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Cap and Trade or Hook and Jab?

March 14, 2009

According to the Congressional Budget Office (CBO):

  • Price hikes from a 15 percent cut in emissions would cost the average household in the bottom-income quintile about 3.3 percent of its after-tax income every year; that’s about $680, not including the costs of reduced employment and output.
  • The three middle quintiles would see their paychecks cut between $880 and $1,500, or 2.9 percent to 2.7 percent of income; the rich would pay 1.7 percent.

But the greatest inequities are geographic and would be imposed on the parts of the United States that rely most on manufacturing or fossil fuels — particularly coal, which generates most power in the Midwest, Southern and Plains states, says the Journal:

  • Coal provides more than half of U.S. electricity, and 25 states get more than 50 percent of their electricity from conventional coal-fired generation.
  • In Ohio, it totals 86 percent, according to the Energy Information Administration.
  • Ratepayers in Indiana (94 percent), Missouri (85 percent), New Mexico (80 percent), Pennsylvania (56 percent), West Virginia (98 percent) and Wyoming (95 percent) are going to get soaked.

Source: Editorial, “Who Pays for Cap and Trade?  Hint: They were promised a tax cut during the Obama campaign.” Wall Street Journal, March 9, 2009.
Strategies  and Incentives for Carbon Avoidance are smarter to create a better future, not more taxes and more regulation.

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