What is Cap and Trade?

To address concerns that global warming threatens our planet, activists and politicians are pushing for a “cap-and-trade” program that would limit and tax carbon dioxide released by power plants, cars, factories and other facilities. It is a very complicated regulatory scheme that penalizes businesses and people who use energy or electricity generated from oil, gasoline, natural gas and coal (fossil fuels).

Under cap and trade, Congress would place a limit or “cap” on the amount of carbon dioxide that our nation would be allowed to generate as a whole, and that limit would decrease drastically over time. Utilities, companies and business would be issued permits that grant them a certain “allowance,” or permit, saying how much carbon dioxide they can put into the air each year. If they cannot stay within that limit, they will have to switch to renewable energy from wind or solar, find ways to capture the carbon dioxide (CO2) and store it, or buy more “allowances” from companies that don’t need as much energy.

Those who support cap and trade don’t like to call it a tax, especially during a recession. Because taxes are politically unpopular, politicians and activists often refer to cap-and-trade costs as “user fees,” “emission limits,” “permits” and “trading.”

But it definitely is a tax on carbon – and it will hurt poor and middle class families and small businesses the most. In fact, when they’re more honest, some politicians actually admit that cap-and-trade really is a hidden tax that will send energy prices skyrocketing:

“Cap-and-trade is a tax, and it’s going to be a great big one.”

Congressman John Dingell (D-MI)

“[It’s] the most significant revenue-generating proposal of our time.”

Senator Ben Cardin (D-MD)

“Electricity rates would necessarily skyrocket” under cap and trade. Industry will have to “retrofit its operations. That will cost money, and they will pass that cost on to consumers.”

President Barack Obama

Cap and trade penalizes and taxes everything we heat, cool, drive, make, grow, eat and do – because nothing is possible without energy. Our economy runs on energy, and 85% of the energy America uses is fossil fuels and wood. The price of everything we buy and do will skyrocket. 

On top of that, cap and trade is incredibly complex. It will be administered by profit-seeking “carbon management” firms, regulated by thousands of government bureaucrats, and paid by every family, driver, business, school district, hospital, airline and farmer.

A lucky few will get rich. For everyone else, cap and trade will be all pain – for no gain.

The PAIN will be intense and widespread

The House of Representative passed a cap-and-trade bill in July. It requires that carbon dioxide emissions be reduced 83% below 2005 levels by 2050. That would send them back to levels last seen in 1908!

And that’s before accounting for the far smaller number of people living back then and the old-fashioned manufacturing, transportation and electrification systems of a century ago. Once those factors are taken into account, 2050 carbon dioxide emissions would have to equal what the United States emitted just after the Civil War!

Obviously, that means enormous changes in our energy costs, lifestyles and living standards. It means politicians, environmental pressure groups, unelected bureaucrats and judges will get to dictate:  

  • What kind of home you can have, and how warm or cool you can keep it. What kind of light bulbs you can use. What kind of car you can have, and how far you can drive it each year. 
  • How your food can be grown, how products can be manufactured, how far they can be shipped, and by what means. How far you can travel on vacation, and how you can get there.

It could also mean people receive personal “carbon allowances” that limit how much CO2 a person can emit annually and track energy use through credit card and other purchases. To call this a Green Nanny State would not be an exaggeration, with energy rationing and constant intrusion in our lives.

Some INCONVENIENT TRUTHS about alternative energy

Burning coal does create carbon dioxide. But coal generates 60-98% of the electricity in Ohio, Indiana and 18 other states, to support millions of manufacturing jobs. If we impose cap-and-trade policies, electricity rates will skyrocket – and many jobs will migrate to China, India and other countries.

Some say we could easily use more ethanol, wind and solar power, to produce other kinds of energy with less CO2. But relying on ethanol would mean growing corn or switchgrass on farmland the size of Montana, and using vast amounts of water, fertilizer, diesel fuel and natural gas. And when ethanol is burned, it gets less mileage per tank of gasoline, and emits more CO2 per mile than gasoline alone.

Wind and solar power would mean covering millions of acres of scenic habitat and farm land with huge turbines and solar panels. Hundreds of millions of tons of concrete, steel, copper, fiberglass and “rare earth” minerals would be needed to build them and thousands of miles of new transmission lines to get the expensive renewable electricity to distant cities. One expert calculated that just providing electricity for New York City would require wind turbines covering the entire state of Connecticut! Because the turbines and panels only work 25% of the time, back up natural gas generators would also be needed.

Impacts on JOBS and FAMILIES

Independent experts and even the Treasury Department say cap and trade would destroy over a million jobs over the coming decades … raise energy costs for the average American family by $1,400 to $3,100 per year … and send overall food and living costs upward by $4,600 annually.

Wealthier families can absorb these costs. But cap-and-trade will hit middle class families hard. And “families at the bottom of the economic scale already spend up to half of their incomes on gasoline, heating and cooling,” says Bishop Harry Jackson, Jr., a respected pastor who shepherds an inner-city church. They can’t afford any more pain.

Families could be forced to pay for skyrocketing energy and food costs from their college, retirement and vacation budgets. Hospitals and school districts would have to raise fees and taxes, or cut services. Cities and states would have to cover rising welfare and unemployment costs, as tax revenues dwindle. Tourism-based businesses and economies would get hammered, as fewer people could afford to travel.

Clearly, the threat is not from global warming. It is from policies imposed in the name of preventing climate disasters that exist only in computer models, press releases and Hollywood movies. Perhaps worst of all, as bad as these impacts are for people in the United States, they are even worse for poor countries.

Two billion people in poor countries still do not have electricity! That means no refrigeration, to keep food and medicines from spoiling. No water purification, to reduce baby-killing intestinal diseases. No modern heating and air conditioning, to reduce hypothermia in winter, heat stroke in summer – and lung disease year-round, because people are constantly breathing pollutants from cooking and heating fires.

It means no lights or computers, no modern offices, factories, schools, shops, clinics or hospitals. It means permanent poverty, disease and premature death – because some people care more about far-retched threats to bugs and polar bears, than about real, immediate, life-or-death threats to people, caused by policies that prevent them from getting the energy that will improve, sustain and save their lives.

The GAIN will be minimal to nonexistent.

Even the intense pain of slashing America’s carbon dioxide emissions by 83% over the next 40 years – all the way back to 1908 levels or earlier – will have virtually no effect on global temperatures and climate.

In fact, one climate researcher used the alarmists’ own computer models to calculate that even this pain and sacrifice would result in global temperatures rising just 0.1 degrees F less by 2050 than not cutting US carbon dioxide emissions at all. And that assumes rising CO2 causes global warming. 

That’s because CO2 emissions from China, India and other countries would quickly dwarf America’s job-killing reductions. China is building a new coal-fired power plant every week and putting millions of new cars on its growing network of highways. So is India. They’re trying to reduce poverty, modernize their nations, improve human health, and ensure that every family, office, school and hospital has electricity.

After years of criticizing the United States for not signing the Kyoto global warming treaty, Europe will build 40 new coal-fired power plants by 2015. Germany plans to build 27 coal-fired electrical generating plants by 2020. Italy plans to double its reliance on coal in just five years.

So WHO will benefit?

The only people who will gain from penalizing energy use and over-regulating our economy are:

  • Emission traders like Al Gore, who hope to make billions of dollars from cap and trade; 
  • Companies that get favored treatment (low-cost emission permits) under cap-and-trade laws, and can make big profits from selling their excess permits; 
  • Government bureaucrats who will regulate our economy, and police the trillion-dollar cap-and-trade market to prevent fraud and price gouging; 
  • Universities, scientists, environmental activists and renewable energy companies, which will continue to share $6-10 billion per year in taxpayer money, to conduct climate research (mostly warning about imminent global warming disasters), and build wind, solar and other projects; and 
  • Third World dictators, who will get carbon offset and cap-and-trade money to deposit in private bank accounts, for selling their people’s right to build hydrocarbon-fueled electrical generating plants.

Everyone else will pay dearly.

MYTHS about green energy and green jobs

For all this pain, there won’t even be net benefits from so-called “green energy” alternatives to the oil, natural gas and coal that now power 85% of the US economy. America’s oil and natural gas industry alone supports more than 9 million American jobs and contributed $1 trillion to the economy in 2007, according to a recent PricewaterhouseCoopers study. Coal generates one-half of all US electricity.

By contrast, wind and solar power together provide less than 1% of US energy – and do so only because of government renewable energy mandates and billions in subsidies and tax breaks. Increasing that to 10 or 20% of US electricity will be difficult, especially considering real-life experiences like these:

Spanish taxpayers spent $754,000 in subsidies for each “green” job created by the wind turbine industry (mostly jobs installing towering turbines) – and destroyed 2.2 regular jobs for each green job, primarily because pricey “renewable” electricity forced companies to lay off workers to stay in business. 

With the aid of a large federal grant, Denver spent $720,000 to install solar panels on its Nature and Science Museum. The panels will reduce electricity bills. But it will take 110 years to save enough on those bills to pay for the panels – and the panels will only last 25 years!

Denmark actually generates only 4-18% of its electricity from wind, while its consumers pay the highest electric rates in Europe. It sends half of its taxpayer-subsidized power to Norway, Sweden and Germany. The rest of Denmark’s electricity comes from domestic or imported coal, hydroelectric, gas and nuclear.

The SCIENCE does not support climate disaster claims

President Obama says “dangerous carbon emissions contaminate the water we drink and pollute the air we breathe.” But carbon dioxide is not a pollutant. It is a vital plant fertilizer. It’s found in the air we exhale, and the beer, soft drinks, champagne and Perrier Water we drink.

More than 700 climate experts and 31,000 scientists say carbon dioxide has zero to minimal effect on Earth’s temperature, climate and weather. They back up that conclusion with solid evidence.

The Earth’s temperature increased 1 degree F during the last century, when warming and cooling trends are combined. They rose from 1915-1940 (1934 was the century’s warmest year), fell from 1940-1975, rose again from 1975-1998, then stabilized between 1998-2005, and then declined slightly 2005-2008 – as CO2 levels steadily climbed higher and higher. That clearly shows carbon dioxide does not cause global warming.

Computer models of climate and climate change are not “real world” evidence. They are no more reliable than computer predictions of future Super Bowl winners and scores, and not one of them predicted the recent planetary cooling. Their disaster scenarios are no more valid as a basis for laws, public policies and cap-and-trade schemes, than the special effects in “The Day After Tomorrow” or “Jurassic Park.” 

The UN’s Intergovernmental Panel on Climate Change insists that human carbon dioxide emissions drive global warming. It has never seriously investigated the possibility that climate change might be natural – which was clearly the case when the sun, shifts in ocean currents, and other natural forces caused the Ice Ages, interglacial periods, Roman and Medieval Warm Periods, Little Ice Age, Dust Bowl, and droughts that decimated Anasazi, Chinese, Inca and Mayan civilizations.


There is no scientific basis for imposing cap-and-trade schemes. They would inflict massive pain for no gain on American businesses and families, and create an intrusive Green Nanny State that destroys jobs, reduces personal freedoms, and hobbles economic opportunities and civil rights.


Articles and Booklets

Joseph D’Aleo, Newsweek’s “Begley flunks calculus, science and politics,” Energy Tribune, September 15, 2009. Newsweek knew it was proponents of man-made global warming fears who enjoyed a monumental funding advantage over skeptics ($50 billion for alarmists versus $19 million for skeptics). But the magazine ignored the facts, and wrote a biased, deceptive screed. Read D’Aleo’s article here.

Paul Driessen, “The immorality of Waxman-Markey: Intense pain, no environmental gain,” Investor’s Business Daily, June 16, 2009. If the pending Waxman-Markey energy and climate bill becomes law, utility bills will soar, farm than if America does nothing. Read the article here.

Fiona Kobusingye, “Africa’s real climate crisis: It’s not global warming. It’s a science, priorities, honesty and morality crisis,” townhall.com, July 29, 2009. Preventable diseases kill 6.5 million Africans every year. Over 750 million people in Sub-Saharan Africa still do not have electricity. Africans need to stop listening to global warming witch doctors, who tell them to keep living “indigenous,” impoverished lives. Read the article here.

Joanne Nova, The Skeptic’s Handbook: Strategies and tools for cutting through the red herrings and avoiding the traps about global warming (2009). If carbon dioxide is not a significant cause of global warming, then carbon sequestration, cap-and-trade, emissions trading and other actions that tax and punish hydrocarbon use are a waste of time and money. This concise booklet analyzes the best available evidence, to show why there is no need to drastically reduce our greenhouse gas emissions. Read the booklet here.

Committee For A Constructive Tomorrow, “CFACT comments on Environmental Protection Agency‘s Advance Notice of Proposed Rulemaking (ANPR) on Regulating Greenhouse Gases under the Clean Air Act: Docket ID EPA –HQ-OAR-2009-0171-001” (June 22, 2009). These comments explain how regulating CO2 as a pollutant will affect prices, jobs, access to energy, American competitiveness, personal freedoms and civil rights. Access the comments and read a related CFACT article here.


Christopher Horner, Red Hot Lies: How global warming alarmists use threats, fraud and deception to keep you misinformed (2008). The global warming lobby is using every tactic at its disposal to scare people out of their wits, and out of their money and liberties. This thoroughly researched book exposes and responds to the myths and deceptions behind claims that we face a climate change disaster. Amazon.com link to book.

Craig Idso and S. Fred Singer, Climate Change Reconsidered: The report of the Nongovernmental International Panel on Climate Change (2009). In this 880-page analysis, 35 climate scientists challenge the so-called “consensus” of scientific opinion behind concerns that global warming is man-made and would have harmful effects on humans, wildlife, plants and our planet. NIPCC link to book.

Richard S. Keen, Skywatch West: The complete weather guide (2004). Written by a meteorologist and college professor, this book provides a lively, informative, beautifully illustrated guide to climate, climate change, weather, and wild weather events and records – with a focus on the western United States. A companion book (Skywatch East) focuses on the Eastern US. Amazon.com link to book

Nigel Lawson, An Appeal to Reason: A cool look at global warming (2007). This concise (105-page) book succinctly examines the science, economics, politics and ethics of global warming. It suggests what a rational response to global warming should look like, and explains why the “conventional wisdom” about climate change has become a dangerous quasi-religion. Amazon.com link to book

S. Fred Singer and Dennis T. Avery, Unstoppable Global Warming: Every 1,500 years (2007). This highly readable text reviews Earth’s long history of warming and cooling – the result of complex natural forces that we are only beginning to understand. The authors persuasively demonstrate that it is those forces, not greenhouse gases, that will also determine future climate changes. Amazon.com

Lawrence Solomon, The Deniers: The world-renowned scientists who stood up against global warming hysteria, political persecution and fraud – and those who are too fearful to do so (2008). Al Gore says we should rely on the expertise of great scientists. As the author talked to those experts, he discovered that there were dozens, even hundreds, of serious climate scientists who strongly disagree with the claim that humans are causing catastrophic climate change. Amazon.com link

Roy W. Spencer, Climate Confusion: How global warming hysteria leads to bad science, pandering politicians and misguided policies that hurt the poor (2008). A distinguished researcher and climatologist, Dr. Spencer explains in simple terms how Earth’s climate really works, why human influences on global warming are more myth than science, and how climate disaster claims have corrupted both Washington politics and the scientific and academic communities. Amazon.com link to book