2008

Senator Barbara Boxer (D-CA) looked ridiculous last week when she insisted the Lieberman-Warner Climate Security Act would cause “no increase in gas prices.”

She is chair of the Senate Environment and Public Works Committee, which has jurisdiction over climate change, so there is no excuse for her not knowing that the Lieberman-Warner Climate Security Act was designed to make gas more expensive.

Under the Lieberman-Warner “cap and trade” scheme, industrial users and suppliers of energy would have to buy the right to emit greenhouse gases from an annual government-run auction, whereas now these emissions are free.

But businesses would not simply absorb higher input costs; instead, they would pass along the burden to consumers. That’s why, in a report released last April, the Congressional Budget Office says that “most of the cost of meeting a cap on CO2 emissions would be borne by consumers, who would face persistently higher prices for products such as electricity and gasoline.”

Here’s a few estimates of how high the price of gas would go under the Lieberman-Warner energy rationing plan, as compiled by the minority staff on the Senate EPW Committee:

• The independent analysis by Science Applications International Corporation (SAIC) predicts gasoline prices will increase between 60% and 144% by 2030.
• The EPA estimates that the Lieberman-Warner bill will increase fuel costs an additional 53 cents per gallon by 2030 and by $1.40 by 2050. 
• An independent study by NERA Economic Consulting estimates that the price of motor fuel will rise by 48 cents per gallon by 2030.
• The Energy Information Agency (EIA) estimates gas prices will increase anywhere from 41 cents per gallon to $1.01 per gallon by 2030. 

Gas prices will rise under this bill.  Whether it’s an additional $1.40 as predicted by EPA or $5.16 as predicted by SAIC, Americans would pay more for gas under Lieberman-Warner.

I missed this when it was first published, but it turns out that fat people cause global warming!  Reports Reuters:

Obesity contributes to global warming, too.

Obese and overweight people require more fuel to transport them and the food they eat, and the problem will worsen as the population literally swells in size, a team at the London School of Hygiene & Tropical Medicine says.

This adds to food shortages and higher energy prices, the school’s researchers Phil Edwards and Ian Roberts wrote in the journal Lancet on Friday.

“We are all becoming heavier and it is a global responsibility,” Edwards said in a telephone interview. “Obesity is a key part of the big picture.”

I concede my own responsibility.  Since having a knee replaced (using up enormous amounts of energy and creating a huge carbon footprint in the process!), I’ve gained a lot of weight.  So I guess I’d better contribute to one of Al Gore’s enterprises to assuage my guilt.  And everyone else who’s put on some extra weight as they’ve gotten older should follow suit!

Maybe we need a government “cap and trade” program for pounds.  We each get a permit for the average body weight, and have to buy more permits if we go over.  Thin people could sell permission to put on some extra fat.  Whaddya’ think?

Tim Carney continues to expose the rent-seeking motives behind a lot of environmental regulation, in this case cap and trade legislation. As he notes, the story hasn’t changed much from the days of Enron’s enthusiastic support for the Kyoto Protocol.

Today, well-connected firms are lobbying for Lieberman and Warner’s Enron bill, which is the same environmentally dubious corporate boondoggle Enron had hoped Kyoto would spur.

General Electric has created a new business called GHG Services, which plans to pick up Enron’s CO2-dealing business, including winning free allowances through lobbying efforts.

Alcoa, similar to Enron’s coal gambit, makes much of its aluminum offshore, and so its energy-intensive manufacturing will be untouched by the Enron bill, while its lighter end-products (such as car frames) will be worth more.

Lieberman’s No. 1 donor, United Technologies, stands to profit handsomely from this bill’s research and development subsidies.

The early business coalition for cap-and-trade has become divided recently on the Enron Bill as it currently stands, and so it probably won’t become law until next year. But it’s all a bit sad — if this same bill had become law just seven years ago, the country and every family that pays utility bills, buys groceries and drives might be poorer, but those Enron shareholders would be much better off.

For more on the sordid story of Enron and Kyoto, see the chapter on the Enron scandal in Tim’s book, The Big Ripoff: How Big Business and Big Government Steal Your Money.

European Union ministers will try to get the United States to agree to “mid-term” emissions targets of 20% reductions by 2020 at the G8 conference for industrialized nations in Japan early this July. That’s not an arbitrary target; it’s the same one that the EU already adopted unilaterally two years ago.

European countries have yet to act on their collective promise to reduce emissions because they want other industrialized countries to make a similar pledge before proceeding with economically harmful climate policies. The procrastination is starting to hurt Europe’s heavy industry sector, which has postponed new investment until it can assess whether the EU’s climate regulations would make it more profitable to do business in countries without climate change regulations. But it cannot postpone investment much longer, because heavy industry requires long planning horizons. As a result, the EU is getting increasingly desperate to commit the United States to similar emissions targets.