June 1, 2009
By Ben Lieberman
They're back. Rising gasoline prices, that is. Millions of
Americans hitting the roads over Memorial Day weekend faced prices
for regular gas averaging $2.35 per gallon, a full 30 cents higher
than at the beginning of the month and nearly 60 cents more than at
the start of the year.
But don't expect any help from Congress. In fact, Washington is
working on a bill that would raise costs further.
The proposed American Clean Energy and Security Act of 2009 -
introduced by Democratic Reps. Henry A. Waxman of California and
Edward J. Markey of Massachusetts - essentially would limit how
much gasoline and other fossil fuels Americans can use. The aim is
to cut our emissions of carbon dioxide from energy use, which
proponents of the bill claim is warming the planet to dangerous
levels. Under this proposal, prices would have to rise high enough
so the public would be forced to drive less and meet the
ever-tightening energy rationing targets.
How high? A Heritage Foundation analysis estimates gasoline
costs will rise $118 annually for a typical four-person household
once the bill's provisions take effect in 2012. That's about 10
cents more per gallon - on top of anything else that might boost
pump prices by then. And the impact goes up as the bill demands
tougher energy use restrictions each year, tacking on an additional
$1.23 to the inflation-adjusted price per gallon by 2035.
electricity is also hit hard. In fact, the main target of the
bill is coal, which affordably provides 50 percent of America's
electricity - for now.
The bill likely would reduce coal use and replace it with more
expensive options for producing electricity. The costs would filter
down to consumers and boost electric bills by $235 in 2012, rising
to $468 by 2035. That's a 90 percent increase over current
Motorists and homeowners aren't the only ones to be hurt by the
higher energy costs. The bill also would cost jobs, especially in
the manufacturing sector. The Heritage Foundation estimates more
than 1 million lost jobs - some destroyed entirely and others
shifted to nations like China that have made clear that they will
never impose any energy-price-boosting global-warming measures on
themselves. Call it environmental outsourcing.
Overall, the Waxman-Markey proposal would significantly raise
pump prices and electricity bills. This is a regressive tax that
would harm the working poor the most. At the same time, it would
leave a million or more people without a paycheck to deal with the
Is all this economic pain justified by the environmental gain?
Even assuming the worst of global warming - and growing scientific
evidence is turning sharply away from this assumption - the Waxman-
Markey bill would make little or no difference.
China alone out-emits the United States, and its emissions are
rising six times faster than ours. For this reason, unilateral
measures are practically useless. According to climate scientist
Chip Knappenberger with New Hope Environmental Services, "the bill
will have virtually no impact on the future course of the Earth's
climate." Even most proponents of the bill don't dispute this
Though the pain at the pump is still well below 2008 levels -
this time last year, prices were reaching $4 per gallon - there is
no room for complacency or for piling on costly green measures. The
only reason for the price decline since last summer was a drop in
demand because of the recession. But recessions don't last forever.
Indeed, the fact that oil and gasoline prices are creeping back up
suggests a turnaround is near.
In any event, a return to record gas prices is likely in the
not-too-distant future. If Washington decides to make things worse
by enacting this ill-advised global-warming measure, we may see
future Memorial Day weekends with gasoline prices of $5 or even $6
a gallon - at least for those who can still afford to drive.
Ben Lieberman is
a senior policy analyst in the Thomas A. Roe Institute for Economic
Policy Studies at the Heritage Foundation.
First Appeared in The Washington Times
They're back. Rising gasoline prices, that is. Millions of Americans hitting the roads over Memorial Day weekend faced prices for regular gas averaging $2.35 per gallon, a full 30 cents higher than at the beginning of the month and nearly 60 cents more than at the start of the year.
Senior Policy Analyst, Energy and Environment
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