Have Some Cap & Trade With Your CAFE?

May 26, 2009

In case you didn't know, the new American Clean Energy and Security Act of 2009 — our country's new fuel economy and emissions legislation — includes a huge new tax in the form of carbon Cap and Trade.

Some might consider the new American Clean Energy and Security Act of 2009 to be a great idea. I don't. Thinking people can disagree. However, for those who support the new legislation, I appeal to your right brain to consider the inclusion of Cap and Trade Carbon Taxes that are foundational to this new CAFE legislation.

Cap and Trade carbon taxes will give the government huge control over every economic sector by adding an "energy tax" to (conceivably) every product produced in the U.S. The Congressional Budget Office estimates that this tax will add a staggering $600 billion in annual federal tax revenues. This money will be used (in part) to increase spending on the creation of infrastructure for the development and deployment of grid-connected electric vehicles.

Oh sure they'll only spend the new tax revenue on that.

Anybody check to see what has happened to the Social Security Trust Fund?

If you believe in the trustworthiness of those in Washington, D.C., I've got an all-new 100-mpg fish carburetor design ready to be patented, and I'd be happy to cut you in on part of the action for a small investment.... Just doing some quick math reveals that a full implementation of Cap and Trade will cost over $1,600 per year for every citizen (children included) in the U.S. Thankfully, the cost may be a bit lower because illegal aliens will also be subject to the higher product costs.

The new taxes will make all products and many services more expensive, and will dramatically affect the transportation sector. Get ready to pay more to drive, and get ready to see Washington, D.C. go crazy as they decide what to do with all new money that will be coming out of your pockets. It is pure foolishness to believe that these new taxes will only be spent on transportation infrastructure projects.

If you'd like to read a unbiased, relatively complete assessment of the new American Clean Energy and Security Act of 2009, I've attached a three-page file here from a leading automotive research firm, CMS. You may not lean toward being a libertarian as I do, but unless you want to turn over control of our economy (and therefore our society and freedom) to the government, this should give you pause.

There is still time to influence your legislators about cap and trade, and I encourage you to do so. It will impact your life with cars, and your life in general, for the foreseeable future. That makes it worth a phone call or e-mail.

Because in my heart I yearn to be a libertarian, big government is an anathema to me. This said, I do understand and support the government's role in keeping the peace, keeping us safe, providing for commerce, etc. The basics. Cap and Trade taxes give the government way, way more economic control than they've ever had. I don't see this going well, as I explained here.

If I end up being wrong, then somebody put it in their planner to ping me in seven years to tell me, "You were wrong." Frankly, I hope somebody can send me that note, and it will come from a better, cleaner, more vibrant, economically stable time.

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Obama Administration Announces New Fuel Economy Legislation

  • The proposed new national auto program standards will cover model years (MYs) 2012-2016 and will require an average fuel fleet economy standard of 35.5mpg in 2016 compared to the Corporate Average Fuel Economy (CAFE) program established by the Energy Independence and Security Act (EISA) 2007 legislation, which specified a minimum 35mpg in 2020.
  • The US Environmental Protection Agency (EPA) and the Department of Transportation (DOT) are jointly developing the proposed rulemaking that would apply to passenger cars, light-duty trucks and medium-duty passenger vehicles. These vehicle categories currently contribute approximately 60% of US transportation-related greenhouse gas (GHG) emissions.

US President Barack Obama has announced a new harmonized national policy intended to reduce fuel consumption and GHG emissions for all new cars and trucks sold in the United States. The proposed new national auto program standards will cover MYs 2012-2016 and will require an average fuel fleet economy standard of 35.5 miles per gallon (mpg) in 2016 (39mpg for cars, 30mpg for trucks), or approximately 250 grams CO2/mile (155.4 grams CO2/ km). This represents an accelerated goal attainment timeline of four years compared to the CAFE program established by the EISA 2007 legislation, which specified a minimum 35mpg in 2020.

The result is a projected reduction in oil consumption of approximately 1.8 billion barrels over the life of the program (equivalent to the amount of oil the US imports annually from Saudi Arabia, Venezuela, Libya and Nigeria combined), and a projected total reduction in GHG emissions of approximately 900 million metric tons.

National Auto Plan
The US EPA and the DOT are jointly developing the proposed rulemaking that would apply to passenger cars, light-duty trucks and medium-duty passenger vehicles. These vehicle categories currently contribute approximately 60% of US transportation-related GHG emissions.

The US EPA is proposing GHG emissions standards under authority of the Clean Air Act (CAA) of 1990 section 209 (b). Simultaneously, the DOT's National Highway Traffi c Safety Administration (NHTSA) is proposing CAFE standards under the Energy Policy and Conversion Act (EPCA), as amended by EISA. Both agencies issued a Notice of Upcoming Joint Rulemaking, which adopts uniform federal standards to regulate both fuel economy (CAFE) and GHG emissions while preserving the legal authorities of DOT, EPA and the state of California.

When adopted, these standards would represent a harmonization of national policy in accordance with the separate statutory frameworks under which the US EPA and DOT operate and would subsequently address the current administration's commitment to reconsider the denial of the California waiver by the Bush administration.

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