Cap and Trade's Cost to Poor

" And Robert Murphy economist -- the institute and its -- Robert we got cap and trade on the brain still it's not going anywhere is it. Well what we're not sure that it what's going to happen but I do think -- yet as as constituents learn more more about what these. Plans really entail I think it's harder for the government which -- Robert I was reading in your notes that the cap and trade legislation is flawed and skewed toward rent seeking special interest explain that statement Lewis. Which are so the institute for energy research we just put out a new study and what it finds is that ironically what this and Waxman Markey bill would do. In the cap and trade portion of it would actually redistribute wealth from the -- 80% into the pockets of the top 20%. So -- the way that's going to happen. Is that the whole point of cap and trade of course is going to raise electricity and energy prices in general because reducing the amount of emissions that industry can give off. But the way it's going to cushion the blow for the the top 20% as they're going to give up these free. Allowances. To a certain industries. It's of the shareholders those industries are going to benefit and that's going to offset their price hikes where's -- going to be the general consumer who's going to be paying more. For electricity for gasoline and so and so when the dust settles on the study finds. It's going to be about fourteen billion dollars a year that the bottom 80% are going to be paying into the pockets of the top 20%. -- of this cap and trade."

" And they call like over it that's -- glut of aggressive attacks that it's just moving on down -- you gotta see our viewers are writing in there -- completely opposed to cap and trade. It will kill the economy. -- you know everyone has basically opposed to this. And what's interesting right now as we have senator Linda senate majority leader Harry Reid say I'm a lot of time for the as I got to focus on health care reform. Do you think that's going to make a difference -- all the end of the day."

" Well I met an economist not a political analyst well yeah I mean certainly it seems to me that. What's happening is that the American public is is angry about how far the federal government overreaching and all these different areas healthcare and so on I think people really were surprised. But all the people turn up at these town hall meetings. And certainly with the Copenhagen meeting meetings later this year they don't want to bring something to a vote had to fail so. Yeah I think that they are may be rethinking their strategy. -- on this particular the talk about the regressive tax and basically read distributing. Paul the -- hopefully it would be also talk about just the cost to businesses in general you'll forget about the the average taxpayer any individual. Wolf certain businesses be hurt more than others or is this basically across the board hates going to be more expensive to produce goods goods will then be more expensive to buy almost an inflationary. The situation across the board. Well it's gonna hurt particular sectors on harder than others so again just a reminder of your viewers. What this cap and trade does the government is going to set this artificial cap and how much carbon acts that can be emitted each year and they're going to ratchet down their cat. Year after year so it's going to -- tighten the screws on businesses can put constraints on business. But businesses that typically would emit more CO2 like coal fired power plants. They're going to be hit the hardest on what's happening behind the scenes. Some businesses are lobbying in Washington and they're getting provisions into the bill where they're going to get these allowances you giving them the right to emit carbon. For freeze the government's going to hand them out to those businesses so they're obviously going to be fine because they're getting. Handouts from the government while the rest of the public and the businesses who who aren't so favored are going to be paying for it."

" About it let's about the cost to the individuals like Chris and I. You know we've heard -- we've heard all the kinds of numbers that the Democrats saying it's going to cost you near postage stamp a day. CBO comes out with different numbers a -- we believe here is it going to be thousands of dollars a year per family as they say."

" Was sure if this is a subtle issue I'm glad you raised the question so when the CBO and the people who are are pushing this thing when they say it's going to be a postage stamp today. That figure refers to what they're calling the Matt burden so what they're talking about is. The government's going to get all the revenue from auction off the allowances. And that they're going to spend that money so it's getting back into the economy so that's the logic they're using. So they don't count that is as it is an impact they're saying yes sure you're gonna pay higher electricity. Bills but the government spends the money on funding renewable energy research that's not and that cost so when they're talking about postage stamp the day. That's very misleading if you look at just the gross burden. It's it's several tough times higher than the numbers -- throwing around robbing you look at the economic impact for coal producing states the wonder the economies are really tied into it. West Virginia Pennsylvania Virginia and some of these others. Yet we and our web site institute for energy research dot -- people can -- we've got you know each of the fifty states a state by state analysis. And yet particularly if you're an estate that is reliant on coal fired power plants for example I mean you're gonna get hit harder than other states. And the -- mr. -- did they do very depends what assumptions you put into the into the projections. But I mean that the projections are in some states no gasoline could -- up anywhere fifty cents to a dollar fifty per gallon and not those are some of the figures for when the summer really kicks then."

" Out of before we wrap let me ask you this then. Will this past and when you see it happening."

" Okay well I guess I'm an economist and a my sense the rights of how much my sense is just as is an onlooker to this whole thing. Is that they they probably what they might try to do is to take out. The cap and trade just push the rest of this through. And and but even married people need to realize this isn't just about cap and trade is all sorts of things in the Waxman Markey bill. There really is getting more money and power to Washington to control the energy sector so there's really not the whole bill. There's a lot things that can really negatively impact the economy. Robert Murphy with the institute of energy research thank you sir for joining us today thanks for your insight."