Popping Hot Air Balloons at the Senate Cap-and-Trade Hearing

Iain Murray of the Competitive Enterprise Institute testified Thursday at the Senate Environment and Public Works Committee’s hearing on S. 1733, Clean Energy Jobs and American Power Act, i.e., Kerry-Boxer. We commend his written statement about the proven failures of the European cap-and-trade regime, as well the issues involved with the developing world.

For an overview of his arguments and yesterday’s goings on at the Senate committee hearing, see Murray’s three posts at National Review Online’s The Corner blog:

I had two main points. The first, one that was comprehensively ignored by the Democrats on the Committee and the other witnesses, is that the only big example we have for a cap and trade program for greenhouse gases, the European Union Emissions Trading Scheme (ETS), has been an expensive failure. Indeed, the vast cost — already far more than “a postage stamp a day” for European households — has been confirmed in a new report by my colleagues at the Taxpayers’ Alliance in London.

The ETS, the report finds, cost the EU economies as much as $171 billion in 2008. The cost to individual households in the U.K. was about $200. Moreover, climate change policies now account for 14 percent of the average household’s electricity bill and 21 percent of the average industrial electricity bill.

Murray also makes a few sharp observations about the protectionism stalking the committee debate.

The other main point in my testimony was that China, India, and the other developing nations will not accept any limitations on their emissions. The other panelists went to great lengths to pretend that this doesn’t really matter, but at the same time they all argued that all nations must accept binding emissions targets. For instance, they argued that Copenhagen must not be seen as Kyoto II. But China, India, and the G77 have stated firmly and without any room for argument that the Kyoto framework must continue: Developed nations must cut emissions while developing nations can take other actions, not requiring cuts in emissions. This is a circle that cannot be squared.

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