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Congressional Democrats are working to pass a massive new energy tax on all Americans simply for using the only energy option available to them – electricity. Congressman Henry Waxman, Chairman of the House Energy and Commerce Committee, has introduced the so-called “American Clean Energy and Security” legislation, which implements a cap and trade system or more accurately: cap and tax.
A cap and tax system sets a limit, or cap, on carbon dioxide emissions. The effect would amount to rationing any emissions that produce carbon dioxide. Essentially, the federal government would set some sort of cap on total carbon dioxide emissions and establish a yet to be defined carbon allowance on each utility or company. Companies who exceed their allowance will be taxed by the federal government. Those companies that emit less carbon dioxide than permitted by the allowance may sell credits to other companies that exceed government imposed allowances.
Moving into a cap and tax system will place the United States economy at a distinct competitive disadvantage because it would place significant additional costs on American manufacturers and cede market share to overseas competitors not subject to limits on greenhouse gas emissions. Cap and tax not only applies to the traditional energy producers. Domestic industries like paper, cement, fertilizer, steel, and glass manufacturers and many others also worry that increased cost burdens imposed by climate-change laws will put them at a severe competitive disadvantage to their international peers. Even Energy Secretary Chu stated at a House hearing, "If other countries don't impose a cost on carbon, then we will be at a disadvantage."
We must change the direction this Congress is headed in addressing this issue. Cap and tax legislation will mean that electric bills will go up in all American households – every time you flip an electric switch, you will pay more on your monthly electric bill as a result of this national energy tax. At a time when folks are struggling to pay the bills, we should not be adding additional costs to their utility bills. Rather than adding additional taxes we need legislation that will increase the supply of American-made energy, expand and encourage the use of renewable and alternative American fuels, fund research and development of new and innovative energy technologies, and increase energy efficiency and conservation to reduce consumption and protect our environment.
That’s why I am pleased to be a cosponsor of the American Energy Innovation Act, comprehensive energy legislation which represents a fiscally responsible approach to reducing our dangerous dependence on foreign energy, providing a cleaner environment and putting Americans to work. Specifically, the legislation encourages innovation within the energy market to create the renewable fuel options and energy careers of tomorrow, promotes greater conservation and efficiency by providing incentives for easing energy demand and creating a cleaner more, sustainable environment and increasing the production of American energy by responsibly utilizing all available resources and technologies and streamlining burdensome regulations.
I believe it is important for our nation to reevaluate our energy policies. However, we cannot ignore the fact that America's economy is intrinsically linked to the availability and affordability of energy. In order to build a strong economy and create more jobs, we need reliable and affordable energy supplies. The bottom line is that we need energy policies which encourage investment in environmentally sound, cost-effective practices without stifling innovation and setting our economy back.