August 15, 2020

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EU Strategizing to Increase US Energy Costs?

Published Monday, September 28, 2009 7:00 am

IFL Exposes E.U. Strategy to Increase U.S. Energy Costs
Plan Would See Transfer of $100 Billion from US to EU

WASHINGTON—Today, Institute for Liberty’s President Andrew Langer warned that the creation of a U.S. carbon market linked with the existing E.U. system would decrease European carbon prices while costing Americans an additional $100 billion.
After analyzing a recent report by European consulting group Point Carbon -- whose aim is to increase support for implementing a U.S. cap-and-trade scheme – Langer determined that the creation of a national carbon market would serve to subsidize the failing European Trading Scheme (ETS) with U.S. tax dollars.

According to the report, linking U.S. and E.U. cap and trade systems could slash E.U. carbon prices by 50% and increase U.S. carbon prices by 10-30%. Langer’s $100 price tag is based upon simple mathematics. Linking U.S. and E.U. systems would increase demand for emissions allowances. This would raise the price of CO2 to $20 or more per ton. Waxman-Markey allocates slightly more than 5.4 billion tons of allowances in 2016. At 5.4 billion tons times $20, Americans would be looking at increased costs of over $100 billion.

If cap and trade were to pass, this would create a massive wealth transfer from America to Europe. “The consequences for linkage are not in the U.S.’s favor,” said Langer. “If Congress implements a national cap-and-trade program and then links it with the E.U. system, it would mean high carbon prices for the U.S., and lower prices for Europe.”

In addition to raising prices, Waxman-Markey provides carbon offset programs that would invest in clean energy projects abroad, creating foreign jobs while slashing domestic industry jobs.  

Earlier this week, the Financial Times reported that “A growing rift between the U.S. and Europe is overshadowing Tuesday’s United Nations climate change summit in New York.” With European leaders criticizing the U.S .for delays in passing legislation, it’s not hard to understand why many of our allies would like to see the US pass cap-and-trade legislation as it is ultimately to their financial benefit.

 “In this economic recession our focus should be on creating jobs and lowering prices, and cap-and-trade would only serve to do the opposite,” said Langer. “It is the job of Congress to look out for the well-being of American citizens and businesses, not foreign companies.”

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