Media Myth: Networks Ignore Trillion-Dollar Price Tag of Climate Cap Bill
The media love to fret over global warming, but now that a trillion-dollar scheme to address global warming could be just around the corner the networks have been curiously quiet.
On May 21, the House Energy and Commerce Committee passed a bill to cap carbon emissions and create an artificial trading market. The network news media didn’t mention it, but critics say the legislation would be a “huge threat to American prosperity and freedom.”
The Heritage Foundation estimates that this bill, known as Waxman-Markey, would cost $9.6 trillion in GDP loss and over a million jobs by 2035, but the network news media ignored the bill and almost never explained the cap-and-trade policy it seeks to enact.
ABC, CBS and NBC didn’t mention passage of the Waxman-Markey bill or discuss cap-and-trade over Memorial Day weekend, despite a global summit about climate change that took place in Copenhagen May 24-26. That summit was in preparation for a December U.N. convention to create a global plan of action regarding climate change.
The three networks have mentioned cap-and-trade in only 13 stories between Jan. 20 and May 25 even though it is a top priority for Obama, who said in November “few challenges” are “more urgent than combating climate change.” Nearly all (9 out of 13) instances were on the Sunday talk shows which have much smaller audiences than evening newscasts.
None of the stories were comprehensive – explaining the policy and thoroughly examining its costs to businesses, consumers and the national economy or citing past failures of cap-and-trade policies. Three of the four non-talk show segments merely mentioned cap-and-trade.
“World News with Charles Gibson” brought up cap-and-trade on January 26 in a segment about Obama’s environmental priorities.
George Stephanopoulos only hinted at the economic price of cap-and-trade that night saying “there’s a tension there between the environmental standards and uh, making sure we continue to get this economy back on track. That’s why other initiatives like, for examples, controlling industrial emissions through a cap-and-trade program, are likely to be put on a slower track.”
But he didn’t cite any of the major issues – estimates of job loss, increased energy prices or loss of GDP for the policy.
None of those network stories gave a detailed explanation of what the policy cap-and-trade is so it is little wonder that only 24 percent of the American people could correctly identify that cap-and-trade was a proposal dealing with environmental issues, according to a recent Rasmussen poll.
Myron Ebell, Director of energy and global warming policy for the Competitive Enterprise Institute, told the Business & Media Institute the reason so many people are in the dark about cap-and-trade is because its proponents “have done everything they can to hide the fact that cap-and-trade is really a tax.”
Ebell criticized the media for covering the story like they cover Congress – only reporting on bills on the House or Senate floor. There “needs to be more coverage earlier,” Ebell said.
While the media have hyped the threat of global warming, promoted solutions and censored the skeptics in recent years, a Pew Research Center poll conducted in January 2009 found it ranked last on a list of 20 priorities for American adults. Economy, jobs and terrorism were ranked at the top of that list.
Cap-and-trade and Corporate ‘Welfare’
Cap-and-trade is short hand for a policy that would try to forcibly lower U.S. carbon dioxide (CO2) emissions. Although proponents claim it is a solution to global warming, critics warn it will barely alter temperatures (0.013 degrees of ‘prevented’ warming) and a similar plan has failed to stop emissions from rising in Europe.
The Los Angeles Times defined it this way on May 18: “The ‘cap’ refers to the limit the government imposes on industrial emissions. Major emitters, such as power plants and factories, obtain permits from the government or from other companies. That’s the ‘trade.’ It’s also the incentive: Companies that reduce emissions by investing in efficiency or renewable power can sell permits to others.”
Obama’s 2010 budget assumed $78.7 billion in revenue in 2012 from auctioning off those emission credits to companies (and $645.7 billion by 2019), but according to the Wall Street Journal the Waxman-Markey bill will give away 85 percent of those permits until 2026.
Even budget director Peter Orszag said in March that if the permits weren’t auctioned “it would represent the largest corporate welfare program that has ever been enacted in the history of the United States.”
Corporate welfare may be the reason so many companies are lobbying for cap-and-trade. The Washington Post reported on May 26, that there is a “strong consensus” at the Copenhagen summit among hundreds of CEOs and business experts favoring cap-and-trade over a carbon tax.
“Leaders agreed at the end of the three-day conference on the need for ‘immediate and substantial’ emission cuts by 2020, based on the best science available, followed by cuts of "at least half of 1990 levels by 2050,” the Post said.
But the Post ignored claims that companies are supporting cap-and-trade out of self-interest.
Jeff Immelt, the CEO of General Electric, is one such CEO who has advocated cap-and-trade on one of the news networks his company owns: CNBC. Immelt appeared on “Squawk Box” May 20 to push what he called “the most effective way to create a [carbon] market and go.”
GE is the largest wind turbine generator maker and according to an “O’Reilly Factor” investigation the company “stands to make billions” from cap-and-trade.
Bill O’Reilly pointed out the “conflict of interest” and said, “Now, if this were any other industry, anything else, there’d be a federal investigation. But the press is largely above the law. There’s no oversight on the press at all,” May 15.
Other companies already invested in low-carbon forms of energy like wind, solar or nuclear are poised to benefit from cap-and-trade, while it will devastate coal and gas companies as well as the overall economy, which is heavily reliant on fossil fuels.
Ebell said GE has large nuclear and wind divisions and a program called “eco-imagination” which would go into companies and tell them how to increase their energy efficiency.
In the short- term, Ebell said GE and many other companies lobbying for this policy “might make windfall profits. Jim Rogers of Duke Energy is looking for a big retirement package and he might get it.”
According to The Journal, Europe’s cap-and-trade program illustrated the way free permits “can fatten polluters’ profits without protecting consumers from higher prices.”
Lack of coverage means lack of criticism
By rarely covering cap-and-trade the networks successfully avoided major criticism of the policy including enormous costs and past failures.
According to The Heritage Foundation, cap-and-trade is always a “bad idea,” not only because of the huge economic burden, but also because of “lack of transparency and potential for fraud and abuse.”
But Heritage specifically analyzed the draft version of the Waxman-Markey bill and estimated real GDP losses of $9.6 trillion as well as 1.1 million in job losses.
“Though the proposed legislation would have little impact on world temperatures, it is a massive energy tax in disguise that promises job losses, income cuts, and a sharp left turn toward big government,” Heritage said.
Electricity, gasoline and natural gas prices would also skyrocket by 90, 74 and 55 percent respectively according to Heritage.
Those cost increases were not reported by the networks, the same networks that complain about “skyrocketing” and “runaway” gas prices.
Myron Ebell of the Competitive Enterprise Institute called Waxman-Markey “probably the most destructive bill ever passed out of a congressional committee” in a statement. He also told BMI it is “a sneaky, yet indirect tax which will raise their energy prices and any good or service that uses energy. Which is basically everything.”
Aparna Mathur of the American Enterprise Institute testified before Congress about the economic impact of cap-and-trade. “We estimate that a cap and trade system, with a $15 permit price, will increase the cost of everything--from food, clothing, shoes and home furnishings by about 1 percent, of gasoline by 7.7%, electricity 12.5%, and natural gas by 12.3%.” But Mathur noted that those estimates were “conservative” and permit prices are “extremely volatile.”
“We can safely project that our estimates will be some multiple of these higher prices i.e. our price increases will be much higher than we project here,” Mathur said.
Even the Environmental Protection Agency and Congressional Budget Office have admitted that cap-and-trade will result in higher energy prices.
EPA noted that “lower income households are disproportionately affected by a GHG (Green House Gas) cap-and-trade policy because they spend a higher fraction of their incomes on energy-intensive goods.” EPA estimated a 22 percent increase in electricity prices and gas prices over $4 per gallon by 2030.
‘Dress Rehearsal’ Bill
In 2008, the Senate debated another cap-and-trade bill known as Lieberman-Warner. At that time, the news media from CNN, The New York Times and Time magazine praised the bill.
CNN’s Gerri Willis called it “historic,” while the Times called it “bold national policy.”
Sen. Byron Dorgan, D-N.D., told the Washington Post June 1, 2008 the Lieberman-Warner bill was a “dress rehearsal for next year.”
Media treatment of that “dress rehearsal” was predictably skewed. Major newspapers and segments on CNN mentioned the bill had critics, but skipped over questions about the need for cap-and-trade. The outlets also downplayed the potential cost of cap-and-trade.
The Times even buried condemnation of the bill as “economic disarmament,” four paragraphs from the end of a 1,363-word story.
The Los Angeles Times included seven proponents of the bill on June 2, 2008, but included only one opposing voice in that story.
CNN and The New York Times both mentioned carbon trading schemes in Europe, but without addressing any of its failures.
According to the Journal, European “emissions have risen instead of fallen (by 1 percent per year since 2005).” In fact, “European regulators note that the program just completed its pilot phase, but they acknowledge that changes are needed.”