Europe's Disastrous Climate Policy - a Lesson for Congress

New Report Exposes Massive Flaws of Emissions Trading Scheme
 
Washington, D.C., October 29, 2009—The Competitive Enterprise Institute today cheered the publication of a new report that could help save the United States from an expensive, damaging new system of global warming regulation. The report, published by the British think tank TaxPayers’ Alliance, details the failure of Europe’s “Emissions Trading Scheme,” which was meant to reduce greenhouse gas emissions across the continent. Congress is now considering its own version of the EU’s scheme, known as a cap and trade system of emission control.
 
“This report couldn’t have come at a more important time,” said Director of Projects and Analysis Iain Murray. “The leadership in both houses of Congress are poised to ram through cap and trade restrictions which would slow the economy, stifle innovation and  create an enormous burden on American families. Hopefully exposing the costly and wasteful consequences of such policies in Europe will drive home the threat they pose here in the U.S.”
 
The study, The Expensive Failure of the European Union Emissions Trading Scheme, documents the massive costs imposed by the scheme and the highly volatile nature of the trading mechanism which was supposed to regulate allocation of emissions permits across the continent. The report further details how policymakers in the UK have not only ignored the scheme’s substantial flaws, but have at times adopted policies that have actually increased the burden born by British consumers and taxpayers.
 
“The European Union Emissions Trading Scheme has cost families across Europe tens of billions of dollars but it has been a goldmine for energy companies, which have made huge windfall profits,” said TaxPayers’ Alliance Research Director and study author Matthew Sinclair. “Despite that, it has failed to produce a stable carbon price, leaving consumers with an unpredictable addition to their bills.
 
“Manufacturers already struggling to compete with emerging economies like India and China cannot cope with such a substantial addition to their costs, and driving them abroad won’t help cut emissions – but will mean lost jobs,” Sinclair pointed out. “Americans shouldn’t make the same mistake and risk their prosperity following the same flawed strategy that Europeans are paying such a steep price for.”