WASHINGTON-A proposed tax intended to fight climate change is facing some heat on Capitol Hill. The cap-and-trade system, which President Obama has proposed as one way to fund his budget for next year, would require businesses who exceed certain carbon emissions limits to pay for offsets. And now that the proposal is being aired, debate is rising before an energy bill takes shape in committees over the next few weeks.
Energy-based businesses have raised a hue and cry because their costs of doing business will go up, which will pass on utilities costs to consumers. This aspect of cap-and-trade makes it a politically tricky issue to pass through Congress, and some Democratic lawmakers doubt it will pass this year. The president has sought to mitigate concerns by promising to provide working families with $400 and $800 tax breaks.
Southern and Midwestern lawmakers have questioned the system on grounds that it could unequally impact industries in their regions.
"The wrong climate change legislation could hurt industries that are bearing the brunt of this recession," said Rep. Artur Davis, D-Ala. "There are some regional splits."
During a House committee hearing Thursday on the cap-and-trade system, some Republicans disputed the premise that climate change is indeed a crisis that needs to be addressed. Republicans on the Ways and Means Committee called Lord Christopher Monckton, an adviser to former British Prime Minister Margaret Thatcher, to be a witness. He vehemently denies that climate change is happening, and argues that climate change legislation will sink the U.S. economy further. As Monckton testified, Democrats looked at him with bemused expressions on their faces, and Rep. Shelley Berkley, D-Nev., laughed outright at one point.
"Your position is essentially a very small, tiny position among scientists, and you're not a scientist," said Rep. Sander Levin, D-Mich.
Monckton wasn't deterred, saying a cap-and-trade system would "render difficult if not impossible the pursuit of happiness," and pointed to the European model, which he said has failed twice. He said regulations on industries in the United States would push business to other countries where carbon emissions aren't regulated, increasing a carbon footprint worldwide.
"Any restriction on carbon emissions is unnecessary," he said. "Have the courage to do nothing."
But for many lawmakers and other witnesses at the hearing, the issue is not whether or not carbon emissions are affecting the environment and the climate, but how to deter those emissions. And the cap-and-trade system introduces so many variables to markets, since it is in effect a market itself, that many lawmakers aren't ready to throw their weight behind the idea. Depending on the exact policy, cap-and-trade could adversely affect low-income families, especially through higher energy costs, and result in job losses at companies facing rising costs of doing business. But proponents argue that the point of the system is to provide a disincentive for businesses to emit carbon, and that tax cuts and other provisions can make up for any affect the policy may have on families.