A carbon tax by any other name . . .
They’re not calling it a carbon tax or cap and trade. But make no mistake, the national “clean energy” mandate introduced earlier this month by Senator Jeff Bingaman (D-N.M.) and eight cosponsors entails both a tax and a trading measure.
Bingaman’s legislation has the apparent support of the White House. A day after the bill was introduced, Nat Keohane, a special assistant to the president for energy and the environment, called it “an important step towards the president’s goal of doubling clean energy by 2035.” He added, “we look forward to working with Congress as the bill moves forward.”
The bill is bad legislation in search of a problem. The United States doesn’t need a mandate in order to cut carbon dioxide emissions. Those emissions are already falling. Innovation and market forces, not regulation, are making that happen. Furthermore, pricing data and analysis from the Energy Information Administration show that a national mandate will saddle consumers with higher electricity bills. More on those issues in a moment.
First, a look at the heart of Bingaman’s bill, which requires the establishment of a “clean energy trading program” that will create a “national market for the sale or trade of clean energy credits.” Those credits will be based on the carbon intensity of each form of electricity generation. The legislation puts a limit on the amount of carbon dioxide that can be emitted per megawatt-hour of electricity generated: 0.82 metric tons. That limit spells doom for coal, which emits about 1 metric ton of carbon dioxide per megawatt-hour produced.