The EPA rules: All pain, no environmental gain
Interested in paying a massive new energy tax? Especially one that would bring no environmental benefit? Probably not, but that's what you can expect in the wake of draft regulations just released by the Environmental Protection Agency — ones that could cut carbon dioxide emissions from existing power plants by 30 percent.
President Obama warned us it was coming. In 2008, he said that electricity prices would “necessarily skyrocket” under his cap-and-trade proposal. And when our elected officials rejected that, he said there was more than one way to skin the cat.
But now he's singing a different tune. Promoting the new regulations, Obama said, “Your electricity bills will shrink as these standards spur investment in energy efficiency, cutting waste and, ultimately, we're going to be saving money for homes and for businesses.”
Electricity bills will shrink? Is that a “if you like your insurance, you can keep it” type of promise?
The EPA has different targets for different states and would allow states flexibility in implementation plans. But flexibility would merely shift the costs around — not prevent them from happening.
If anything, state and regional implementation plans would protect special interests, which could then pass the costs on to American families.
Whether it is by cap-and-trade policies, regulation or a straightforward tax, restricting carbon emissions would inflict higher energy costs on American families and businesses. Families would pay more to use less electricity. The costs would reverberate throughout the economy, as affected industries pass higher costs onto consumers. Simply put, consumers would consume less and producers would produce less, resulting in income cuts, jobs destroyed and lost economic output.
The economic pain stemming from the EPA's regulations would spread throughout the country, but some people would be harmed more than others. A tax that increases energy prices would hit America's poorest families the hardest. The median family spends about 5 cents out of every dollar on energy costs, but low-income families spend about 20 cents.
Obama is right to say climate change is a fact. But the controversy is about whether human activity is the primary driver.
No matter what one believes, one thing is clear: The regulations would not have any noticeable impact on global temperatures. That is largely because future carbon emissions will come overwhelmingly from developing nations such as China and India.
Wealth creation — for which affordable, reliable energy is a critical input — has provided Americans with the capacity and wherewithal to care for the environment. Free economies better equip people to tackle environmental challenges and address climate-related events, whether human-induced or not.
But the results of these EPA regulations will be fewer jobs and less income for American families. And all for a negligible benefit.
Nicolas Loris is a Heritage Foundation fellow specializing in energy and environmental issues. Ralph R. Reiland is off today.