The Treasury Memo: Classic Spin-Job by Clean Energy Opponents
Posted September 16, 2009 in Solving Global Warming
UPDATE: Politico issued a correction to their initial take on this, noting (as we do) that the spin is far greater than the actual content of the memo.
The clean-energy opponents at the Competitive Enterprise Institute (CEI) are back from their August vacation with a new "smoking gun" document that they say reveals the true costs of federal climate policy.
As reported by Declan McCullough, CEI dug up a memo by a Treasury Department staffer who evaluated the economic impacts of a proposal for federal climate legislation that would auction 100% of the pollution allowances. According to Declan (who has been confused by CEI-generated information before) the plan would cost consumers $100-$200 billion per year, or $1,761 per household.
But the claims about the memo don't really measure up to whats in the memo:
- The memo does not say climate legislation will cost the public $100-$200 billion. It says "Given the administration's proposal to auction all emission allowances, a cap-and-trade program could generate federal receipts on the order of $100 to $200 billion annually." [emphasis mine]
- In fact, the memo appears to argue for auctions, saying
- "One advantage of auctioning allowances is the potential for generating large revenues...that could be used to offset distortionary taxes on labor or capital, improving the economic efficiency of the tax system and reducing overall compliance costs to the economy."
- No one is talking about 100% auction anymore anyway, as Media Matters points out.
- The memo never mentions the amount of $1,761. Wherever that number came from, it isn't in the document that is supposedly behind this story.
- In any case, this memo from 9 months ago about a hypothetical bill has been superseded by three independent studies of the bill that actually passed the House. The non-partisan Congressional Budget Office, the independent Energy Information Administration, and the Environmental Protection Agency all conclude that climate legislation will cost American households less than a postage stamp per day.
So one thing is clear - that opponents of clean energy legislation are claiming this memo says things it doesn't.
Just for the record, this appears to be the second in a series by McCullagh and CEI, who earlier this summer tripped over themselves attempting to explain another memo purportedly showing the EPA was hiding evidence that global warming isn't so bad.
And of course, this is just the latest in the string of "tax" accusations which all rely on the same faulty logic that moneys raised by a climate policy are the same as a tax levied on each American household. See previous discussions of the $1,300 tax and the $3,100 tax by my colleague Laurie Johnson.