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InsiderOnline Blog: June 2008

Global Warming Plan Hurts the Poor

Sen. James Inhofe, writing in the Wall Street Journal, points out that the burdens of the global warming “cap and trade” plan would fall most heavily on the poor, and that it would interfere with efforts to expand free trade:

A recent CBO report found: “Most of the cost of meeting a cap on CO2 emissions would be borne by consumers, who would face persistently higher prices for products such as electricity and gasoline. Those price increases would be regressive in that poorer households would bear a larger burden relative to their income than wealthier households.”

The poor already face energy costs as a much higher percentage of their income than wealthier Americans. While most Americans spend about 4% of their monthly budget on heating their homes or other energy needs, the poorest fifth of Americans spend 19%. A 2006 survey of Colorado homeless families with children found that high energy bills were cited as one of the two main reasons they became homeless.

Lieberman-Warner will also hinder U.S. competitiveness, transferring American jobs overseas to places where environmental regulations are much more lenient. Instead of working to eliminate trade barriers on clean energy and lower emitting technologies, the bill imposes a “green,” tariff-style tax on imported goods. This could provoke international retaliatory actions by our trade partners, threatening our own export markets and further driving up the costs of consumer goods.

This “cap and trade” plan, then, goes in the opposite direction from the findings of the Copenhagen Consensus, which announced last week that expanding free trade via the Doha Development Agenda is surpassed only by addressing malnutrition as the most important priority for improving the state of the planet. Expanding free trade would yield an extra $2.5 trillion annually to the economies of developing nations.

Posted on 06/05/08 11:12 AM by Alex Adrianson

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