Nutty Scheme of the Century Passes U.S. House 
By John McClaughry

The closer you look at the enormous Waxman-Markey energy tax bill that passed the U.S. House on June 26, the more you come to realize what it requires you to believe, the more you realize what drastic changes it promises to impose upon America, and the more you grasp what it will cost Americans in higher prices, a crippled economy, and lost jobs, the more you - a normal person - will conclude that this is crazy, costly, and dangerous.

The whole disgraceful exercise is founded on the premise that human emissions of carbon dioxide are producing dangerous "global warming". There are plenty of statements to this effect by Al Gore, Bill McKibben, Environment Defense, Sierra Club, the UN's IPCC, and NASA's eccentric climatologist James Hansen, who is urging citizens to commit civil disobedience to halt fossil fuel combustion.

The clamor of these enviro politicians is totally unsupported by real science. "Global warming" disappeared a decade ago, forcing the enviro propagandists to switch to the not-disprovable "climate change".

Carbon dioxide produced by fossil fuel combustion is a fraction of one percent of the atmosphere. It's tiny in comparison to the most important greenhouse gas, water vapor (that fortunately can't be taxed or regulated).

The global warming scare is based on computer models of the atmosphere that - if the operator suitably jiggers the parameters - have been made to predict startling global temperature increases in the 21st century. However the computer models are unable to reproduce the known global temperature record since 1950, they failed to predict the current cooling trend, and they predicted a upper troposphere hot spot in the tropics that clearly does not exist.

The alarmists brought out ice core studies to show that a rise in carbon dioxide concentration (caused by what?) hundreds of thousands of years ago led to higher temperatures. That fell apart when it turned out that the higher temperatures caused higher carbon dioxide concentrations (as CO2 outgassed from warmer oceans), not the other way around.

Intellectually corrupt scientists and politicians are willing to sign on to the "sky is falling" argument, because that gives them cover to get their hands on enormous money flows. The Waxman-Markey bill aims to drive up the price of fossil fuel energy, to depress CO2 emissions.

The mechanism is a cap on carbon dioxide emissions from (to start with) power plants, vehicles, and energy-intensive industries.

Obama first proposed to auction off permits allowing the emission of one ton of carbon dioxide. Every utility and industry would have to buy enough permit units to stay in business. The cost of buying the permits would of course be passed on in everyone's electricity, food, fuel and product bills. The proceeds of the government's auction of this artificially valued funny money would fund a host of "clean energy" and "green jobs" schemes.

But as Congress labored to produce a bill, a furious big-money corporate lobbying campaign forced members to start demanding that the government initially give away the credits to their favored industries, such as coal-burning utilities. By the time the bill squeaked by to passage (219-212) with concession-bought votes, 85% of the initial credits were handed out free, in the name of "consumer protection".

Of course if consumers were permanently protected against the bill's carbon price increases, the whole point of the bill - to suppress carbon dioxide emissions - would be defeated. The key here is that the backers were forced to make the bill relatively painless in its first few years to get it through the House. Then to pacify the restive enviros the cap will be gradually screwed down, the price of the emission credits will escalate, and consumers will be forced to pay untold billions of dollars in what amounts to new energy taxes hidden in the cost of almost everything they consume.

The bill also contains a provision, demanded by labor unions, to put an import tax on products manufactured in the Third World, whose governments have steadfastly stated that they have no intention to abide by any emissions limitation scheme, unless the developed nations transfer enough wealth to them to get them to change their mind. Even Obama balked at this, since any such import tax would trigger a trade war.

If carried out as advertised, this prodigious bill promises to reduce global temperature by a fraction of one degree F by 2100. For this, Congress is going to impose an enormous hidden tax on every American consumer, lavish benefits on countless rent-seeking special interests, launch dozens of new government spending and regulatory programs, employ thousands of new bureaucrats, promote billions of dollars in wealth transfers to Third Worlders peddling dubious carbon offsets, and drive a large part of our economy overseas?

You're thinking, "they've got to be kidding." But they're not.

John McClaughry is President of the Ethan Allen Institute.