensive sectors spread and cause declines in demand for other sectors of the economy.

The CDA simulation captures this effect of higher energy prices. Consumption outlays by individuals and house­holds follow the pattern of lower income. In 2012, consumption expenditures are $129 billion lower than they would be in an economic world in which Waxman-Markey is not the law. By 2030, the drop in consumption expenditures reaches $357 billion--$3,823 less per family of four.

Taxes Increase. The allowances created by Waxman-Markey to restrain CO2 emissions do not create economic value, which is another way of saying that the allowances do not improve the material well-being of Americans. Instead, they are a form of taxation and will be one of the largest taxes collected by the federal government.[[10]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_ftn10) This tax created by Waxman-Markey will collect $5.7 trillion over the period 2012 to 2035--at a cost of thousands of dollars per year per family.

National Debt Grows. Because the Waxman-Markey cap-and-trade tax reduces income, it reduces the revenues collected from other taxes, such as personal and corporate income taxes. And because the revenue collected from Waxman-Markey is spent, the net effect is to increase the national debt. By 2035, Waxman-Markey will have added 9.1 trillion nominal dollars to the national debt, which amounts to an increased tax liability of $12,803 for every American, or a $51,216 liability for a family of four in today's (2009) dollars.

Climate Impact Does Not Register. Because of market-driven increases in energy efficiency, CO2 emissions have grown more slowly than has national income for decades in the United States.[[11]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_ftn11) Contrasted with the moderating growth of American CO2 emissions, those of the developing world, especially China and India, have been accelerating. China is now the world's largest emitter of CO2. Because the developing world is so populous and because large segments are finally experiencing the rapid economic growth that perverse economic policies had previously stifled, the growth in CO2 emissions will swamp the cuts proposed in the U.S. by Waxman-Markey.

Climatologists estimate that Waxman-Markey's impact on world temperature will be too small to even measure in the first several decades. The theoretical moderation of world temperature would be 0.05 degree centigrade by 2050. If CO2-emission levels meet the Waxman-Markey target of 17 percent of 2005 emissions by the year 2050, and if they are frozen at that level for the rest of the century, Waxman-Markey would still reduce the world temperature by only 0.2 degree Celsius by 2100.

Cost to Americans: Hundreds--or Thousands?

Analyses of the economic impact of Waxman-Markey fall into two basic categories: (1) studies that show annual economic costs to be a few hundred dollars per family per year; and (2) others showing family costs measured in thousands of dollars per year.

These two notable "postage stamp" studies come from the EPA and the Congressional Budget Office.[[1]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_2ftn1) The EPA asserts that Waxman-Markey will reduce household consumption by $98 to $140 per year throughout the duration of the policy. What is never mentioned by those trumpeting this number is what it really means.

First, the EPA employs a technique from the financial world called "discounting" to reduce the value. For example, the EPA estimates that the inflation-adjusted cost per household in 2050 will be $1,287. However, after this value is discounted to the present, the cost is $140 per household.[[2]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_2ftn2) Note that discounting is not done to adjust for inflation--that has already been done. Present-value discounting is a technique for comparing the value of money paid at different points in time. If a household must pay $1,287 in 2050, the $140 represents the amount that household would have to pay into an interest-bearing account today so that the interest would allow it to grow to $1,287 by 2050. Discounting can be a legitimate tool for cost-benefit and investment analysis where costs and benefits are paid and benefits received at different times. Thus, both are discounted to the same point in time and compared. Without discounted environmental impacts for comparison, using the technique, here, does little except undercount the cost that families will actually be paying in 2050.

Second, the EPA measures consumption, not income. The broadest and best measure of cost is lost income--lost GDP. Consumption only comes after taxes and savings are deducted. Ignoring lost savings and lost payments for government services underestimates the costs by about 40 percent.

Third, the EPA measures cost per household. Households are not necessarily families. One person living alone counts as a household, as do three single people sharing an apartment. The EPA uses the average household size of 2.6 people. Converting from this EPA household size to a family of four adds more than 50 percent to the cost estimate.

So, the EPA's $174 cost per household is actually above $2,700 (even after adjusting for inflation) when presented as lost income per family of four. This is not a postage stamp per day.

The CBO study,on the other hand, does not even attempt a comprehensive measure of lost income and it explicitly states so in footnote 3 of its report.[[3]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_2ftn3) In addition, the CBO study assumes that government expenditure of one dollar is the same as not taxing that dollar. Finally, the CBO created an artificial year (2020 in terms of a 2010 economy), which allows it to project a lower tax cost in the first place because the baseline in 2010 is lower than the baseline in 2020. The CBO's methodology effectively measures the administration costs of collecting and distributing the allowances rather than the full economic cost.

Analysts from across the ideological spectrum who estimate comprehensive measures of lost income due to Waxman-Markey find costs that are also measured in thousands of dollars per year. The Heritage estimate for lost GDP in 2020 is $161 billion, which translates to nearly $1,900 per family of four. The CRA International study (conducted for the National Black Chamber of Commerce) and a Brookings Institution study both project costs that translate to about $5,000 per family of four.[[4]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_2ftn4)

[[1]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_2ftnref1)Environmental Protection Agency, "EPA Analysis of the American Clean Energy and Security Act of 2009 H.R. 2454 in the 111th Congress," June 23, 2009, at http://www.epa.gov/climatechange/economics/pdfs/HR2454 _Analysis.pdf (July 25, 2009), and Congressional Budget Office, "The Estimated Costs to Households from the Cap-and-Trade Provisions of H.R. 2454," June 19, 2009, at http://www.cbo.gov/ftpdocs/103xx/doc10327 /06-19-CapAndTradeCosts.pdf (July 25, 2009).

[[2]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_2ftnref2)EPA, p. 13.

[[3]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_2ftnref3)CBO, p. 4.

[[4]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_2ftnref4)David Montgomery et al., "Impact on the Economy of the American Clean Energy and Security Act of 2009 (H.R.2454)," CRA International, May 2009, at http://www.nationalbcc.org/images/stories/documents/ CRA_Waxman-Markey_%205-20-09_v8.pdf (July 25, 2009), and Warwick McKibbin, Pete Wilcoxen, and Adele Morris, "Consequences of Cap and Trade," Brookings Institution, June 8, 2009, at :{[http://www.brookings.edu /_{/media/Files/events/2009/0608}_climate _change_economy/20090608

_climate _change_economy.pdf](https://www.heritage.org/static/reportimages/F5D63B7E20BA4FAAA0425BEE49B0F5E5.pdf)}: (July 25, 2009).

Conclusion

The Waxman-Markey bill proposes a new national tax of historic proportions. Though levied directly on carbon-based energy, the tax's impact spreads through the economy, increasing prices, reducing income, destroying jobs, and significantly expanding the national debt.

As with many policies coming from Washington these days, the Waxman-Markey bill seeks to "level the playing field" by making a more competitive player weaker, in this case hamstringing carbon-based energy sources, rather than ensuring an environment where less competitive players can become stronger. This policy hurts everyone, including alternative-energy investors, because it uses resources less efficiently, which creates deadweight losses. This means there will be underused resources leading to fewer opportunities in the future as slower growth reduces the resources available to help power the research and development investments that will create the technologies of the future.

As President Obama said about his cap-and-trade program during the presidential election campaign, "electricity prices would necessarily skyrocket."[[12]](https://www.heritage.org/environment/report/the-economic-consequences-waxman-markey-analysis-the-american-clean-energy-and#_ftn12) The same applies to many other prices as the Waxman-Markey energy tax spreads through the economy. Businesses and consumers will adapt as well as possible to these higher prices. They will spend more for less energy. They will build smaller houses and buildings. They will drive smaller, less safe vehicles. They will turn thermostats up in the summer and down in the winter. They will divert income to more expensive energy-saving appliances. But these activities and more will not be enough to offset the higher energy costs. The net effect is lower income, higher prices, and fewer jobs.

In particular, the Heritage analysis projects that by 2035:

• Gasoline prices will rise 58 percent (or $1.38) above the baseline forecast, which already contains price increases;
• 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 to pay $1,241 more for energy costs per year;
• Including taxes, a family of four will pay $4,609 more 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;
• Job losses will be nearly 2.5 million; and
• The national debt will rise an additional $12,803 per person.

(All figures are in constant 2009 dollars.)

All of these costs will be paid for 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. Saddling the next generation with higher prices, higher debt, less income, fewer jobs, and more taxes does not seem like a worthy legacy--especially when the purported environmental benefits are so small they can barely be measured.

David W. Kreutzer, Ph.D., is Senior Policy Analyst for Energy Economics and Climate Change in the Center for Data Analysis; Karen A. Campbell, Ph.D., is Policy Analyst in Macroeconomics in the Center for Data Analysis; William W. Beach is Director of the Center for Data Analysis; Ben Lieberman is Senior Policy Analyst in Energy and the Environment in the Thomas A. Roe Institute for Economic Policy Studies; and Nicolas D. Loris is a Research Assistant in the Thomas A. Roe Institute for Economic Policy Studies, at The Heritage Foundation.

Appendix 1: Methodological Appendix

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