Climate change policies would raise taxes, limit freedoms

February 26, 2008

RALEIGH – A new John Locke Foundation report guides North Carolinians through “vague, overbroad” policies proposed to help the state address global warming. The report shows how the policy proposals would raise taxes, hurt the poor, and limit consumers’ choices.

Click here to view and here to listen to Daren Bakst discussing this Policy Report.

“This report translates each of North Carolina’s proposed climate change policies into plain English so that the public and policymakers can understand what really is being proposed,” said report author Daren Bakst, JLF Legal and Regulatory Policy Analyst. “The goal is to cut through the fog and identify the essence of each recommendation.”

Bakst investigated nearly 56 policy proposals that emerged in October from the state’s Climate Action Plan Advisory Group (CAPAG). The Legislative Commission on Global Climate Change is now considering those proposals, including a “cap-and-trade” program for carbon dioxide (CO2) emissions.

“In this type of program, the government would cap the amount of total carbon dioxide emissions permitted,” Bakst said. “It is an energy-rationing scheme that acts as an energy tax. Regulated parties would have to own a permit to emit each ton of CO2. If a regulated entity does not have enough permits, it could buy permits from other regulated entities.”

“The words ‘cap-and-trade’ disguise the fact that this is a new tax on North Carolinians,” he added. “The CAPAG proposals also fail to explain that this new tax would be regressive. That means it imposes disproportionate harm on the poorest North Carolinians.”

The cap-and-trade proposal is one of 18 regressive proposals analyzed in Bakst’s report. He also cites 23 policy proposals that recommend new taxes, 32 that involve new taxpayer-funded government subsidies, and 28 that ignore the importance of consumer choice and personal freedom.

Another proposal that would create a regressive new tax and limit consumers’ freedom of choice is a “feebate” on vehicles, Bakst said. “The feebate tax would increase based on a vehicle’s CO2 emissions, fuel consumption, ‘and/or other measures of a vehicle’s environmental impacts,’” he said. “This recommendation is designed to help government change the types of cars people buy and sell in North Carolina.”

Bakst also takes aim at policy proposals linked to land development planning. “Under one proposal, transportation funds would be withheld from any municipality or county that does not develop a land use or development plan that meets state standards,” Bakst said. “High-density development euphemistically known as ‘smart growth’ would be promoted through means such as development impact fees. Those impact fees are basically taxes on construction of new homes.”

These and other harmful policy proposals are based on unproven assumptions about the best way to deal with CO2 emissions, Bakst said. “The CAPAG recommendations assume that the only way to reduce carbon emissions is for the government to take action,” he said. “There is not one recommendation that presumes individuals and other private actors will take action on their own.”

CAPAG’s recommendations are also based on two other questionable assumptions, Bakst said. First, the policy proposals assume North Carolina must take some action to deal with global warming. CAPAG did not test the assumption, Bakst said. “Instead the group bought into recommendations prepared by a consultant called the Center for Climate Strategies, which is pursuing an agenda set by global warming alarmists.”

Second, CAPAG’s proposals assume reducing carbon dioxide (CO2) emissions will affect climate change, Bakst said. “This assumption should surprise no one who’s skeptical of this process,” he said. “It’s well-established that there is nothing the United States — or an individual state — could do to have any measurable effect on temperature. Rather than admit that fact, CAPAG tries to get around the ‘temperature problem’ by ignoring the goal of reducing temperature. Reducing CO2 becomes the goal, and reducing temperature is simply never mentioned again.”

Bakst found one glaring omission in the list of policy proposals designed to curb carbon dioxide emissions. “Nuclear energy offers arguably the best approach to reducing CO2 emissions,” he said. “The CAPAG proposals make no mention of that option.”

In an easy-to-follow format, Bakst translates each of the 56 recommendations in areas such as energy use and supply, transportation and land-use planning, agriculture, forestry, and waste management. “Many recommendations would increase spending in the state budget,” he said. “Since the state is required to have a balanced budget, these increases would require new taxes or spending cuts in other government programs.”

The new guide offers valuable information to the people who will ultimately pay for new climate change polices, Bakst said. “If North Carolinians are going to be asked to accept higher taxes, more taxpayer-funded subsidies to the private sector, more limits on consumer choice and personal freedom, and more policies that hurt the poor, at least they should understand what they’re being asked to accept,” he said. “This guide will help taxpayers and policymakers decide whether these policy proposals really make sense for North Carolina.”

Daren Bakst’s Policy Report, “Taxes, Subsidies, and Regulation: A Guide to North Carolina’s Proposed Global Warming Policies,” is available at the JLF web site. For more information, please contact Bakst at (919) 828-3876 or [email protected]. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or [email protected].