In other words, the cost of a suitcase of Budweiser could make or break the country’s most ambitious environmental program.”
That’s The Wall Street Journal’s Keith Johnson discussing numbers from the most recent Washington Post-ABC News poll. When asked about cap and trade, 52 percent of responders supported such a program – the same as last month but down from 59 percent a year ago. More interesting, though, is how the responses change when asked how much one would be willing to pay in higher electricity bills.
When asked if a cap and trade program “significantly lowered greenhouse gases but raised your monthly electrical bill by 25 dollars a month” – then only 39 percent support cap and trade while 59 percent oppose it.
Economists at The Heritage Foundation modeled the proposed Waxman-Markey cap and trade bill that passed in the House of Representatives last June. The analysis found that over the 2012-2035 timeline, the years in which Heritage modeled the bill, electricity prices would increase $32.67 per month.
But that’s just one small chapter in the book on how an average family of four’s pocketbook would be hit. Cap and trade is a massive tax on energy across the board – so your electricity bills will rise and so will everything else – gasoline, natural gas, and home heating oil. Add it up and the family of four energy expenditures increase on average by $69 per month from 2012-2035. Because the carbon caps become more stringent in subsequent years, the costs are highest in 2035 at $103 per month in the form of direct higher energy prices.
Remember; these increases occur not only after adjusting for inflation, but also after households have adjusted as well as possible to the higher energy prices.
And that’s not even the whole story – there are indirect costs too. The energy tax also hits producers. As the higher production costs ripple through the economy, the household pocketbooks get hit again and again when producers pass costs onto the consumers. If you look at the total energy tax from Waxman-Markey, it works out to an average of $2,979 annually from 2012-2035 for a household of four. By 2035 alone, the total cost is over $4,600.
That comes to $248.25 cents per month, on average, for a family of four. At that price, you could replace that suitcase full of Budweiser with Grey Goose.
We’re wondering: What percentage of responders would be willing to support a cap and trade bill if they knew it would cost that much?