The American Spectator

The Public Policy

In a rare, candid moment during last year’s campaign, Barack Obama said, We can’t drive our SUVs, and eat whatever we want, and keep our homes at 72 all the time, whether we live in the desert or the tundra, and keep consuming 25% of the world’s resources with just 4% of the world’s population, and expect the rest of the world to say you just go ahead. We’ll be fine. That’s not leadership. That’s not going to happen.

This extremism is alive and well today as the foundation for Obama’s global warming policies. The theory of global warming is that use of fossil fuels such as oil, gasoline, coal, and natural gas (the foundation of the Industrial Revolution) is increasing atmospheric concentrations of carbon dioxide (CO2). This increased CO2 is allegedly trapping heat in the atmosphere through a greenhouse effect, which will allegedly cause the earth’s temperatures to rise to catastrophic levels. In the Spectator’s March issue, I showed that as a matter of science this theory is not valid, drawing on proven data and arguments from top scientists around the world. Nevertheless, governments and the UN fiercely cling to global warming theory because it justifies massively increased power for them, including potentially world government powers for the UN. This is why global warming theory has become a religion for the worldwide left, including environmental extremists, who see in it the potential for achieving their dream of repealing the Industrial Revolution. In other words, global warming is about politics and power, not science.

Cap and Tax

WE CAN SEE THIS IN THE Obama administration, which is using global warming to justify a massive “cap and trade” tax on the American economy. Under this policy, every business involving CO2 emissions will have to buy permits from the government for the amount of such emissions, which will be sold in open auctions, where the permit price will be bid up. But the government will limit the number of these permits, and consequently the maximum amount of CO2 emissions allowed. Indeed, over time the government will clamp down on the amount of CO2 emissions allowed by the permits, with the emissions to be reduced by 80 percent by 2050.

As the emissions allowed are phased down in the face of a growing economy, the price of the permits will soar. Consumers, of course, will bear these extra costs. Indeed, that is how cap and trade is supposed to work. The expectation is that consumers, when faced with higher costs for products whose production or use involves CO2 emissions, will shift to other products involving little or no emissions.

The Obama administration itself estimates that cap and trade will involve increased costs from 2012 to 2019 alone of $645 billion, and admits in its own budget that the actual costs could be much higher than that, depending on permit prices over those years. Indeed, other estimates put the costs three times higher. So the increased burden on each Ameri can over this period alone would be $2,100 to $6,300. For a family with two children, that would be $8,400 to $25,200, with much more to come after 2019.

These increased costs are effectively a new tax on the American people, even though Obama promised in his campaign that there would be no tax increase for the bottom 95 percent of income earners. As former House Speaker Newt Gingrich said in his CPAC speech earlier this year:

[L]et me get this straight, we are not going to raise taxes on anyone making less than $250,000 per year, unless you use electricity. And we are not going to raise taxes on anyone under $250,000 per year, unless you buy gasoline…[or] unless you buy heating oil…[or] unless you use natural gas….And I thought to myself how dumb do they think we are that they can pretend that an energy tax is not an energy tax and…that every retired American who uses electricity is not going to pay it, and every person in New Hampshire who uses heating oil is not going to pay it, and every person who drives a car isn’t going to pay it. I just want to report to Attorney General Holder and President Obama that this is a nation of people courageous enough…to insist that we not be governed by people who won’t tell us the truth.

Slapping Down the Middle Class

BUT EVEN WHEN THE CRITICS HAVE FAILED to appreciate that the problem with cap and trade involves more than increased costs. In addition to these costs, consumers will have to suffer decreased consumption of products involving CO2 emissions, such as gasoline, electricity, home heating oil, natural gas, automobiles (particularly upscale vehicles), even farm products such as meat. The increased costs are supposed to cause this decreased consumption. This decreased consumption amounts to a decline in the standard of living of the middle class.

For example, I expect cap and trade and other already adopted Obama policies to push the price of gas above $5 a gallon by the end of his current term of office. In addition to the increased costs, this will force a decline in driving, which in itself is a reduction in the American standard of living. It will also force Americans out of the big, powerful, luxurious vehicles they drive now, with lots of space for kids, their friends, and cargo, into small, weak, death traps. (We can’t just keep driving our SUVs, as Obama said above). Another decline in the standard of living.

Electric cars will not help here either, as I’ll explain. The Obama administration has made no secret that it expects electricity costs to rise sharply under cap and trade, since most electricity is produced by coal, oil, and natural gas. This means you are expected to cut back on your consumption of electricity.

Indeed, prices will rise until you do. This means less use of computers, flat screen TVs, cell phones, iPods, dishwashers, microwaves, ovens, ranges, microwaves, refrigerators, washers and dryers, everything powered by electricity. This includes air conditioning and heat (with home heating oil and natural prices soaring as well until consumption is reduced). As Obama warned us above, we just can’t keep our homes set at 72 all the time. This all translates into another major decline in the standard of living. Cap and trade even affects the food supply.

Modern farming equipment uses lots of energy, as does refrigeration and transportation. The production and use of fertilizer also allegedly contributes to global warming. Meat is a special problem, because cows, chickens, lambs, etc. must eat other produced food (feeding grains) that takes energy to produce, and cow flatulence (methane) is another greenhouse gas more powerful than CO2 (seriously). So expect food prices to rise until consumption is reduced, especially for meat, as well as other food that requires refrigeration, such as milk, cheese, eggs, ice cream, yogurt (dairy products have the same problem as meat, because they come from animals that must be fed, involving two bites of energy use, besides the third bite of refrigeration).

As Obama warned us last fall, we just can’t keep eating whatever we want. So the result is another major decline in the standard of living. They can’t even leave our hamburger and shake alone. Even your barbecue grill (charcoal burning) and lawn (mowing, fertilizer) are targets.