NCPA - National Center for Policy Analysis


June 16, 2010

President Obama delivered his first Oval Office speech on the heels of his latest visit to the Gulf region - the fourth since the Deepwater Horizon rig explosion in April.   With such an environmental and economic crisis present, the president needs to exert leadership to protect our precious coastal resources and clean up the spill, says Nicolas Loris, a research assistant at the Heritage Foundation's Roe Institute for Economic Policy Studies. 

His message was the wrong one, says Loris.  Instead, he continued to politicize the crisis by pushing for cap and trade legislation and to establish a separate claims fund -- financed by BP -- that will do very little to address the issue at hand.  President Obama is right in saying that the Gulf region will bounce back, but not with the policies of cap and trade and banning offshore drilling that he's suggesting. 

The President has been using the oil spill to push cap and trade and "clean" energy investments forward: 

  • But global warming legislation -- placing caps on carbon dioxide emissions -- would do nothing to improve clean-up or to prevent future spills.
  • It would distract from the very efforts to clean up and stop the oil that must be the top priority now.
  • Nor would emissions caps magically create new problem-free sources of alternative energy.
  • Instead, global warming legislation would raise energy costs for all Americans and kill much needed jobs. 

Under a regime like the President proposed, higher energy costs would spread throughout the economy as producers everywhere try to cover their higher production costs by raising their product prices, further impacting Americans.  The result will be a much slower economy and lost jobs at a time when the top priority for Americans is economic growth.  This is hardly the bounce back for the Gulf's economy, says Loris: 

  • Implementing the House-passed Waxman-Markey cap and trade bill would put a chokehold on Louisiana's economic potential, reducing the state's economy by $8.33 billion in 2035.
  • Beginning in 2012, job losses will be 21,832 higher than without a cap-and-trade bill in place.
  • And the number of jobs lost will only go up, increasing to 31,468 by 2035. 

Source: Nicolas Loris, "The President's Oil Spill Speech," Heritage Foundation, June 15, 2010. 

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