Concrete and Revision

Last post I tried to rewrite portions of my paper but this time I decided to read the body of my paper and think like a person that does not know anything about cap and trade. Although I had to make my paper sound less academic, I was able to get rid of a lot of unnecessary jargon and give some good examples. Concrete is way easier than simple and unexpected.

 

            The most immediate change felt by the American family will be the rapid increase in energy costs. Waxman-Markey only directly regulates the air pollution of energy companies such as the electric, oil, and natural gas industries. While Waxman-Markey does not directly charge individual Americans they will have to bear the increased costs as these industries are charged for polluting. This has been true in Europe where the European Union has introduced its own cap and trade system, the Emissions Trading System (ETS). Despite the European government’s decision to distribute pollution permits without costs, European energy companies still charged customers for these permits. The Washington Post reported that electricity prices in Germany have risen by 25% since the beginning of the ETS in 2005.

The exact amount that energy costs would rise is unknown but almost all sources agree that Waxman-Markey would cause a very substantial increase. According to the testimony of Ben Lieberman of the Heritage Foundation before the Senate Republican Conference, this legislation could nearly double an American family’s energy bill. This does not include other debilitating rate hikes in gasoline and natural gas. These rising rates would be especially problematic for low-income families where energy costs already constitute a very large percentage of their income. Electricity bills alone could cost more than 10% of their post-tax dollars. Countering these estimates, the Congressional Budget Office claims that energy prices would only rise by $175, or about a postage stamp per day for an American family. The Wall Street Journal is quick to point out that this calculation is based on “so many caveats as to render it useless.” In fact, almost every other source puts the anticipated energy cost increases at around $1,500 for a family each year. Even the Obama Administration’s calculations, initially withheld because of its potentially negative effects on the passage of the legislation, put the cost at $1,761 per year.

Along with increased costs for American families, energy costs for companies that use large amounts of electricity would also rise substantially. Small and large businesses alike would be at the mercy of an unsteady energy market. The National Center for Policy Analysis (NCPA) cites the example of Kollo Holding to illustrate the effects that cap and trade can have on businesses. Kollo Holdings is a Dutch silicon carbonate maker that claims to have one of the most environmentally friendly factories on Europe. They use a sophisticated pollution-capture system to not only control their air pollution but also to generate a portion of their own electricity. After the implementation of the ETS, Kollo Holdings has not been able to continue its operations full-time because of high electricity costs. It has also had to layoff almost one-third of its employees and has lost customers to foreign companies that are not burdened by these electricity costs. The NCPA also describes how French cement companies are losing business to Morocco because Morocco does not have similar added energy costs. American companies are at risk for these same unintended consequences if the Waxman-Markey legislation passes. Further weakening American companies in these difficult economic times could easily lead to their collapse.