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When it comes to economic policies, the U.S. Chamber of Commerce says Tim Kaine, the Democratic candidate for U.S. Senate, is on the wrong track.
A television ad by the Chamber puts the viewer on the front of a train, roaring past billboards proclaiming Kaine’s shortcomings. Among its claims: that Kaine, as governor, supported "higher energy costs for families."
As proof, the chamber sent us Kaine’s testimony before a U.S. Senate hearing on climate change and the Chesapeake Bay in 2007. Kaine warned that rising temperatures and sea levels would damage the bay and the Hampton Roads region, and he urged the Senate to take action.
"I support legislation that includes a cap-and-trade program for emissions of all greenhouse gases, imposes economy-wide controls rather than singling out a particular sector, and accounts for state efforts to standardize methodologies to record and measure greenhouse gas emissions through the Climate Registry," he said.
Soon after his testimony, Sen. Joseph Lieberman, at the time a Democrat from Connecticut, and Sen. John Warner, R-Va., introduced a bill to implement a cap-and-trade system. Previous cap-and-trade bills were introduced in 2003 and 2005. Kaine did not say that he specifically supported a particular bill.
Sen. John McCain, R-Ariz., who introduced the legislation in 2003, said when the 2007 bill was put in the hopper, "The enormous economic costs of damage caused by air pollution and greenhouse gas emissions to the environment and human health are not factored into the price of power produced by fossil-fueled technologies. Yet, it’s a cost that we all bear, too often in terms of ill-health and diminished quality of life."
Under cap and trade, the government would limit the allowable emissions of carbon dioxide and other greenhouse gasses. Companies that emit carbon dioxide, such as electric utilities, would either have to reduce emissions by using cleaner technology, or obtain credits from the government - either given or sold through an auction - to exceed limits.
The government could use the revenues in any number of ways, including paying for general expenses, developing new energy-efficiency programs and giving rebates to ratepayers. In the 2007 bill, the national cap on carbon dioxide declined gradually from 5,775 million metric tons in 2012 to 1,732 million metric tons in 2050.
The cost to consumers was analyzed by several government and non-government entities.
The Energy Information Administration concluded that the 2007 legislation would cause gas prices to go up by 22 to 49 cents a gallon in 2020. And that would increase to 41 to 101 cents per gallon higher in 2030.
Meanwhile, depending on the development of technology to capture and store carbon emissions, the average annual cost of household energy bills would increase by between $30 to $325 in 2020, and between $76 to $723 in 2030. Although the EIA does not make estimates beyond 2030, it says the costs would continue to escalate.
The Environmental Protection Agency ran its own numbers. It said mandates to manufacture cleaner fuels would cause gas prices to rise by 53 cents a gallon in 2030 and by $1.40 a gallon in 2050. The EPA also projected that electricity prices would increase 44 percent in 2030 and 26 percent in 2050.
Kaine spokeswoman Brandi Hoffine said that equating support for cap-and-trade legislation with support for "higher energy prices for families" is "ludicrous." She said Kaine supports cap and trade as part of a "package of larger reforms" that would "reduce our dependence on carbon-heavy energy sources and encourage the development of alternative energy and conservation."
She noted that some cap-and-trade proposals would have funneled proceeds from auctions back to consumers in rebates. Under a 2009 bill backed by President Barack Obama, the CBO said those in the lowest 20 percent of earners would save about $40 in 2020, a statistic Hoffine cited. But the CBO also said other households would pay more for electricity, averaging $175 more and up to about $340 more, because they would receive smaller rebates and use more electricity than low-income families.
Hoffine also pointed to a study about the Regional Greenhouse Gas Initiative, a 10-state compact for a cap and trade system. The system was put into place in 2009 and was evaluated after three years. The Analysis Group found that consumers saved a net of $1.1 billion compared to what the grid systems would have been without the cap-and-trade system, primarily because the states put auction proceeds toward energy efficiency programs. But ratepayers actually spent about 0.7 percent more for electricity up front.
"In general, it is true that controlling carbon emissions or other pollution from energy will raise the cost of energy relative to not controlling that pollution," Adele Morris, fellow and policy director in climate and energy economics at The Brookings Institution, said in an email. But "the cap and trade approach is a substitute for other, more costly, ways to regulate greenhouse gases. Right now, because cap-and-trade didn't pass, the EPA is pursuing regulation of those emissions under its existing Clean Air Act authority, which means command and control approaches to regulation."
The Center for Climate and Energy Solutions, the successor to the Pew Center on Global Climate Change, has issued fact sheets on several proposals for cap-and-trade legislation and programs.
"Others have claimed that the bill will have no cost impact, but this ignores the very real economic costs of shifting to a clean energy economy," the center said of the 2009 bill.
The Lieberman-Warner bill in 2007 proposed to auction some of the credits to pay for renewable technologies, workforce training and low-income energy assistance, while giving the rest to states and other recipients.
The legislation was replaced by a companion bill in 2008, which died in the Senate that year.
The U.S. Chamber of Commerce says in a TV ad that Kaine supported "higher energy costs for families."
It’s clear, as the Chamber notes in small print, that Kaine backs the concept of cap-and-trade legislation, but there’s no record of his support for a specific bill or proposal. Analyses of two measures that have been before in Congress in recent years concluded that cap-and-trade carries a cost for most consumers.
At least one cap-and-trade program in place has resulted in an average lower cost for consumers through energy efficiency and rebates. And cap-and-trade legislation is one of the least expensive options for controlling greenhouse gases, experts said.
So the assertion that cap and trade leads to higher energy prices is reasonable but depends on the specifics of a plan. The chamber cannot point to an instance where Kaine directly supported a particular measure that would raise energy bills, which is necessary context.
There is an element of truth and a great deal of hyperbole in the chamber’s claim that Kaine supported higher energy bills for families. We rate it Mostly False.
Chamber of Commerce, "Wrong Track" (ad), July 26, 2012.
Emails from Sally-Shannon Birkel, manager of media relations at the U.S. Chamber of Commerce, Aug. 7 and Aug. 20, 2012.
U.S. Senate Committee on Environment and Public Works, Kaine’s testimony in the hearing "Climate Change and the Chesapeake Bay," Sept. 26, 2007.
The Library of Congress Thomas, S. 2191 "Lieberman-Warner Climate Security Act of 2007," accessed Aug. 8, 2012.
The Library of Congress Thomas, S.3036"Lieberman-Warner Climate Security Act of 2008," accessed Aug. 8, 2012.
PolitiFact Ohio, "Democratic Rep. John Boccieri invokes GOP Sen. John McCain to back his cap-and-trade stance," Sept. 13, 2010.
Energy Information Agency, "Energy Market and Economic Impacts of S. 2191, the Lieberman-Warner Climate Security Act of 2007," April 2008.
Environmental Protection Agency, Letter to John Warner with economic analysis of S. 2191, March 14, 2008.
U.S. Senate Committee on Environment and Public Works, Testimony of Anne E. Smith at Hearing on America’s Climate Security Act of 2007, S.2191, Nov. 8, 2007.
Council on Foreign Relations, "Energy Independence and Security Act of 2007," Dec. 19, 2007.
Sen. Joseph Lieberman, "America’s Climate Security Act," accessed Aug. 8, 2012.
FactCheck.org, "Cap-and-trade cost inflation," May 28, 2009.
PolitiFact, "Your guide to cap-and-trade estimates," June 25, 2009.
George Allen for U.S. Senate, "Tim Kaine’s real record on energy," Dec. 7, 2011.
Congressional Budget Office, Cost Estimate on S. 2191, April 10, 2008.
Congressional Budget Office, Testimony on Containing the Cost of a Cap-and-Trade Program for Carbon Dioxide Emissions, May 20, 2008.
Congressional Budget Office, letterto Rep. Dave Camp on household cost of H.R. 2454 (American Clean Energy and Security Act of 2009), June 19, 2009.
Analysis Group, "The Economic Impacts of the Regional Greenhouse Gas Initiative on Ten Northeast and Mid-Atlantic States," Nov. 15, 2011.
EPA, "Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis
Under Executive Order 12866," February 2010.
Center for Climate and Energy Solutions, "Climate Policy Memo #3: Cost of the American Clean Energy and Security Act of 2009 Found to be Small According to Government Analyses," June 2009.
Center for Climate and Energy Solutions, "Climate Policy Memo #2: Eight Myths about the Waxman-Markey Clean Energy Bill," June 2009.
Pew Center on Global Climate Change, "Containing the Costs of Climate Policy," Fall 2008.
The New York Times, Reaping a Bonus from Cap and Trade, Jan. 27, 2012.
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