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Press Release
For Immediate Release
Contact: Sean C. Bonyun
April 22, 2009
(202) 225-3761
Upton – Cap and Tax will Devastate U.S. Economy
Top Republican on Energy & Environment Subcommittee urges all witnesses to address
cap and tax's impact on consumer prices and job losses during this week's proceedings
WASHINGTON, DC – Congressman Fred Upton (R-MI), ranking Republican of the House Energy and Commerce Subcommittee on Energy and Environment, made the following statement at this morning's committee hearing on "Waxman-Markey Climate Change Legislation." Environmental Protection Agency Administrator Lisa Jackson, Energy Secretary Steven Chu and Transportation Secretary Ray LaHood appeared before the committee this morning.
Upton's full opening statement is provided:
I would like to thank in advance the 60 plus witnesses who will be testifying before the Committee this week. Due to the limited question time, I would like to submit the following four questions to each of our witnesses and please ask them to address these during their opening remarks:
- Will this legislation increase energy costs? If so, is there anything in the underlying bill that prevents these costs from being passed on to consumers?
- Since this legislation applies only to the United States -- but not other nations like China, India, and Mexico -- is there a chance it will result in American jobs being shipped overseas? How many jobs will be lost?
- What would be the cumulative cost per household of this legislation?
- Absent other nations adopting the same reduction policy, how much will this legislation reduce global temperatures, if at all?
I believe we need to reduce emissions. But we must do it in a commonsense way that takes into account the economic and global realities of this issue. Just this week, China discovered 180 miles of the Great Wall that they didn't know existed. How on earth are they going to be able to monitor and reduce their greenhouse gas emissions? I wonder how many coal-fired power plants they discovered along the 180 mile route?
We are not engaged in a guessing game – we have the luxury of examining empirical evidence of past forays into this misguided policy. All one has to do is examine the results of the European Union's cap-and-tax scheme – it was a failure. CO2 emissions in the US fell by 1.8 percent in 2006, compared to a 0.3 percent increase in emissions in the EU, according to EIA. Both economies grew at a near-identical pace in 2006, about 3 percent for the year. Given the economic conditions we're facing today, we should not try to replicate the EU's failed experiment. Not to mention that emissions increased in the EU.
Cap-and-tax will essentially kick working families when they're down. And we thought the American public was angry over a dollar or two increase in gas prices last summer – just wait until they get their hands on their utility bills under cap-and-tax. In 2008, approximately 21 percent of all utility accounts were overdue, with folks carrying past due balances, on average, of $160 on electric bills and $360 for natural gas. In Michigan, account debt totaled $367 million with 1 out of 3 behind on their bills in some areas. Times are tough, yet this proposal puts a bull's-eye on the backs of working families who are struggling to feed their families and keep the lights on.
Michigan, already one of the hardest hit in this weak economy, would be disproportionately impacted. NAM did a detailed analysis of the impact on my home state. Quite simply, jobs will be lost, electricity prices will go up, household incomes will be decimated and economic growth will disappear.
From 2000 to 2008, we've lost 3.8 million manufacturing jobs – a decline of 22 percent. At the same time, imports were up 29 percent - a direct correlation. Michigan has been ground zero for these losses. The manufacturing and energy intensive industrial sectors are highly competitive, and more often than not, the cost of energy is the difference between operating in the United States and shutting the doors to move overseas.
We shouldn't be tying a hand behind out back. We can reduce emissions and create jobs through other policies. Now is not the time for a costly cap-and-tax system.
Let's put the scale of the emissions reductions being called for into perspective. Current proposals would mean that the United States cannot emit more in the year 2050 than we emitted in 1910. This is a daunting task considering that in 1910 the United States had only 92 million people—compared to an estimated 420 million in 2050—and a per capita income, in current dollars, of about $6,000. To reach the lofty goal of 80 percent reduction, emissions from the entire transportation sector would have to drop to zero; emissions from all electricity generation would have to drop to zero; and then we'd need to reduce all other remaining sources of emissions by 50 percent.
Think about the industries and jobs we'd have to lose to meet those goals. Can America remain a power on the world stage if we shed these industries? Can our economy recover without those jobs?
Climate change is a serious problem that necessitates serious solutions. But how can we address such a critical issue without nuclear even being addressed in this measure, even though nuclear power accounts for 70 percent of our nation's emissions-free electricity. We are in desperate need of a reality check.
In this debate over climate change, it seems we have lost sight of our true goals. We have lost sight of what our policies should achieve. The focus has become a cap-and-tax scheme as an end in itself – reducing global temperatures no longer seems a priority.
Without international participation, jobs and emissions will simply shift overseas to countries that require few, if any, environmental protections, harming the global environment as well as the U.S. economy. If the objective is to send manufacturing jobs overseas, destroy the Rust Belt, mortgage our future, and hand over the keys to our super power status, then I say job well done.
The stakes are high, the planet is warming, and this is no time to throw in the towel, all in the name of cap-and-tax.
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