Facts about the Waxman-Markey global warming bill.
• This legislation threatens to lock the United States into an era of economic stagnation and global decline.
o Bill imposes new greenhouse gas emissions standards and efficiency standards across the U.S. economy.
o Creates an untested and complex multi-trillion dollar cap-and-trade program.
o Directs the EPA, DOE, and other agencies to promulgate a host of new regulations on American businesses and enterprise, and authorize more than a trillion dollars of taxpayer outlays.
o Results in a massive expansion of the EPA and other federal regulatory control over virtually all major sectors of the U.S. economy.
• Prices for energy and goods and services would rise for virtually all Americans.
o Certain regions of the country will be particularly hard hit.
o Bill is a wealth transfer from the Southeast and Midwest to the Pacific Northwest, California, and the Northeast.
o U.S. Rep. Fred Upton, R-Mich., during the markup on the Waxman-Markey global warming bill in late May, offered five amendments which would install various safety mechanisms in the act to relieve households from drastic increases in the price of electricity and natural gas. These Amendments would respectively suspend the provisions of this act: if the average residential monthly electricity account is in arrearage by $175 or more, if 25 percent or more of residential monthly electricity accounts are overdue, if the average residential monthly natural gas account is in arrearage by $400 or more, if 25 percent or more of residential monthly natural gas accounts are overdue, or if the national termination rate for consumers in either the electric or natural gas industry is 8 million households or more.
• Enactment of this legislation will cause job losses in the U.S. in the manufacturing, industrial and other energy-intensive sectors, including in those industries that produce globally traded commodities.
o Cap and trade will dramatically increase energy costs for energy-intensive industries.
o Increased energy costs puts U.S. companies at a competitive disadvantage with foreign competitors in China, India, and other developing countries.
o Modeling done to date concludes that the number of jobs lost would far exceed any “green jobs” created.
Title I - Combined Efficiency and Renewable Electricity Standard
• The definition of “renewable” in the base text is incredibly limited – it picks and chooses favored types of electricity even among renewable sources
o No hydroelectric electricity qualifies as “renewable”
o A limited selection of biomass would be eligible
o New nuclear only is given limited credit – nuclear isn’t fully recognized as the clean energy source it is.
• If the goal of the legislation is to reduce greenhouse gas emissions, then why are we mandating certain types of electricity be purchased, instead of simply requiring that low-emitting electricity be generated?
• U.S. Rep. Greg Walden, R-Ore., offered an amendment in the committee markup that would remove from the legislation additional regulations that would discourage or prevent the deployment of new hydroelectric facilities. Hydroelectric is the cleanest source of emissions-free baseload power generation. Its deployment should be accelerated, not hindered, if America is to move toward a future with clean, reliable, and affordable energy. It was defeated in an en bloc amendment, 36 Democrats to 22 Republicans.
Title II – Building and Appliance Efficiency
• Section 201 – Building Efficiency
o Upon passage of this bill, a 30 percent increase in building efficiency is required. Effective January 1, 2014 for residential buildings and January 1, 2015 for commercial buildings, an additional 50 percent increased efficiency is required. Subsequent three-year targets of additional five percent increases in efficiency are mandated through January 2030.
o These targets and deadlines were established with no concern for cost and with no assessment of feasibility.
o Failure by the states to adopt the national code results in the federal government taking over code enforcement, effectively enforcing legislation never enacted by the state. This is a 10th amendment violation.
• Sec. 204 – Building energy performance labeling program
o A labeling system of homes and buildings could never begin to incorporate all of the variables, preferences, and elements that make residential and commercial buildings distinct and attractive to potential purchasers.
o The energy profile of a home varies dramatically from one to the next depending on a range of variables for which a government agency cannot account to any degree of scientific precision when formulating the labeling system. A “one-size-fits-all” numerical rating for something as diverse as housing could only serve to mislead consumers and distort the housing market.
• An amendment offered by Rep. Steve Scalise, R-La., during the global warming bill markup in May, would strike Section 201 from the act, which mandates implausible new building codes for residential and commercial buildings that would violate the 10th Amendment to the U.S. Constitution. Striking this section is necessary for that reason alone, but these new codes would also put up a roadblock to growth in the housing and construction industries. A vote for this amendment helps ensure that affordable quality housing is a part of this nation's future. This amendment was defeated by Democrats, 20 to 31.
• An amendment offered by Rep. Cliff Stearns, R-Fla., during the same markup would strike from the act Section 204, which requires the EPA to create a tiered rating scheme to partition residential and commercial buildings into different categories based on their energy efficiency. Forcing all homes to conform to a set of arbitrary efficiency labels fails to reflect the unique nature of the housing market, and could raise volatility in an already unstable sector of this economy. This amendment will prevent these onerous regulations and protect Americans’ home equity. This amendment was defeated by the Democrats 29 to 27.
Title III – Cap and Trade
• Title III of this Act seeks to reduce the quantity of United States greenhouse gas emissions and disregards:
o costs to households, businesses, and industry
o the availability of the necessary technology to maintain clean, inexpensive energy;
o any effectiveness in reducing global emissions;
o whether the provisions will impede the economic growth of the United States and the future economic welfare of its citizens.
• Cap and trade is designed to raise the price of energy on American consumers, businesses, and industry. Raising energy costs is the only way this legislation can force the reduction of greenhouse emissions from the inexpensive, abundant, and reliable fossil energy Americans use to live and work. Any provisions to shield consumers from costs, merely rearrange the costs among regions or income classes, and have no effect on the overall impact on the American economy.
• There is no safety valve or exit ramp. If household energy costs increase by hundreds of dollars or regions lose thousands of jobs because of this legislation, there are no provisions to rescind the scheme.
• Despite the higher energy costs, it is highly questionable whether the emissions reduction programs will make enough impact on global greenhouse emissions to justify the costs.
• The bill does not require binding action from the largest and fastest growing greenhouse gas emitters, such as China and India, or the fast-growing developing world, which at present emit more greenhouse gases than the developed world combined, according to the Energy Information Administration’s International Energy Outlook (2009).
• At the current pace, the United States could cut its current energy-related emissions to zero, and by 2030 annual global energy-related carbon emissions are still projected to be nearly seven billion metric tons more than 2005 – equivalent to a doubling of all of North America’s current emissions in 20 years.
• Offsets: Section 311 provides for the use of a combination of domestic and international offsets that covered entities can purchase to meet emissions obligations. If not enough domestic offsets are available, up to three-quarters of offsets used for compliance may come from developing nations. Reliance on international offsets is controversial on effectiveness and cost-control grounds.
• International offsets are a giant wealth transfer overseas. We are paying the developing world to preserve their forests or we are paying to install state-of-the-art technology into the hands of our manufacturing competitors.
Title IV – Allocations
• Only 15 percent of the permits will cost companies anything at the start; the other 85 percent are to be given away to CO2 emitters. The catch is that all will be bought and sold on a government-created market and the costs will be billed to electric utility consumers. Even radical environmentalists think that’s a mistake, not because they care about your electric bill going up, but because it means environmental effectiveness is lost.
• By subjecting domestic employers to a costly regulatory system, the bill places American jobs at a double disadvantage: competitive disadvantage vis-à-vis their foreign competitors and pressure to move jobs overseas to countries that do not unilaterally disadvantage manufacturing or other energy intensive activities.
• An exchange between U.S. Rep. Fred Upton, R-Mich., and David Sokol, chairman of MidAmerican Energy Holdings, a Midwestern power supplier, during a June 9 hearing on the allocations in the bill describes what exactly will happen to consumers under this bill:
Upton: “And how much is that for the average consumer? Is it really 15 cents?”
Sokol: “No, and those numbers, you can make numbers say whatever you want. If you like, I can go through the example of the state of Iowa. The public power stations and rural electric co-ops also oppose this bill for the same reason we do, and the reason is it throws the consumer under the bus. In Iowa, our cost increase just for 784,000 customers is $283 million in the first year just for the allocation purchases. That’d be $110 per month, per customer.”
• At the same June 9 hearing, Steve Cousins, the vice president of an El Dorado, Ark., refinery called Lion Oil Co., said Waxman-Markey would close his plant and lay off all 1,200 workers. His average annual net of $13 million, he said, simply wouldn’t stretch far enough to cover the $180 million worth of permits he’ll need to stay in business.
• International negotiations should have taken place prior to this legislation being implemented. This would ensure that unilateral actions taken by the United States would not be negated by emissions from India and China.
