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June 21, 2005
The Hon. Mike Crapo
U. S. Senate
Washington, DC 20510
Dear Senator Crapo:
The undersigned organizations are writing to share our views on possible amendments to S. 10, the omnibus energy bill now being considered by the Senate, that would raise energy prices and limit energy consumption in the name of addressing global warming. We support policies that will promote continuing abundant supplies of affordable energy to American consumers and producers by opening access to domestic energy resources and by creating the conditions necessary for private enterprise to rebuild and enlarge America’s inadequate energy infrastructure.
We believe that amendments based on the Climate Stewardship Acts (S. 1151 and S. 342) that Senators McCain and Lieberman have announced they will offer and on recommendations of the so-called National Commission on Energy Policy (NCEP) that Senator Bingaman has announced he will offer would overwhelm any pro-energy provisions in the bill and in fact put us on a path in the opposite direction.
It has been claimed by proponents of the Bingaman-NCEP and McCain-Lieberman proposals that they are modest and relatively inexpensive first steps toward limiting greenhouse gas emissions. However small and far in the future the initial costs may be, these proposals are camel’s-nose-under-the-tent strategies to create the institutional and legal framework and the political incentives necessary eventually to force Kyoto-style energy rationing on the American people. Both proposals are designed to change fundamentally and irreversibly the nature of the debate in Congress over climate and energy policy.
The debate until now has been over whether to suppress the use of carbon-based energy. Enacting a cap on carbon emissions, however modest to begin with, would short-circuit that debate without fully considering the enormous consequences of what is being undertaken. Historical experience with other major environmental laws suggests that once a system to constrict energy supplies and raise energy prices is enacted into law, it will be extremely difficult to undo, no matter how ill-advised it turns out to be, because it will create special interests that benefit from such a scheme. Thus Congress will henceforth continually be debating how much more and how much faster to reduce hydrocarbon energy use.
The attempt by supporters of both these proposals to focus on their allegedly low initial costs obscures two crucial points. First, what is being proposed is a hidden tax. As the CBO noted in a 2001 report, “the economic impacts of cap-and-trade programs would be similar to those of a carbon tax: both would raise the cost of using carbon-based fossil fuels, lead to higher energy prices, and impose costs on users and some suppliers of energy.” Second, there is no point taking a first step on reducing greenhouse gas emissions without committing to taking the succeeding steps. The first emissions cuts will be the cheapest to make. As each succeeding phase requires further emissions cuts, the costs will go up and up and up.
The allegedly low initial costs should also be considered in relation to the predicted amount of global warming that would be averted. The EIA estimates that the total cost of the NCEP’s cap-and-trade proposal would be 331 billion dollars between 2010 and 2025. It has been estimated, using a method first published in Geophysical Research Letters in 1998, that this investment would avert an increase in the global mean temperature of eight thousandths’ of a degree Celsius. This is a lot of money to spend for a microscopic result.
Over the past several months, several Senators have expressed the opinion that “we need to do something on global warming” because we are falling far behind the efforts of the European Union, Japan, and Canada. This is not the case. While fifteen member nations of the European Union, Japan, and Canada, have ratified the Kyoto Protocol, they are already falling far short of meeting their commitments to reduce greenhouse gas emissions. The European Union Commission projects that only two member nations—the United Kingdom and Germany—are on course to meet their Kyoto targets. Emissions have been rising in many EU member nations and in Canada more rapidly than in the United States, despite lower economic and population growth. Nor is Japan projected to meet its targets.
It should be understood that our criticisms do not apply to the amendment that Senator Hagel may offer based on his three climate bills. Senator Hagel’s bills do not put a mandatory cap on greenhouse gas emissions or provide any incentives for a mandatory cap.
In conclusion, we urge you to vote No on the Bingaman and McCain-Lieberman climate amendments. Thank you for your consideration of our views.
Fred Smith, President
and Myron Ebell, Director of Global Warming Policy
Competitive Enterprise Institute
Matt Kibbe, President
Paul M. Weyrich, National Chairman
Coalitions for America
Malcolm Wallop, Chairman
and George Landrith, President
Frontiers of Freedom
Jim Martin, President,
and Ed Fulginiti, Communications Director
60 Plus Association
Grover Norquist, President
Americans for Tax Reform
David Keene, Chairman
American Conservative Union
Paul J. Gessing, Director of Government Affairs
National Taxpayers Union
Jim Backlin, Vice President of Legislative Affairs
Christian Coalition of America
Gregory M. Cohen, President
American Highway Users Alliance
John Dendahl, President
Rio Grande Foundation (New Mexico)
Mark Mathis, Executive Director
Citizen’s Alliance for Responsible Energy (New Mexico)
Steven Mosher, President
Population Research Institute
Cliff Kincaid, President
America’s Survival, Inc.
C. Preston Noell, III, President
Tradition, Family, Property, Inc.
David Ridenour, President
Americans for the Preservation of Liberty
Paul Driessen, Senior Policy Advisor
Center for the Defense of Free Enterprise
Ron Pearson, President
Council for America
Jeffrey Gayner, President
Americans for Sovereignty
Richard Falknor, Executive Vice President
Maryland Taxpayers Association, Inc.
Bob Ferguson, Director
Center for Science and Public Policy
Jim Boulet, Jr., Executive Director
Brian Bishop, Director
Rhode Island Wiseuse
Jon Reisman, Adjunct Fellow
Maine Heritage Policy Center