Bad Idea

New legislation for Global Warming: Warner-Lieberman. [Link]

The Environmental Protection Agency estimates that this meddling would cause a cumulative reduction in the growth of GDP by between 0.9% and 3.8% by 2030. Add 20 years, and the reduction is between 2.4% and 6.9% – that is, from $1 trillion to $2.8 trillion.

These estimates assume that electricity prices will increase by 44% above what they would otherwise be by 2030. They also assume that existing coal-fired power plants, which currently provide about 50% of U.S. electric power, will be shut down – to be replaced with at least 150% growth in new nuclear facilities, plus other "alternatives." Yet there are only 104 current U.S. nuclear plants, and the industry itself says it's optimistic to think even 30 more can be built by 2020.

In fact, it is pointless to project so far out over multiple decades, since no one knows how markets and consumers would respond, whether the rules would remain constant, or what new technologies might come along. While moralizing about America, most of Europe has failed to meet its mandatory cap and trade goals under the Kyoto Protocol. But the U.S. isn't Italy; we will enforce our laws. So our guess is that these cost estimates are invariably far too low.

In a bow to this reality, California Democrat Barbara Boxer last week introduced 157 pages of amendments to Warner-Lieberman. Most notably, she sets aside at least $800 billion through 2050 for consumer tax relief. So while imposing a huge new tax on all Americans, she vouchsafes to return some of the money to some people. Needless to say, the Senator will be the judge of who receives her dispensation.

Ms. Boxer's amendment shows that cap and trade is also a massive wealth redistribution scheme – all mediated by her and her fellow Platonic rulers. Oh, and she also includes an "emergency off-ramp," should costs prove too onerous. This is really a political "off-ramp" to make Warner-Lieberman seem less dangerous, but you can imagine her reaction if some future Republican President decided to take it.

The upshot is that trillions in assets and millions of jobs would be at the mercy of Congress and the bureaucracy, all for greenhouse gas reductions that would have a meaningless impact on global carbon emissions if China and India don't participate. And only somewhat less meaningless if they do.

We'll destroy our economy, but we'll be green.