Midlands Voices: Costly cap-and-trade tax won’t slow global warming

The writer, of Hastings, Neb., was a petroleum geologist for more than 50 years.

Global warming is now a political reality, and we must come to grips with it.

Although there is a lack of credibility to the claim that man-made emissions contribute to global warming, we are facing a charged political issue that has far-reaching economic implications for the United States.

As Congress considers clamping a cap-and-tax on the emission of carbon dioxide and other so-called greenhouse gases — a tax that will undoubtedly cost American consumers plenty — it should make sure that any commitments do not place the United States at an economic disadvantage.

A good start would be to consider what the rest of the world is doing to reduce emissions.

Remember the Kyoto Protocol on climate change? More than a decade after 38 industrial countries signed the agreement with a pledge to restrain their release of heat-trapping gases, emissions today are even higher than they were then, according to the United Nations body charged with overseeing efforts on global emission reduction.

Case in point: Despite the added costs of Europe’s cap-and-trade system, which is similar to the legislation being considered by Congress, emissions there have crept up about 1 percent a year since 2005. During the same period in the United States, emissions bounced up and down in response to changing economic conditions.

A bigger problem is that major developing countries, led by China and India, refuse to commit to specific goals for reducing greenhouse gas emissions by mid-century. Granted, developing countries with emerging economies must expand their industries to raise living standards.

But the awkward fact is that China is the world’s largest emitter of greenhouse gases. India is not far behind. Developing countries, as a group, will produce the majority of greenhouse gas emissions in coming years. According to the International Energy Agency, as much as 85 percent of the projected increase in man-made global emissions of carbon dioxide will come from emerging economies.

World leaders have agreed to meet in Copenhagen later this year in an effort to hammer out a new climate-change agreement. One of the pitfalls the conference will need to avoid is a situation in which industrialized countries are treated as pariahs, not partners, in the fight against global warming.

What should be avoided is a treaty that lets developing countries off the hook, since their emissions would overwhelm any reductions made in the United States and other industrialized countries — exactly the opposite of what is intended.

Apart from falsehoods underlying some of the assumptions about man-made global warming, such as the tired canard that energy companies care more for profits than protecting the environment, a cap-and-trade scheme would be a terrible mistake.

As approved by the House in a recently passed energy bill, cap-and-trade is basically a tax on carbon emissions that would cost an estimated 2.2 million jobs nationwide by 2011, according to a Heritage Foundation study. For Nebraska, this could mean the loss of 14,000 jobs within the next few years.

The carbon tax would wreak economic havoc on energy-intensive industries, especially those that use a lot of petroleum. One analysis projects that it would reduce gross domestic product by $9.6 trillion over the next 30 years. For Nebraska over that period, this could mean a reduction of as much as $55 billion in the state’s gross state product.

The tax would be an added burden on family budgets. People who use automobiles, trucks, planes and trains, as well as those who use heating oil and other oil products, would shoulder most of the burden.

Under the cap-and-trade bill, most companies would have to buy allowances, increasing their costs and giving a competitive edge to noncompliant companies abroad. Such an approach would make it hard for U.S. companies to make long-term decisions to adopt low-carbon technologies.

The measure would mandate the use of renewable energy sources like solar and wind power. But green projects are costly, and it is the taxpayer who funds the research and development of renewable energy and the cost of the government subsidies that support their use. And renewables account for only a tiny share of America’s energy production and cost far more than more traditional energy sources.

The measure now moves to the Senate for consideration. It is important to remember that higher energy costs, if approved, would hobble the American economy for years to come. It also probably won’t slow global warming, not if developing countries like China, India, Brazil and Mexico can count on getting a free ride.

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