NoaIzumiNew Domain, and Phyllis Schlafly on Cap and Trade
May 19th 2009 16:00
Editorial Fact Check has been promoted! We’re now at Fine Politics, and loving it. As our inaugural post, we’ll be looking at a recent piece by conservative grand dame Phyllis Schlafly.
Cap-and-Trade Just Shorthand for Tax Hikes
Phyllis Schlafly is one of more respected conservative voices in America, so it was not entirely surprising to see her on the anti-cap-and-trade bandwagon. Unfortunately, she doesn’t bring much that’s new to the argument.
“The Obama administration hopes that increased energy costs will force us to shift away from the use of fossil fuels to various alternatives.”
Like many others, Mrs. Schlafly ignores the fact that many CO2 reduction measures being proposed and implemented involve simply reducing energy usage, such as weatherizing homes and raising CAFÉ standards for cars.
“A new report by the respected Tax Foundation found that cap-and-trade would impose an annual burden of $144.8 billion per year on U.S. households.”
The report can be found here:
Who Pays for Climate Policy?
The Tax Foundation gets this figure by multiplying the market value of carbon credits (about $100 per ton of carbon, by their estimate) by the total number of carbon credits issued (whether auctioned or given away), and calling that the annual burden to the economy. But the Tax Foundation, and Mrs. Schlafly, seem to forget that for every carbon credit that someone has to buy (and pass the cost on to the consumer), someone else is selling it, thereby adding to their income. The money spent on carbon credits doesn’t go into a black hole someplace, it stays in the system. Some people will experience a negative impact, but others will experience a positive impact (and isn’t that what capitalism is all about?). The TF and Phyllis Schlafly look only at the negative side of things.
Besides, most of the carbon credits won’t be traded at all. Even if a company makes incredible advances in efficiency, chances are it will still emit most of the carbon it did before, therefore it will still need most of its carbon credits. (On an aside, isn’t it sad when a respected individual starts talking about something, and as you listen to them, it becomes obvious that she doesn’t know what she’s talking about? The more I go over this, the more I think that Mrs. Schlafly lacks even a basic understanding of the carbon credit market.)
“Furthermore, cap-and-trade would be a regressive tax: The burden would be disproportionately borne by low-income households”
If cap-and-trade leads to higher electricity rates, that’s true, hence the tax break targeted at the lower and middle-class households to counter it, not mentioned by either the Tax Foundation or Mrs. Schlafly.
Really Long Link
I also find it interesting that she’d mention the regressiveness in the Investor’s Business Daily. When James Hansen proposed a carbon tax and included a plan to counteract its inherent regressive nature, IBD denounced the plan as redistributive and coercive.
Really Long Link
In addition, recent developments suggest that most of the carbon credits will be given away, rather than auctioned off as originally planned. Exactly how can it be a tax when the government is getting very little revenue?
Cap-and-Trade Just Shorthand for Tax Hikes
Phyllis Schlafly is one of more respected conservative voices in America, so it was not entirely surprising to see her on the anti-cap-and-trade bandwagon. Unfortunately, she doesn’t bring much that’s new to the argument.
“The Obama administration hopes that increased energy costs will force us to shift away from the use of fossil fuels to various alternatives.”
Like many others, Mrs. Schlafly ignores the fact that many CO2 reduction measures being proposed and implemented involve simply reducing energy usage, such as weatherizing homes and raising CAFÉ standards for cars.
“A new report by the respected Tax Foundation found that cap-and-trade would impose an annual burden of $144.8 billion per year on U.S. households.”
The report can be found here:
Who Pays for Climate Policy?
The Tax Foundation gets this figure by multiplying the market value of carbon credits (about $100 per ton of carbon, by their estimate) by the total number of carbon credits issued (whether auctioned or given away), and calling that the annual burden to the economy. But the Tax Foundation, and Mrs. Schlafly, seem to forget that for every carbon credit that someone has to buy (and pass the cost on to the consumer), someone else is selling it, thereby adding to their income. The money spent on carbon credits doesn’t go into a black hole someplace, it stays in the system. Some people will experience a negative impact, but others will experience a positive impact (and isn’t that what capitalism is all about?). The TF and Phyllis Schlafly look only at the negative side of things.
Besides, most of the carbon credits won’t be traded at all. Even if a company makes incredible advances in efficiency, chances are it will still emit most of the carbon it did before, therefore it will still need most of its carbon credits. (On an aside, isn’t it sad when a respected individual starts talking about something, and as you listen to them, it becomes obvious that she doesn’t know what she’s talking about? The more I go over this, the more I think that Mrs. Schlafly lacks even a basic understanding of the carbon credit market.)
“Furthermore, cap-and-trade would be a regressive tax: The burden would be disproportionately borne by low-income households”
If cap-and-trade leads to higher electricity rates, that’s true, hence the tax break targeted at the lower and middle-class households to counter it, not mentioned by either the Tax Foundation or Mrs. Schlafly.
Really Long Link
I also find it interesting that she’d mention the regressiveness in the Investor’s Business Daily. When James Hansen proposed a carbon tax and included a plan to counteract its inherent regressive nature, IBD denounced the plan as redistributive and coercive.
Really Long Link
In addition, recent developments suggest that most of the carbon credits will be given away, rather than auctioned off as originally planned. Exactly how can it be a tax when the government is getting very little revenue?
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