Analysis of Federal Climate Change Legislation

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Summary
The creatively-named American Clean Energy and Security Act (H.R. 2454) is comprehensive legislation that would effectively impose a multitrillion-dollar energy tax on businesses and consumers, threatening the future prosperity of Georgia and the nation. The so-called Waxman-Markey bill, a top priority of the Obama administration and Congressional Democrats, would:

• Attempt to regulate global warming by cutting carbon dioxide (CO2) emissions through a cap-and-trade program
• Require the nation to rely on renewable sources for a much higher percentage of its energy supply
• Construct a "smart grid" to store energy from intermittent sources such as wind and solar
• Mandate or subsidize new energy efficiency levels for utilities, buildings, vehicles and appliances
• Impose a carbon tariff on foreign manufacturers and importers
• Subsidize "clean" energy projects and "green" jobs in the U.S. and developing nations

Criticism and Impact
The Georgia Chamber of Commerce joins the U.S. Chamber and numerous other business and free-market organizations in opposing Waxman-Markey. Among other provisions, the bill would:

• Impose an effective tax of hundreds of billions of dollars a year on American citizens and businesses; cut U.S. gross domestic product by at least $9.6 trillion; and increase the federal debt by 26 percent
• In the year 2012 alone, cut gross state product in Georgia by over $4.5 billion, decrease personal income in Georgia by over $5.5 billion, and add $168 million to state and local budget deficits
  
• Drastically hike energy costs for Georgia businesses in all sectors and eliminate a key Peach State edge in economic development
• Destroy up to 2.5 million jobs a year -- including over 50,000 in Georgia -- resulting in a net loss of two existing jobs for every "green" job created (and only one in 10 green jobs is permanent)
• Double the cost for Georgia families to fill their gas tanks and pay their power bills -- an extra $1,500 or more a year for the average household -- and inflate the cost of food and anything else produced with electricity or delivered by truck
• Disproportionately punish low-income, rural and senior Americans -- and states like Georgia, whose carbon-free nuclear, hydro and biofuel sources don't count as "clean and renewable," and which has poor wind and solar potential
• Place Georgia and the entire United States at a distinct economic disadvantage to -- and spark a trade war with -- countries like China and India that have made it clear they have no intention of creating such restrictions

Critics note these costly and damaging measures would lower average world temperatures by only a fraction of a degree, resulting in virtually no impact on the global climate. They point out that cap-and-trade programs have already proven ineffective in places like the European Union, where the major players have reaped considerable profits from higher energy prices yet failed to achieve significant reductions in carbon emissions. They also stress that the cost of these programs is often grossly underestimated. For example, the price tag on Britain's 2008 Climate Change Act was recently revised to more than $30,000 for every family through 2050 -- twice the original forecast.

Congressional Action
The 1,400-page bill was introduced May 15 by House Energy and Commerce Committee Chairman Henry Waxman (D-CA) and Subcommittee Chairman Ed Markey (D-MA). It passed the committee May 21 by a vote of 33-25 and was approved by the House June 26 by a slim 219-212 margin. Georgia Reps. John Barrow, Paul Broun, Nathan Deal, Phil Gingrey, Jack Kingston, John Linder, Jim Marshall, Tom Price and Lynn Westmoreland voted against the bill; Reps. Sanford Bishop, Hank Johnson, John Lewis and David Scott voted for it.

The GOP has introduced a number of counter-proposals, including the American Energy Innovation Act (H.R. 2300; summary here), developed by the Republican Study Committee under Georgia Rep. Tom Price and filed May 7. Another is the American Energy Act (H.R. 2846; summary here), introduced by Republican leadership on June 12. Both bills emphasize incentivizing development and conservation of both renewable and conventional energy sources, rather than limiting CO2 emissions.

Regulatory Action
On April 17, the U.S. Environmental Protection Agency issued an "endangerment finding" regarding CO2 and other greenhouse gases. The EPA ruled that global warming poses a serious threat to public health and safety, paving the way for the federal government to regulate anything that emits sufficient quantities of carbon dioxide under the Clean Air Act. This could include everything from farms and industrial facilities to office buildings and even schools that use natural gas for heat.

The GOP alleges Democrats are using the threat of EPA regulation to cast Waxman-Markey as the lesser of two evils in order to ensure passage of the bill. They also point to an interagency memo that suggests EPA did not sufficiently analyze the impact of CO2 on human health in making its determination, and an internal study suppressed by the EPA that found the agency was relying on outdated research and ignoring major new developments in reaching its decisions.

In related action, the White House on May 19 announced tough new average fuel economy standards of 35.5 mpg by 2016. The administration is also pushing to increase the share of ethanol required in gasoline to 15 percent from 10 percent.

Links
Read editorials and op-eds on this issue in the Wall Street Journal, or visit the Heritage Foundation for more information. You can also click here to contact Georgia's U.S. Senators and Representatives and tell them you oppose the bill.

Impact by Congressional District
Source: The Heritage Foundation