When Barry Sotero saw his attempt at cap and trade rebuffed by Congress early in his first term, he set his mind to taking executive action when the time was right. With the prospect of spending the final two years of his term facing a hostile Republican-led Congress, apparently Obama has decided the time for legacy building is now. With strict new rules due out June 2, the EPA reportedly will aim to cut carbon emissions 20%. The U.S. Chamber of Commerce contends this will cost Americans $51 billion in annual GDP losses, $289 billion in higher electric bills and an average of 224,000 jobs annually through the year 2030.
This isn’t just a war on coal; it’s a war on the entire U.S. economy.
While the regulations haven’t been released for public comment, the speculation is that they will focus on initiatives already in place, such as one in several northeastern states establishing a modified cap-and-trade system for utilities doing business there. The Regional Greenhouse Gas Initiative has promoted the transfer of nearly $1.7 billion from utilities and other purchasers to governments in the 10 states that have been a part of the RGGI. (Current membership is nine states, as New Jersey withdrew from the pact in 2012.)
It’s generally agreed that the elimination of coal-fired power plants is the target of these new EPA regulations. By doing so, 40% of our current electricity production will be taken offline with little to replace it. Natural gas can take up some portion of the slack, but its extraction, too, continues to be opposed by environmentalists.
At a time when first-quarter GDP was revised to show a decline for the first time in three years, the prospect of losing even more economic ground is particularly worrisome. While this quarterly retreat was (predictably) blamed on harsh winter weather in several parts of the country, coming higher heating costs will create a real headwind for future winters – all to pursue the vanity of fighting global climate change. (For an example of this vain effort, consider that the rest of the world will outweigh our decrease in emissions with an increase five times the size.)
The Chamber of Commerce estimates compliance costs will total $480 billion by 2030. Sean Hackbarth of the Chamber writes, “To put this into perspective, at an annual cost of $9.6 billion annually, the Mercury and Air Toxics Standard (MATS) is EPA’s most-expensive regulation on power generation. Potential EPA carbon regulations could be ‘nearly triple that amount, at $28.1 billion annually’ from 2014-2030, the report finds.”
Oh, and by the way, the EPA’s Inspector General warned in a report Thursday, “The EPA lacks a due diligence process for potential fraudulent environmental data.” And existing processes for eliminating bad data are “out of date or unimplemented.” So they’re going to wage war on the economy using made-up numbers.
Unfortunately, the Obama administration seems to look at these effects through rose-colored glasses, and the coming public comment period for these regulations is more for show than anything else. Barack Obama is bound and determined to establish his legacy, part of which will be that energy prices will “necessarily skyrocket” thanks to his climate change agenda.