Kerry, Boxer: U.S. ‘Needs’ Cap-and-Trade on Carbon Emissions Even if Energy Costs Rise

By Matt Cover | March 19, 2009 | 6:50 PM EDT

Sen. John Kerry (D-Mass.)

Washington ( – Democratic Sens. John Kerry and Barbara Boxer told that the nation must adopt the Obama administration’s cap-and-trade proposal to reduce carbon emissions, even if it results in massive increases in gasoline and electricity prices.
When asked the Massachusetts Democrat whether the country could afford cap-and-trade during the recession, Kerry responded, “Yes, yes, yes, and yes.” He added: “The cap and trade system is – in fact – going to help us kick our economy back into gear.
“It’s a win-win in so many different ways, we can’t afford not to do it,” Kerry said.
When confronted the former Democratic presidential nominee with admissions from Treasury Secretary Timothy Geithner and White House budget chief Peter Orszag that the plan would most certainly raise energy prices for Americans – Kerry maintained his support for the controversial initiative.
“There could be some (price) increases,” Kerry admitted, adding that the “costs of doing nothing could be greater,” including a decline in the food supply. “But there’ll be higher rises if we don’t do it and start to curb these emissions because you’re going to pay more for the adaptations, the loss of food, all the other problems that come along with it.”
Boxer also acknowledged that energy prices will rise.
“In the short run, in the transition, there’s always an up-tick (in prices),” Boxer told
The California Democrat, meanwhile, compared the proposal to the nation’s buildup to fight World War II.

Sen. Barbara Boxer (D-Calif.) (Photo courtesy of Boxer's Web site)

“We pulled ourselves out of the Great Depression when we mobilized to fight World War II. I believe we need a mobilization now, we need a mobilization to fight global warming!” she said.
Boxer made her comments at a Thursday press conference where she delivered what she called a “reality check” on anti-climate change legislation.
The senators echoed the sentiments of top administration officials that cap-and-trade is absolutely essential to control climate change – regardless of higher energy costs.
In fact, a 2008 Environmental Protection Agency (EPA) analysis of the cap-and-trade bill introduced last year by Sens. John Warner (R-Va.) and Joe Lieberman (I-Conn.) showed that by 2030 electricity prices will be 44 percent higher than normal and an extra $0.53 will be added to the price of gas as a result of cap-and-trade – with $1.40 added by 2050.
The same report also showed that cap-and-trade will cause the nation’s gross domestic product to decline by as much as 3.8 percent by 2030 (and by 6.9 percent by 2050) than it would be without cap-and-trade.
This means that cap-and-trades would cause the economy to grow at a more sluggish pace than normal, a finding made even more important because the study was done prior to the current recession.
Those figures assumed a 150-percent increase in nuclear power and a marketable system for carbon sequestration--which does not currently exist. Without these two developments, electricity prices were estimated to rise approximately 80 percent above normal by 2030.
In fact, Obama administration officials have been quite clear that higher energy prices are precisely the point of a cap and trade system. Treasury Secretary Timothy Geithner told the Senate Finance Committee on March 4 that higher energy prices were necessary to control how people use energy.
“Cap and trade will increase the cost of energy,” Geithner told the committee. “That’s necessary if you’re going to change how people use energy.”
Geithner added that combating climate change and reducing American dependence on oil required that government change how people use energy.
“You can’t achieve these objectives without changing the incentives for how people use energy,” Geithner said.
Orszag, director of the Office of Management and Budget, echoed Geithner’s comments in testimony before the Senate budget Committee March 10, telling Sen. Judd Gregg (R-N.H.) that prices would increase.
“Well, you're going to raise $646 billion over 10 years (from cap and trade),” Gregg pointed out. “It's not going to come from Tinkerbell.”
“It's going to come from consumers, and that's – you know, I mean, the consumer is going to see it as a price on their energy bill. You can call it a tax. You can call it an increased price for energy. But that's where the bill's going?” Gregg asked.
“There will be increased prices, yes,” Orszag answered.
In a March 4 appearance before the House Ways and Means Committee, Orszag also said that the cap-and-trade system was intended to function just like the carbon tax Gregg warned of.
“A carbon tax has certain efficiency aspects. Cap and trade could be made to be, can be made to have the same efficiency aspects,” he said.
Last year, then-candidate Barack OBama also admitted prices will rise. In a January 2008 interview with the San Francisco Chronicle, Obama said that electricity prices would “necessarily skyrocket” under cap and trade--something he said is necessary to “force” people “to do the right thing.”
“The problem is can you get the American people to say this is really important and force their representatives to do the right thing,” Obama said.
“Under my plan of a cap and trade system, electricity rates would necessarily skyrocket even regardless of what I say about whether coal is good or bad, because I’m capping greenhouse gasses, coal power plants, natural gas you name it whatever the plants were, whatever the industry was, they would have to retro-fit their operations,” he said.
“That will cost money (and) they will pass that money on to the consumers,” Obama added.
Boxer, meanwhile, described it as a “moral obligation” to “do all we can” to prevent the Earth from warming.
“We must as a nation answer the call to action to address global warming,” she said. “We have a moral obligation to do all we can to solve this problem.”