19 March 2009 22:13 [Source: ICIS news]
WASHINGTON (ICIS news)--President Barack Obama’s proposed climate change plan would impose a $2,000bn (€1,480bn) tax on US consumers and businesses, the top Republican on the House global warming panel said on Thursday.
US oil and gas interests said the new and much higher estimate of costs for Obama’s cap-and-trade emissions mandate was shocking and urged Congress to make full disclosure of the financial burdens of climate control legislation.
Representative Jim Sensenbrenner of ?xml:namespace>
The Obama plan - contained in his fiscal year 2010 budget proposal - would put an immediate limit or cap on greenhouse gas (GHG) production and auction emissions permits to the broad industrial sector.
Manufacturers whose facilities emit fewer emissions than permitted could sell their excess credits to companies whose operations exceed allowed limits - the trade part of cap-and-trade.
The president’s plan aims to cut US GHG emissions to 14% below 2005 levels by 2020 and then to 83% below 2005 levels by 2050.
In proposing the cap-and-trade mandate, the White House said the sale of emissions permits would likely raise $646bn during its first eight years of implementation.
Sensenbrenner said, however, that even at $646bn, the plan represents “one of the largest new taxes in our country’s history, but President Obama’s estimates are likely low”.
Sensenbrenner said a top White House economic advisor, Jason Furman, recently told a Senate staff meeting “that the actual ‘revenues’ could be two to three times higher”.
The White House did not respond to a request for confirmation or clarification of remarks that Sensenbrenner attributed to Furman.
“The global warming tax could reach nearly $2,000bn,” Sensenbrenner said.
He termed the proposed climate control measure “a hidden tax that will be added to our electric bills and to the cost of every product we buy”.
The American Petroleum Institute (API), whose members include most US oil and natural gas exploration and production firms, said the new White House estimate for the cost of its cap-and-trade plan “is shocking”.
“The nearly $2,000bn in fees that would be imposed on the use of natural gas, gasoline, coal and other fuels would increase energy costs for all of America’s businesses and families, keeping our economy in low gear, eliminating jobs, depressing living standards and putting our domestic energy industries at a competitive disadvantage,” the API said.
The institute also said the cap-and-trade plan would increase
“The American people and lawmakers deserve to know the full costs of all serious options for addressing climate change before any new policy is enacted,” the API said.
Multiple congressional committees are considering various elements of the president’s budget proposal, which includes the cap-and-trade plan. The budget must be approved prior to the start of the federal government’s 2010 fiscal year on 1 October this year.
($1 = €0.74)
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