The U.S. Senate is using the Waxman-Markey cap-and-trade legislation as a blueprint for crafting a bill proponents hope will be ready for vote as early as September. The Waxman-Markey legislation adopted by the House on June 26 is a blueprint for disaster. It will impose higher energy costs on American families, cut American jobs (a net loss even after government-funded “green” jobs) and slow GDP growth in the middle of a recession.

“The bill’s economic harms are distributed unevenly among states sparing California at the expense of the Heartland and the South,” said Representative Mast. “For example, to meet electricity needs under the allocation scheme adopted by the U.S. House of Representatives, Kansas would be forced to choose between buying extra credits from the coastal West and Northeast or paying foreign countries for offsets.”

According to analysis of the bill from the U.S. Chamber of Commerce using data from the Energy Information Administration (EIA) and the Congressional Budget Office (CBO), Kansas would have to pay an extra $206 million in 2012 alone to comply with cap-and-trade (assuming CBO estimate of $15 per ton). This new tax on Kansas is for electricity only and does not reflect other costs imposed by the bill. States like California, Washington, New York and New Jersey would actually gain under the allocation scheme adopted by the House.

Kansans could choose to buy offsets overseas instead. However, this would still leave Kansas with a hefty bill to pay. Based on the EPA’s more optimistic estimate of $10 per ton, in 2012 Kansans can expect to write a check to foreign nations for $182 million. Again, that’s for only one year of compliance and based on a low estimate for carbon prices.

“What’s most disturbing is that proponents sold the bill as an energy independence bill promising this legislation would lessen our dependence on foreign nations, and yet the bill’s provisions would have us sending more American dollars overseas for the privilege of meeting our own energy needs,” said Representative Mast.

Another way this bill empowers some favored states at the expense of others is included in Sections 334 and 335 of the bill. This provision would allow a state like California to force emission sources within the state to retire federal credits under more stringent state emissions targets. In effect, this would allow one state to decrease unilaterally the national pool of tradable credits, causing the price of the remaining credits to go up for the rest of the states, including Kansas.

“Kansans cannot support the Waxman-Markey cap-and-trade bill,” said Representative Mast. “Please contact your Congressional delegation and voice your opposition.”

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