Time to bury cap-and-trade bill

There was marginally good news this week on Democrats’ proposed cap-and-trade legislation, which is ostensibly aimed at curbing global-warming carbon emissions.

California Rep. Henry Waxman and others announced they were scaling back their proposed legislation that targets carbon-dioxide emissions by industry.

Compromise is necessary because many people in both parties see the legislation as a job killer. It would place some U.S. industries, such as steel and cement, at a competitive disadvantage with those in foreign countries that have no carbon requirements. And it would raise the amount consumers pay for electricity as much as $1,200 a year, according to some estimates.

Waxman’s compromise isn’t an effort to get GOP support for his bill so much as an attempt to
win over recalcitrant Democrats.

Even so, adopting Waxman’s compromise would be a huge mistake. Despite scaling back a bit on the amount of CO2 that can be emitted by 2020, the bill still includes thousands of pages establishing a new bureaucracy. It would create favored industries and organizations that would receive free CO2 emission coupons from the government, while requiring others to purchase the coupons at considerable expense. Electric consumers on both coasts, where coal is not used as extensively, wouldn’t face as much in increased electric costs as those in the nation’s heartland.

Reports from Europe show that a cap-and-trade system instituted there two years ago hasn’t reduced carbon emissions as much as predicted. But it has raised electric costs substantially and forced layoffs, even at some companies that had stellar green records.

We’re no fans of raising taxes, especially during the current economic crisis. But if the primary goal was really to reduce CO2 emissions, a straightforward carbon tax would be a more sensible solution. Better that than a convoluted cap-and-trade system that allows members of Congress and government bureaucrats to reward certain favored industries and organizations, penalizes others, and relies on U.S. consumers to pay for all of it.

The real good news on cap-and-trade this week wasn’t that Waxman and friends produced a compromise bill, but the fact that many Democrats remain wary of the bill. There may be enough of them, Capitol Hill observers say, to keep a lid on any cap-and-trade legislation.


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