As a matter of course, I have been recycling for nearly 25 years - long before it became chic to do so or for companies to race to become LEED-certified. Each week before my trash pick-up, I painstakingly separate the bottles and cans from the rest of the garbage - carefully checking the recycling codes imprinted on the bottom. I have also replaced all my double-hung windows with energy-efficient ones, purchased a dishwasher that uses minimal water, and regularly berate any member of my family for turning on the air conditioning when the temperature stalls under 85 degrees.
However my green leanings end - both as the proprietor of this space and as a taxpayer - at the cap-and-trade bill that recently squeaked through the House by a scant seven votes. This Hindenburg piece of legislation - which looks to reduce fossil fuels by 17 percent by 2020 and by 83 percent by 2050 - is very little about decreasing energy usage and a lot about a galactic leap in taxes.
Okay, before we delve into the particulars, many minds far brighter than mine are in reasonable agreement that global CO2 emissions could ultimately result in rising temperatures and damaging consequences to the environment. Now I would certainly support something that would help eliminate or at least blunt that. But this does neither.
The Waxman-Markey Clean Energy Bill was originally projected by the Congressional Budget Office to cost the average household only $175 a year by 2020. The bill's co-author, Rep. Edward Markey, D-Mass., equated that cost to a postage stamp each day for the average household.
But as they say, the devil is in the details, and in 1,300-plus pages of indecipherable legislation, there's bound to be a ton of details and expensive fine print. Under this system, Washington establishes a "cap" on the amount of carbon emissions across the country, and companies can buy or sell permits to emit CO2. In theory, those caps will winnow down use in hopes of eventual emission reductions.
But here's what the bill's proponents won't tell you. The CBO figures focus on 2020 - that's of course prior to when most of the bill's restrictions take effect. As the cap tightens, the price tag of these permits will begin to rise. Care to guess who the companies purchasing the permits will pass their costs on to?
In addition, the CBO investigated only the day-to-day costs of operating the cap-and-trade program, as opposed to the broader effects that full-scale energy restriction would have on the economy - not the least of which, according to some economists, would be a decrease in the GDP.
Consider for a moment a potentially far more frightening ripple effect, where higher prices will begin to surface elsewhere - and not just at the gas pump or the monthly invoice from the utility company.
A high school economics class teaches you that a widespread hike on prices will translate into less discretionary income and subsequent cutbacks in spending. That, in turn, affects such sectors as manufacturing and, ultimately, jobs. If you think the unemployment numbers are troubling now, wait a few years should this debacle get signed into law.
Want more good news? Recently I receive a copy of an analysis compiled by the Heritage Foundation, which concluded that the Waxman-Markey Bill would cost a family of four nearly $2,000 annually by 2020 and nearly $7,000 per year by the year 2035.
But the real kicker is that even if effected, the decline in CO2 and global warming would be minimal - with some estimates coming in at 9/100th of one degree Fahrenheit by 2050.
Estimates on the hikes in consumer prices needed to hit a 15 percent CO2 reduction - just under what this bill targets - would be in the range of $1,600 per family per year.
In short, this legislation is a tax tsunami with dire, far-reaching consequences.
Your wallet, that is.
(c) 2009 Accounting Today and SourceMedia, Inc. All Rights Reserved.
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