U.S. SENATE REJECTS LIEBERMAN-WARNER CAP-AND-TRADE BILL
July 22, 2008
Supporters of a sweeping plan to address global warming by limiting use of fossil fuels suffered a stinging defeat June 6 when the U.S. Senate rejected a bill intended to create a cap-and-trade system to reduce greenhouse gas emissions, says Bonner R. Cohen, a senior fellow at the National Center for Public Policy Research.
The bill would have:
- Established what its supporters say is a "market-based" system similar to the one adopted by the European Union a few years ago.
- Capped the amount of carbon dioxide that electric utilities, manufacturers and other firms would be allowed to release into the air.
- Forced companies who emitted more than their cap allowed to buy "carbon allowances" in a government-created market from companies that had extra ones to sell.
Supporters of the bill found it impossible to overcome economic concerns over the additional costs a cap-and-trade system would impose on consumers and industry:
- Unemployment in the United States reached 5.5 percent in May, up from 5.0 percent in April and 4.5 percent last June.
- The price of regular gasoline at the pump rose above $4 per gallon in early June.
- The U.S. Environmental Protection Agency (EPA) estimated the bill would reduce the nation's gross domestic product (GDP) by between $1 trillion and $2.8 trillion over the next 42 years.
- The Paris-based International Energy Agency (IEA) concluded that people would have to invest $45 trillion in energy during the next 40 years and build 32 nuclear power plants every year and 17,500 wind turbines to meet the bill's standards.
"While the defeat of the Lieberman-Warner bill was not unexpected, the margin of defeat was larger than expected," said Sterling Burnett, a senior fellow at the National Center for Policy Analysis. "The margin of defeat shows global warming alarmists have actually lost ground since the Senate last addressed the issue."
Source: Bonner R. Cohen, "U.S. Senate Rejects Lieberman-Warner Cap-and-Trade Bill," Heartland Institute, August 1, 2008.
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