Morning Bell: The Costs and Benefits of Waxman-Markey
Conn Carroll /
Today the House Energy and Commerce Committee will begin a multi-day markup on the Waxman-Markey energy tax bill. Committee Chairman Henry Waxman (D-CA) has been busy lobbying his own caucus for the necessary 30 votes to get the bill out of committee for weeks, but the bill’s fate is still in doubt. Considering that global warming legislation is a cornerstone of President Barack Obama’s agenda (he needs the tax revenues to fund his other big spending priorities), why can’t the Obama administration convince their own party that their energy tax is a good deal for the American people?
First let’s look at the economic costs of Waxman-Markey. Waxman-Markey attempts to limit greenhouse gas emissions by making it more expensive for greenhouse gas emitters to operate. Instead of a direct tax on greenhouse emissions, Waxman-Markey issues permits (mostly for free but some at a price paid to the federal government) that allow businesses to emit greenhouse gasses. Businesses that fail to lobby the federal government for enough permits to cover their current emission levels will then have to buy them from either the federal government or other businesses that have better lobbyists in Washington, DC.