Newt Gingrich's Cap-And-Trade Video Spreads Falsehoods

The Video Exploits Outdated Footage Of President Obama To Distort The Truth

The video shows President Obama explaining: "Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket." [AmericanSolutions.com, accessed 6/1/09]

While President Obama did utter those words a year-and-a-half ago, he was not speaking about the American Clean Energy and Security Act.  At that time, President Obama was discussing a hypothetical cap-and-trade system that does not resemble the current legislation, which protects consumers and ultimately lowers costs.

The Government Will Give Initial Carbon Allowances For Free.  According to the Houston Chronicle: "The bill's authors had to make a major compromise, however, agreeing to give away many of the initial permits rather than selling them through an auction. Proponents of giveaways argued they would keep the cost of compliance low in the early years of the program, so technology can catch up with the law's goal of reducing total emissions by about 80 percent by 2050." [Houston Chronicle, 5/25/09]

A Clean Energy Standard Would Save $95 Billion On Energy & Gas Bills.  According to the Center for American Progress: "A national renewable electricity standard, a key piece of the clean energy legislation currently before Congress, would save households and businesses in every state billions of dollars in electricity and natural gas bills... The numbers come from the Union of Concerned Scientists, who earlier this year analyzed a renewable electricity standard that would aim to have 25 percent of our electricity come from renewable sources by 2025. They found that this standard would save families and businesses $95 billion in electricity and natural gas bills through 2030 and spur new investments and hundreds of thousands of new clean-energy jobs." [Center for American Progress, 5/19/09]

"Consumers Would Receive Around $750 Billion...To Offset The Higher Energy Costs." According to the New York Times: "Opponents of climate legislation paint efforts to reduce carbon emissions as 'cap and tax' policy, but a new analysis of the current House proposal to curb greenhouse gas emissions finds that consumers would receive around $750 billion in direct and indirect handouts and subsidies through 2030 to offset the higher energy costs." [New York Times, 5/20/09]

"The Program Provides $227 Billion To Low-Income Households...To Protect Against Increases In Rising Heating Oil Costs." According to the New York Times: "In addition, the program provides $227 billion to low-income households, $90.6 billion to local gas companies, and nearly $20 billion to protect against increases in rising heating oil costs." [New York Times, 5/20/09]

The Video Uses A Discredited Figure To Characterize The Cost Of Cap-And-Trade On Families

According to the video: "Cap and Trade will: Raise an average family's annual energy bill by $1,500 annually." [AmericanSolutions.com, accessed 6/1/09]

As Media Matters Action Network has noted, estimates of the cost of cap-and-trade by Republicans have ranged from $1,500 to $4,300 per family.  In actuality, the EPA estimates the American Clean Energy and Security Act would cost less that $150 per family.

Even Before Markup, The EPA Estimated Cap-And-Trade Bill Would Cost Less Than $150 Annually.  According to the Wall Street Journal: "The Environmental Protection Agency presented its analysis of the Waxman-Markey bill on Tuesday and said the contentious plan would cost households less than $150 a year.  That's a far cry from some of the dueling price tags that have been bandied about." [Wall Street Journal, 4/21/09; emphasis added]

• EPA: Markup Changes In Bill Decrease "The Impact On Household Energy Bills." According to an EPA report: "The change in early-year cap levels lowers allowance prices slightly. In the draft bill, the year-2020 emissions cap for covered sources was set at 20% below the year-2005 level. In H.R. 2454, the year-2020 cap is changed to 17% below the year-2005 level. (The 2012, 2030, and 2050 targets remain the same.) That relaxation of the cap, by itself, will lower allowance prices by 3%. Accordingly, that single change will lower the cost of the legislation for households, in part by lowering the impact on household energy bills." [EPA, accessed 5/27/09; emphasis and parentheses original]

The Video Ignores The United States' Long History Of Using Cap-And-Trade

At the end of the video, viewers are asked to sign on to American Solutions protest: "I hereby petition Congress to reject any and all legislation (or regulatory action by the EPA) that would enact new energy taxes and/or establish a national cap and trade system for carbon dioxide that would, as President Obama has said, cause electricity and other energy prices to 'necessarily skyrocket.'" [AmericanSolutions.com, accessed 6/1/09]

Cap-and-trade is nothing new - it is already used all over the United States through the "regulatory action by the EPA" that Gingrich is so concerned about.

The EPA Improves Environmental Conditions "Through The Use Of The Proven Cap And Trade Approach". According to the EPA: "Through the use of the proven cap and trade approach, CAIR achieves substantial reductions of sulfur dioxide (SO2) and nitrogen oxides (NOx) emissions and is a powerful component of the Administration's plan to help over 450 counties in the eastern U.S. meet EPA's protective air quality standards for ozone or fine particles." [EPA.gov, 3/10/05]

EPA Considers Cap-And-Trade The "Most Powerful, Efficient And Proven Tool Available" To Improve Air-Quality Standards. According to a 2005 EPA press release: "Clear Skies cap and trade approach will give states the most powerful, efficient and proven tool available for meeting new, tough, health-based air quality standards for fine particles and ozone. Most counties will be able to meet the new standards without having to take any new local measures beyond the Clear Skies power plant reductions. The market-based trading approach will substantially cut the overall cost of compliance that is passed on to consumers and shareholders." [EPA.gov, 10/27/05]

The U.S. already uses cap-and-trade to limit carbon dioxide (CO2) emissions.

Ten States Are Participating In A Cap-And-Trade Effort To Reduce CO2 Greenhouse Gas Emissions. According to its website, the Regional Greenhouse Gas Initiative (RGGI) "is the first mandatory, market-based effort in the United States to reduce greenhouse gas emissions. Ten Northeastern and Mid-Atlantic states will cap and then reduce CO2 emissions from the power sector 10% by 2018. States will sell emission allowances through auctions and invest proceeds in consumer benefits: energy efficiency, renewable energy, and other clean energy technologies. RGGI will spur innovation in the clean energy economy and create green jobs in each state." [RGGI.org, accessed 5/13/09]