Senators Boxer and Kerry unveil their cap and trade bill

Senators Boxer and Kerry unveiled their cap-and-trade bill energy tax bill today. [Boxer-Kerry bill available here.] The bill is very similar to the drafts they released yesterday. It’s too early to fully analyze the bill, but a few things are clear from the outset.

1. It appears the Senators do not trust cap-and-trade to produce the result they want. If they did, the bill would not need to increase hundreds of pages of additional (and costly) energy regulations.
2. In spite of their claim that this bill will create jobs, portions of the bill suggest the Senators understand that their legislation will be costly for Americans. This is why the bill contains subsidies for people who lose their jobs as a result of the bill’s provisions.
3. It appears that the Senators want the Environmental Protection Agency (EPA) to regulate greenhouse gases using the Clean Air Act. Unlike the Waxman-Markey bill, the Boxer-Kerry permits EPA to move forward with regulations.[1] Even the Washington Post believes that it is not efficient for EPA to regulate greenhouse gases using the Clean Air Act.
4. A recent study shows that the Waxman-Markey bill will redistribute $14 billion per year from the nation’s poorest citizens to the nation’s richest citizen. Because the Boxer-Kerry bill is functionally similar to Waxman-Markey, the Boxer-Kerry bill will benefit the rich at the expense of the poor.

A couple other interesting features:

• The bill’s summary does not describe the bill as “cap-and-trade” bill. Instead, the cap-and-trade provisions are called “pollution reduction and investment.” Apparently, Americans are seeing cap-and-trade for what it is—a tax.
• The bill’s summary only mentions “greenhouse gases” once and does not mention carbon dioxide. Instead, the summary describes these emissions as “carbon pollution.” This is a misnomer, as New York Times reporter Andrew Revkin has pointed out. Not all greenhouse gases contain carbon (nitrous oxide and sulfur hexafluoride for example) and not all emissions which contain carbon are greenhouse gases (carbon monoxide is an example). It would seem that Senators Boxer and Kerry prefer a sound bite to accurately portraying the emissions they seek to regulate.

[1] As we have noted before, Waxman-Markey’s attempt to limit EPA’s ability to regulate greenhouse gases is ineffectual. The limitation only prohibits EPA from regulating greenhouse gases based on the impact on “global climate change.” (Sec. 831-835) That language does not prohibit EPA from regulating carbon dioxide based on non-global climate change concerns such as ocean acidification. This is especially telling because there are a number of sections in Waxman-Markey where climate change and ocean acidification are coupled (see e.g. Sec. 471).

The Institute for Energy Research (IER) is a not-for-profit organization that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets. IER maintains that freely-functioning energy markets provide the most efficient and effective solutions to today’s global energy and environmental challenges and, as such, are critical to the well-being of individuals and society.