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Cap and Trade Fails the Test of Common Sense

Written by Western Business Roundtable

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Western Business Leaders Say "Cap-and-Trade" Proposals Are Failing The Public's "Test of Common Sense"

Broad-based coalition says that Congress should 'go back to the drawing board' and develop climate legislation that follows 10 'common sense' principles

DENVER, CO (Sept. 17, 2009) -- A coalition of Western business leaders working on greenhouse gas control technologies says that the leading cap-and-trade proposal in Congress is no longer politically viable because it "fails the public's test of common sense," while levying crushing new costs on citizens in the middle of a recession.

Instead, the Western Business Roundtable says that if Congress develops climate change legislation that follows "10 Common Sense Principles," released by the Roundtable this week, it would gain the acceptance of a public increasingly skittish about sweeping proposals from the federal government.

"If Congress goes back to the drawing board and develops climate legislation that follows these 10 common sense principles, it would undoubtedly be embraced by the American people, and it would lead to an explosion of technology innovation that would help us address climate concerns," said Roundtable President and CEO Jim Sims.

"The Waxman-Markey bill in Congress, as well as other highly-complicated regional efforts to impose cap-and-trade schemes on the economy, are on political life support now primarily because citizens have awakened to the crushing costs, job losses and market uncertainty these bills would inevitably cause," Sims said. "Voters demand that large government initiatives like this pass the 'test of common sense.' They want clear evidence that they can count on these programs to deliver more benefits than they cost. The plans being pushed now fail on all these counts, and that's why Congress and other climate policy initiatives need to go back to the drawing board."

Sims said that Roundtable companies "are on the forefront of developing the breakthrough technologies needed to reduce air emissions of all types. Reasonable rules of the road by the government are needed to guide future investments. But those rules would be much more effective if they focused on incentives to accelerate technology development by the private sector, rather than on government micro-management of technology development."

The Roundtable's 10 Common Sense Principles for federal climate legislation follow:

  1. Congress is best suited to determine how a national greenhouse gas emissions reduction program should work. Therefore, any bill should explicitly preempt the Environmental Protection Agency from regulating greenhouse gases under the Clean Air Act.
     
  2. Federal action should aim to reduce greenhouse gas emissions, while also allowing for robust economic growth and job creation across all sectors. Legislation that aims to reduce emissions by forcing a further contraction of our economy -- by artificially constricting energy supply and encouraging higher prices -- will choke any economic recovery and will be soundly rejected by the American people. Therefore, cap-and-trade legislation should include some form of "safety valve" to ensure that the American people are not subjected to wild swings in energy prices or runaway cost increases.
     
  3. Federal action should incorporate, as part of any greenhouse gas emissions reduction program, a fully transparent cost-benefit assessment that yields a net positive outcome and achieves wide consensus. Consumers must be made fully aware of the potential economic impacts of proposed policies prior to any vote in the Congress.
     
  4. Federal action should encourage the rapid research, development, demonstration and deployment, through public-private partnerships, of a broad spectrum of supply-side and demand-side technologies and practices aimed at managing greenhouse gas emissions.
     
  5. Federal action should allow the electric utility sector to continue to supply consumers with adequate supplies of clean, affordable and reliable energy, and to recover all costs necessary to achieve any greenhouse gas emission reduction levels sought by public policies.
     
  6. Federal action should involve all sectors of the economy, all sources and sinks and all types of greenhouse gases.
     
  7. Federal action should recognize that climate change is a global phenomenon that requires comprehensive, long-term and coordinated worldwide responses. Unilateral action by the U.S. -- without comparable commitments to reductions by emitting nations like China and India -- will harm our ability to compete in world markets, export U.S. jobs overseas and will result in no measurable change in future climates.
     
  8. Federal action should recognize that the time frame for implementation of any greenhouse gas emission reduction requirements must be tied to technology availability, reliability and economic feasibility in order to avoid unacceptable impacts on consumers and the electricity grids.
     
  9. Federal action should target revenues generated by a climate change program to the rapid development and deployment of technologies to capture and store greenhouse gases, to appropriate assistance programs that help end-use consumers deal with higher energy costs, and to reasonable climate mitigation initiatives.
     
  10. Federal action should allow greater access to public lands (both onshore and offshore) for the development of domestic energy resources -- such as renewables, oil and gas, oil shale, coal and nuclear power -- so that America can continue to seek greater energy independence.

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