By Andrew Langer
Americans certainly aren’t suffering a shortage of climate news. With international debates over carbon taking place at the United Nations meeting in New York and the G-20 Summit in Pittsburgh this week, emissions policy has been generating a lot of media coverage. But here’s one headline that has yet to break: the creation of a US carbon market linked with the existing EU system would decrease European carbon prices
That means US consumers would be left footing the bill for Europe’s failing cap and trade experiment.
Close inspection of a recent report by European consulting group Point Carbon -- whose aim is to increase support for a US cap-and-trade scheme -- demonstrates that the creation of a national carbon market would serve to subsidize the failing European Trading Scheme (ETS) with US tax dollars. Many economists have long claimed that such a policy would spur wealth transfer abroad. And the data in report validate these concerns. It shows that linking US and EU cap and trade systems could slash EU carbon prices by 50% while increasing ours by as much as 30%.
Need more proof? Another study by British P.M. Gordon Brown’s argues, predictably, in favor of pulling American’s economy into the carbon trading mix. This move would provide political cover for his unpopular administration as they try to maintain their involvement in the EU ETS. But Brown’s plan comes with a big bill for consumers in the States.
The creation of a linked US carbon market would mean billion dollar cost increases for Americans. The price stabilization resulting from a global market for carbon credits would eventually raise the price of CO2 to $20 or more per ton. Since Waxman-Markey allocates little more than 5.4 billion tons of allowances in 2016, Americans would be shelling out over $100 billion while Europeans would enjoy significant relief from their energy bills.
In addition to raising prices, a cap and trade system -- like the one outlined in the House Waxman-Markey bill -- provides carbon offset programs that would invest in clean energy projects abroad, creating foreign jobs while slashing domestic industry jobs. Promises of “green-collar jobs” could theoretically be fulfilled through a carbon trading regime, but we are likely to see these jobs go oversees rather than replace the thousands of jobs that stand to be lost here at home.
Bottom line: It’s the job of Congress to look out for the well-being of American citizens and businesses before the interests of foreign companies.
In an effort to fix the problems of their own system, European bureaucrats are striving to cajole the US into boarding a sinking ship for their rescue. The ETS has yet to achieve significant emissions reductions and has only served to increase volatility in energy prices and hinder European businesses.
Sen. Barbara Boxer plans to introduce the Senate version of Climate legislation next week, and a mark-up is scheduled for mid-October. Fortunately, healthcare is not the only deterrent to passing cap and trade legislation this year. More and more Americans are beginning to realize what’s at stake and are starting to voice their concerns. We can only hope Congress chooses to respond to the voice of the American people not EU special interests.