Archive for the ‘Cap and Trade’ Category

Please read the following guest post from Larry Koch, special contributor on for the Center of Education Excellence at the Caesar Rodney Institute.

One of the reasons I retired from educational administration from a rural Maine school district was a cynical method to increase taxes that a number of my colleagues engaged in. This is how it worked:

1)        The town, usually fed up by double digit increases, would demand that the district lowered expenses by let’s say 2%. This should not have been a difficult task to do in a multi-million dollar budget.

2)        After a number of hearings (to show that they tried) the Superintendent would come out with a proposal that would cut sports, after school programming, AP classes and special education.

3)        The constituency groups for all of these programs would show up, howling for their children, at every board and town meeting, until-far too often- the proposed cut was dropped, and often a tax increase was agreed to.

The reason this scenario was so cynical was that it had been choreographed in advance, and concerned parents were manipulated into doing something that was destructive to the community, and ended up with farms being closed and people defaulting on their taxes. Education was not advanced, and the bureaucracy was engorged. School officials could have surgically applied cuts so essential and popular programs were saved, but they chose not to do so! Yes, they would have been criticized by somebody, but that is why they got those inflated salaries; to show some leadership!

Instead they turned the most active consumers of public education, the parents, in effect against the most economically vulnerable people in the community, seniors and struggling family farmers, in a conflict that leaves the community weaker and in no way improves learning. 

That is basically the scenario for the sequester debate. Our 16 trillion dollar government with some imagination should be able to absorb a cut of 2%. Instead, the administration plans on across the board cuts, highlighting the effects it will have on schools, the disabled, transportation, etc.,. The government, if it showed some leadership, could identify areas where little damage would result from reducing expenses, but refuses to do so, unless taxes are raised. This is a cynical- after the fact – grab for more money; the sequester legislation never mentioned a tax increase, but Obama would never allow an opportunity for this to pass without notice. Sequester would allow the president and departments to fine tune their cuts, as long as it came up to the required amount, but they have chosen not to do that without a tax increase.

Just like that school district, Washington’s continuing, insatiable demands for endless growth is demanding to be fed, and a cynical method has been employed to achieve that end. This was bad enough when it was done locally by petty school administrators- but now Washington has taken a leaf from their book! How pathetic!

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Dover-The Caesar Rodney Institute, a non-partisan, non-profit think tank dedicated to providing scientific and economic analyses to public policy issues, is pleased to announce the affiliation of two well-known academics to our ranks: Willie Soon, PhD and David R. Legates, PhD.

Dr. Soon will join CRI to provide research related to public policy issues impacted by the climate.

Soon is an astrophysicist and a geoscientist based in Salem, Massachusetts, doing research for the Harvard–Smithsonian Center for Astrophysics in Cambridge, MA.  His area of specialty is in solar and stellar physics for New Astronomy. He is the author of the book “The Maunder Minimum and the Variable Sun-Earth Connection” and is a co-author of the textbook “Introduction to Astronomy”.  He has provided expert testimony in front of the United States Senate and was recognized for “detailed scholarship on biogeological and climatic change over the past 1000 years” by the Smithsonian Institution.

He received his PhD  from the University of Southern California. Dr. Soon was awarded the Rockwell Dennis Hunt award from Southern California University in 1991. He was given the Petr Beckmann Award from the Doctors for Disaster Preparedness for “courage and achievement in defense of scientific truth and freedom.”

David R. Legates, PhD will become a member of CRI’s  Advisory Council and will collaborate with Dr. Soon in developing and presenting CRI’s positions on public policy issues influenced by climate.

Dr. Legates is a Professor of Climatology at the University of Delaware and served as the Delaware State Climatologist from 2005 to 2011. He also is an adjunct faculty in the Statistics Program. He received his Doctorate in Climatology in 1988 from the University of Delaware.  He has been invited twice to appear before the United States Senate Committee on Environment and Public Works and has given more than 120 invited professional presentations. He is recognized as a Certified Consulting Meteorologist by the American Meteorological Society.

For more information contact:

Samuel Friedman

Communications Coordinator


(302) 734-2700

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from the Caesar Rodney Institute:


Lawsuit against the Bloom Energy Deal to be Heard Next Week

Wilmington- The lawsuit against the Bloom Energy deal approved by Governor Jack Markell and five members of the Public Service Commission will be heard at the US District Court on Wednesday, November 14, at 2 PM. The hearing will be in Courtroom 6C on 844 North King Street in front of Judge Christopher J. Burke. The hearing is open to the public, and all are encouraged to attend.

The plaintiffs are John Nichols and Fuel Cell Energy of Connecticut. Mr. Nichols is a citizen who believes his rights as a taxpayer and local resident are being violated as a result of a government-backed deal to provide over $600 million in taxpayer stimulus. Fuel Cell Energy believes they were unable to sell their products in Delaware because Bloom Energy had already been chosen to take the deal offered by the government.

The plaintiffs are being represented by Cause of Action, a non-profit which works to protect the public and taxpayer interests in favor of government accountability and transparency. The Caesar Rodney Institute provided expert testimony in Mr. Nichols’ hearing at the Coastal Zone Industrial Control Board on June 13 of this year. CRI’s testimony and research data on the Bloom Energy deal will be considered as part of the lawsuit.

Please contact:

Barrett Kidner

Chairman and CEO

(302) 734-4935


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From The Wall Street Journal‘s Opinion Journal by Stephen Moore:

Most of the eight Republicans in the U.S. House who voted for the cap-and-trade legislation that passed by a vote of vote 218-211 now say they regret their “yes” vote.

The pro-cap and trade Republicans confessed at a Republican caucus meeting last week that they were besieged by angry constituents back home during the 4th of July recess. Despite what they imagined in Washington, fighting global warming doesn’t appear to be high on the priority list of actual voters. “They thought they were being green,” said one attendee of the caucus meeting, “but they admitted they misjudged the politics.” Rep. Tom Price of Georgia and head of the Republican Study Committee adds: “They overestimated the public support for cap and trade at a time when the economy is in such terrible shape.” Polls show that 56% of voters say they are not willing to pay higher utility bills to reduce greenhouse gases.

The Republican “yes” votes came from mostly the Northeast and West Coast — members like Chris Smith of New Jersey and Mary Bono of California. What was most inexplicable was the “yes” votes from two House Republicans who are running for the Senate in 2010: Mark Kirk of Illinois and Mike Castle of Delaware. Mr. Kirk has long been thought to be the Republicans’ best chance to pick up the Illinois Senate seat that was once Barack Obama’s — if he runs. Mr. Kirk has been wavering back and forth like Hamlet in making a decision. But conservatives in the state are now certain to mount a primary challenge — just what the moderate from the North Shore of Chicago was hoping to avoid. If he does run, Mr. Kirk will have to spend the next year and a half living down voting for a bill that would decimate hard-hat manufacturing industries and coal-burning utilities that are a backbone of the Illinois economy.

The defection of these eight Republicans on the climate change bill caused rejoicing inside the Democratic caucus. This not only allowed House Speaker Nancy Pelosi to claim “bipartisan support” for the bill, it more importantly gave a free pass to Democrats in marginal districts who were permitted to vote “no” for an unpopular bill coveted by the hard core environmentalists.

Republican House Whip Eric Cantor of Virginia tells me that several of the chastened GOP defectors on cap-and-trade have assured him in recent days that they are a “no” vote on Obama’s health care plan. “They will be with us on the big health care vote,” he predicts confidently. “I now expect no Republican votes for the health care plan.”

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Cap and Trade

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In a release entitled, “For Farmers, Cap and Trade is a Permanent Drought Season,” Economists at The Heritage Foundation’s Center for Data Analysis have dug into the details on the effects of the Waxman-Markey climate change legislation that includes a cap and trade plan to reduce carbon dioxide by 17 percent below 2005 levels in 2020 and by 83 percent below 2005 levels in 2050.

Here is what they found:

  • Farm income (or the amount left over after paying all expenses) is expected to drop $8 billion in 2012, $25 billion in 2024, and over $50 billion in 2035. These are decreases of 28%, 60% and 94%, respectively.
  • The average net income lost over the 2010-2035 timeline is $23 billion – a 57% decrease from the baseline.
  • Construction costs of farm buildings will go up by 5.5 percent in 2025 and 10 percent by 2034 (from the baseline).
  • By 2035, gasoline and diesel costs are expected to be 58 percent higher and electric rates 90 percent higher.
  • The cost of producing everything from wheat to beef will increase. Indeed, the price deflator for private farm inventories goes up over 20 points by 2035. This increase gets quickly translated into much higher food prices for consumers at the grocery stores.


According to the release,

Most of our readers know cap and trade is an energy tax in disguise. The goal of cap and trade is to drive up energy costs so much that Americans use less. But there’s a fundamental problem with this. Just about everything we do and everything we consume uses energy, so even after consumers turn up their thermostats in the summer and down in the winter, consumers are still using a lot of energy. But under a cap and trade, they’ll be paying an exorbitantly high price for it.

Farming is no exception; in fact, farming is very energy-intensive, with fuel, chemical, electricity and fertilizer costs. They have to purchase a lot of equipment and have to construct a lot of buildings. The Heritage Foundation’s CDA estimates that the price of constructing farm buildings will go up by 4.5 percent in 2024 and by over 10 percent in 2034 (from the baseline) solely because of the upward pressure cap and trade puts on energy prices.


Worst of all is what happens to farmers’ net income. Farmers live off their gross income; what they earn in addition to that is their net income or marginal income. Waxman-Markey significantly shrinks farmers’ net income pie. Farm income is expected to drop $8 billion in 2012, $25 billion in 2024, and over $50 billion in 2035. These are decreases of 28%, 60% and 94% from the baseline, respectively.


Waxman-Markey increases the costs of farm inventories, which in turn raises the cost of food sold to the consumer. At first glance, this may appear to be a good thing for farmers. Higher prices equals higher profit. But this would only be true if all other things were equal. That’s certainly not the case here. Higher energy prices hurt the overall economy, which means less demand for all goods, less production, higher unemployment, and reduced income. This overall economic slowdown reduces demand for agricultural goods, too.  And, as we’ve seen above from the charts, a lot changes for farmers; particularly, their overall cost of operations rise and their net incomes fall.

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