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$9.00 a Gallon

By Jon Kyl

At a time when the Senate should be looking at ways to reduce rising energy prices, it is considering legislation that would do the exact opposite.

As I discussed in a recent column, Congress could address the rising cost of energy that is straining Americans' budgets by increasing our oil supply, by lifting the restrictions on domestic energy exploration, and promoting economic growth, which would strengthen the dollar.

Instead, Senate Democrats have brought to the Senate floor a so-called "cap-and-trade" bill that would significantly raise gasoline prices. According to the Environmental Protection Agency (EPA), this legislation would immediately increase gas prices, which would rise by 53 cents per gallon in 2030. Twenty years after that, the increase would jump by $1.40. That's on top of whatever the price would otherwise be. With gas prices hovering around $4.00 a gallon today, this is not good news.

The Lieberman-Warner Climate Security Act (S. 3036) is intended to address global warming by regulating carbon emissions into the atmosphere. It would mandate an arbitrary limit on how much carbon-based energy could be produced in the United States. That's the "cap." But if any industry produced less than the capped amount, it would sell the difference to another company that didn't meet its cap. That's the "trade."

Cap-and-trade is actually a tax on American consumers. According to the nonpartisan Congressional Budget Office, businesses would pass on to consumers most of the $900 billion in costs imposed by a cap-and-trade system. This would be a regressive stealth tax that would hit low- and middle-income working families the hardest.

In a recent Washington Post article, Robert Samuelson correctly points out: "The chief political virtue of its complexity. This allows its environmental supporters to shape public perceptions in essentially deceptive ways. Cap-and-trade would act as a tax, but it's not described as a tax. It would regulate economic activity, but it's promoted as a 'free market' mechanism. Finally, it would trigger a tidal wave of influence-peddling, as lobbyists scrambled to exploit the system for different industries and localities."

The consequences of S. 3036 extend beyond energy prices, affecting economic growth and jobs. And, as for its ostensible purpose - reducing carbon emissions - it would have negligible effects.

In a recent editorial, the Wall Street Journal explains: "Trillions in assets and millions of jobs would be at the mercy of Congress and the bureaucracy, all for greenhouse gas reductions that would have a meaningless impact on global carbon emissions if China and India don't participate. And only somewhat less meaningless if they do."

In fact, a report released by the EPA indicates that even with a cap-and-trade system in place in the U.S., there would still be a net increase in carbon emissions over the next several decades.

Indeed, other cap-and-trade efforts have been unsuccessful. For example, the Kyoto Protocol - an international cap-and-trade system aimed at controlling and reducing greenhouse gases - has largely been considered a failure. The European trading system to implement Kyoto has not only failed to reduce emissions as contemplated, it has constrained growth in developed countries and has enhanced unrestricted development in countries such as China and India.

Before adopting legislation like S. 3036, Congress must quantify and compare the benefits of relatively slight - if any - reduction in greenhouse gases with the huge financial burden that would be placed on American families, who are already struggling to meet rising fuel and food prices.

Sen. Kyl serves on the Senate Finance and Judiciary committees and chairs the Senate Republican Conference. Visit his website at

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