by Christine Hall
May 30, 2008

Washington, D.C., May 30, 2008—The U.S. Senate on Monday will likely start debate on energy-rationing legislation that would raise energy prices dramatically for American consumers, while benefiting big business special interests.

“Americans who don’t think gasoline prices are high enough should be thrilled to support the Lieberman-Warner cap-and-trade bill,” said Myron Ebell, Director of Energy and Global Warming Policy for the Competitive Enterprise Institute.

“Similar ineffective global warming policies have pushed gas prices above eight dollars a gallon in the European Union,” Ebell noted. “Higher electricity and gas prices would hit poor people the hardest, but probably wouldn’t bother former Vice President Al Gore or Senator Barbara Boxer’s neighbors in Marin County, California.”

“The Lieberman-Warner energy-rationing bill would be the biggest government intervention in the economy since the Second World War, when the federal government put the U.S. on war footing and handed out ration coupons,” Ebell concluded.

CEI is a non-profit, non-partisan public policy group dedicated to the principles of free enterprise and limited government. For more information about CEI, please visit our website at www.cei.org.

Facts about Lieberman-Warner Energy-Rationing Bill,

S. 2191/S. 3036

Lieberman-Warner = a tax.

Cap-and-trade can only work by raising the price of lower-priced hydrocarbon fuels, so that people are forced either to use higher-priced alternatives or to use less energy. Even worse, it’s hidden tax. Voting for higher taxes can lead to election defeats, but cap-and-trade makes it much harder for consumers to know that their elected officials are to blame for rising energy prices. In a report released last April, the Congressional Budget Office says that “most of the cost of meeting a cap on CO2 emissions would be borne by consumers, who would face persistently higher prices for products such as electricity and gasoline.”

Lieberman-Warner = a wealth transfer scheme.

The primary purpose of cap-and-trade is not to reduce greenhouse gas emissions, but to transfer wealth from consumers to politically-powerful special interests. That’s why so many big companies support cap-and-trade. In fact, higher energy costs will hit poor people the hardest, since they spend a larger share of income on energy.

Lieberman-Warner = big government central planning.

Lieberman-Warner puts the federal government in charge of deciding how much energy Americans can use. It would create new boards and agencies with enormous and ill-defined powers and would require huge new bureaucracies to administer all the red tape. The ethanol mandates of 2005 and 2007 are showing once again the disastrous effects of even just a little central planning.

Lieberman-Warner = Open to Political Favoritism and Corruption.

It’s no coincidence that the biggest promoter of cap-and-trade until its demise was the Enron Corporation.

Lieberman-Warner = The Most Ineffective and Expensive Way to Address Potential Global Warming.

The European Union’s Emissions Trading Scheme is proving horrendously expensive and unpopular but is actually doing little to reduce greenhouse gas emissions. See Open Europe’s analysis, “Europe’s Dirty Secret: Why the EU ETS Isn’t Working”, at openeurope.org.uk.