Archive for Wednesday, September 17, 2008

Green push could hurt economy

September 17, 2008

Few would disagree that being responsible stewards of the Earth and our environment is the prudent thing to do, with well-thought-out actions. But recent legislative efforts, an onslaught of media coverage and celebrity activism trumpeting a rapidly approaching global warming catastrophe are moving the issue, seemingly unchecked, toward one direction - over-regulation and taxation. Without a clear understanding of the impact of these actions or consensus on the causes and trends of climate change, we could be heading toward "solutions" that are much more harmful to Kansas consumers and businesses than the environmental benefits they aim to provide.

It's crucial that we consider the science on climate change. For example, according to the Department of Energy, 5.53 percent of greenhouse gases are man-made, while the rest occur naturally in our atmosphere in the forms of carbon dioxide (CO2), methane and nitrous oxide. If you include water vapor, the percentage of man-made greenhouse gases is much smaller.

And, we must consider where the emissions of concern are being generated, at what rate and the prediction for future emissions. Specifically, the United States accounts for 17.46 percent of total greenhouse gas emissions. China is currently responsible for 18.3 percent and that number is increasing at a dramatic rate. According to the Energy Information Administration, China's emissions increased more between 2003 and 2004 than did U.S. emissions between 1993 and 2004. Yes, China's emission increased more in one year than ours did in one decade!

Earlier this year, the U.S. Senate debated a bill that would establish a "cap and trade" program meant to reduce greenhouse gas emissions. The "cap" would lower the amount of emissions that a business or utility could release, while the "trade" would allow credits to be bought or sold to meet the aggressive emissions reductions targets proposed in the legislation. Behind the bureaucratic jargon, however, it is apparent that cap and trade is really a just a new tax on energy use.

Economic studies, including analyses conducted by the Congressional Budget Office (CBO), the National Association of Manufacturers (NAM), and the U.S. EPA, have addressed the economic impact of cap and trade proposals. Each study concluded that under a cap and trade program consumers will pay significantly more for a wide array of products and services.

For Kansas, the NAM study predicts:

¢ Electricity price increases of up to 153% by 2030.

¢ Gasoline price increases (per gallon) of up to 140% by 2030.

¢ Natural gas price increases of up to 153% by 2030;

¢ Household income losses of up to $7,200 by 2030;

¢ Employment losses of up to nearly 37,000 in 2030;

¢ Gross State Product (GDP) losses of up to $5.7 billion by 2030.

Fortunately, this federal legislation failed to pass. Yet, cap and trade proponents continue to push similar programs here in Kansas. Federal and state policymakers should think long and hard about the consequences that come from these policies. If such a law passed, the cost of living and doing business in Kansas will greatly increase, adversely impacting every citizen and household, small and large business, manufacturing and services industry, state and local government, and even civic and non-profit organizations. With Kansas accountable for only 0.25 percent of total greenhouse gas emissions, the real questions become, what impact did we have on global climate change and at what cost?

While the environmental impact of climate change is still under scientific analysis, the economic implications of proposed climate policies are not. We need to strive to achieve balanced energy choices and conservation stewardship in Kansas. But we need to be sure to avoid causing more economic harm than environmental good.

- Amy Blankenbiller is president and CEO of the Kansas Chamber of Commerce.

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