- - Monday, September 7, 2015

ANALYSIS/OPINION:

Democrats embracing President Obama’s carbon-regulating Clean Power Plan may want to be cautious and consider recent history. The president’s final regulations resurrect a “cap-and-trade” program so unpopular it cost many supportive Democrats their seats in Congress just five years ago.

Cap-and-trade programs are broadly unpopular because they create an artificial marketplace where electricity generators have to buy credits to emit carbon dioxide. These costs then get passed along to households and businesses in the form of higher electricity bills.

As a candidate in 2008, President Obama conceded this point telling The San Francisco Chronicle, “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.” Not surprisingly, when the president tried to move this plan through Congress it faced strong opposition.

House Speaker Nancy Pelosi brought the cap-and-trade plan to the House floor the next year, where it narrowly passed by a 219-212 margin, with 44 Democrats opposing the bill. It was a vote that made vulnerable Democrats even more vulnerable, and it was ultimately for naught.

Despite having a robust Democratic majority in 2009 and 2010, Senate Majority Leader Harry Reid declined to bring the cap-and-trade bill to the Senate floor. His Democratic colleagues were undoubtedly aware of the policy’s unpopularity as a 2009 Pew Research poll found Americans who were familiar with the legislation opposed it by a 2 to 1 margin.

A year later, Democrats faced the wrath of an electorate not eager to see higher energy prices. The party lost its House majority and more than two-dozen representatives who voted for the cap-and-trade package were swept out of office.

One of the most notable was Rep. Rick Boucher, a well-respected 14-term Virginia lawmaker who was instrumental in helping the bill pass the House. When asked, a former Boucher chief of staff said, “I don’t think there’s any question about it, cap and trade was the issue in the campaign. If Rick had voted no, he wouldn’t have had a serious contest.”

Unfortunately, this electoral rebuke did not slow the president’s desire to inflict this unpopular program on the American people.

The president’s Clean Power Plan, which he is attempting to implement as a regulation rather than through the legislative process, will set unique carbon limits for every state. States projected to be over their limit will then face the choice of switching to different fuel sources that would be costlier or buying surplus emissions “credits” from states that are under their carbon limit. That last option, which many states will be forced to take, is essentially a cap-and-trade program.

This cap-and-trade regulation pits states against one another, with the Environmental Protection Agency (EPA) picking winners and losers. In this case, the losing states are made up almost exclusively of states that rely on coal to generate electricity. Under the final regulation, the EPA gave 22 states more stringent emission reduction requirements than were initially included in the proposed plan. Of these 22 states, 21 rely on coal to help keep electricity prices affordable. The collective average retail electricity price for these 21 coal-dependent states was 12 percent below the national average last year.

Higher energy costs aren’t going to be any more popular in 2016 than they were in 2010, especially because these costs disproportionately hurt lower- and middle-income families. When energy prices increase, these households are forced to make some terrible decisions. According to a survey of low-income households, 24 percent reported that they had gone without food for at least one day as a response to high energy bills. Thirty-seven percent said they went without medical or dental care, and 19 percent said that someone had gotten sick in their household because their home was too cold. Now the president wants them to pay even more.

From a broader economic standpoint, the EPA’s regulations will inflict pain over the entire country. The true cost of the plan won’t be known for some time, but the proposed regulation was projected to cost more than $40 billion per year, raise electricity prices in 43 states, and have practically zero impact on global climate change. It’s no wonder that legislatures, governors and attorneys general representing 32 states expressed opposition to the EPA’s proposed regulation. Unfortunately, those concerns seem to have been largely ignored.

The president once famously quipped that “elections have consequences,” but now he is undermining the electoral process by ramming through a program that couldn’t even get through a Democratic-controlled Congress. No president should be able to unilaterally raise energy prices on states. As a lame-duck president, he doesn’t have to worry about facing voters again. Other Democratic lawmakers and candidates do, however, and they support this plan at their own peril.

Mike Duncan is president and CEO of the American Coalition for Clean Coal Electricity. He is the former chairman of the Republican National Committee.

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