India, Russia, China, Pakistan, and Brazil have all rejected any controls on carbon emissions.  It's almost certain that other nations will follow suit. Therefore the proposed Cap and Trade plan, if signed into law, would place the USA at an incredibly serious competitive disadvantage in the world markets. Beyond this, the increases in carbon taxes at home would be indirectly passed on to every American in the form of higher prices on just about all goods and services.

The Indian Government has just bluntly told our Secretary of State that India is not about to sacrifice much-needed economic growth to meet American expectations on global climate change targets. Furthermore, India has demanded that there be no carbon tariffs added to their exports to America. A chastened Hillary Clinton was then forced to concede that the Obama Administration would not try to induce India to meet specific goals at the cost of growth.

Other less developed countries likewise have stated that it would be irresponsible for their governments to sacrifice the economic growth that is benefiting hundreds of millions of their mostly poor citizens for the sake of environmental absolutism. While these nations have grossly inefficient energy industries and could benefit from less wasteful energy usage, they are unanimous in declaring that emissions caps are the wrong way to go. Carbon caps in any nation would send prices on energy and other goods higher, not to mention the longer-term damage to business investments and job growth. China conveyed these same concerns at the recent Group of Eight meeting in Italy.

Some Congressional proponents of Cap and Trade, along with ex-Vice President Al Gore, are unmoved by these realities. They argue that the US is amongst the world's wealthiest nations, and that Americans use the most energy per capita of all. They support what is more appropriately called Cap and Tax even though there is still serious scientific debate and much skepticism about the causes, effects, and possible approaches to climate change (they no longer refer to global warming because there is clear evidence that our planet turned the corner toward a global cooling cycle several years ago).

These proponents are in denial or oblivious to the Tax Foundation study that concluded Cap and Trade would place an initial annual burden of $144.8B on American households, or more than $1,200 per year on the average family.  They also ignore recent findings by the National Black Chamber of Commerce that Cap and Trade would reduce America’s GDP by $350B and kill 2.5M American jobs, even after accounting for any new “green” jobs that might be found in the process. These and other studies have concluded that in the future the  proposed bill would add $9T to energy costs by 2050, and that these costs would be felt throughout the US economy.

In the nearer term, these additional costs would triple our national debt by 2016, reduce America’s GDP by 20%, and add to our already massive deficits. If this happens along with the nationalization of health care and other proposed increases in government spending, we’re going to pass on a pretty miserable economy and seriously diminished standard of living to future generations.

Yet the proponents of Cap and Trade simply conclude that the US should lead by example in dealing with carbon emissions, as if somehow miraculously the rest of the world would then become embarrassed and fall in line.

All of this thinking falls somewhere between naiveté and lunacy.

Clearly whatever is decided should not be done at the sacrifice of US competitiveness and US jobs. Even if the Cap and Traders were prepared to dramatically raise taxes on the imports from all non-compliant countries (which they are not), we need to abandon all talk about immediate emission caps and focus instead on an intelligent move away from fossil fuels and toward alternative sources in the years ahead.  Our current economic situation and realities worldwide tell us the timing for Cap and Trade is all wrong. 

It would be a good move for Senate Republicans to point out the dangers of Cap and Trade to a confused and misinformed public. They should vote “NO” as way of looking out for American businesses and jobs. They should add that their worst nightmare is that the Obama Administration will somehow proceed anyway with this formula for disaster, without penalizing those nations who refuse to play ball.

We do very much need to move toward energy independence and toward renewable energy as a path to this goal. But we must do so wisely, in a way that creates rather than destroys US jobs, and reduces rather than increases taxes and energy costs. If the USG would leave this challenge to the private sector and to America’s unmatched technological and entrepreneurial strengths, and stops picking energy winners and losers, the USA can in fact lead the way globally to a cleaner, safer, and more affordable energy future.  But Cap and Trade would not be a part of the recipe.