June 5, 2007

RALEIGH – North Carolinians could face hundreds of millions of dollars in new taxes and an assault on their safety and standard of living, in a misguided effort to fight global warming. A new John Locke Foundation Spotlight report delivers that warning.

Click here to view and here to listen to Dr. Roy Cordato discussing this Spotlight report.

“State officials are considering three hidden taxes on electricity use and larger, safer vehicles,” said Dr. Roy Cordato, JLF Vice President for Research and Resident Scholar. “All are tied to efforts to reduce global warming. None would have any impact on temperatures.”

The new taxes would be hidden by the names “public benefits charge,” “renewable portfolio standard,” and “feebate,” Cordato said. “The real purpose of these hidden taxes is to punish North Carolina citizens for using what some members of the General Assembly, environmental bureaucrats, and ideologues think is too much of the wrong kind of energy.”

The “public benefits charge” is a per-kilowatt tax on electricity use that would generate money for a state Public Benefits Fund, Cordato said. That fund would pay for statewide programs targeting items such as energy efficiency and renewable energy. “It is estimated in the state energy plan that if the tax in North Carolina was similar to other states it would cost electricity consumers $181 million a year.”

The “renewable portfolio standard” is the most dishonest of the plans, Cordato said. The General Assembly is considering legislation to force public utility monopolies to generate at least 7.5 percent of their North Carolina electricity from renewable energy sources, but only renewable sources approved by the environmental movement. “The legislation mentions wind power, solar power – even energy from chicken and hog waste – while ignoring the cleanest and least expensive source of renewable energy: nuclear power.”

Since these other forms of renewable energy typically cost twice as much as energy from conventional sources, electricity customers would see more expensive bills, Cordato said. “Electricity rates would be raised to pay for this extravagance, and the annual cost could reach more than $300 million in 10 years.”

The “feebate” is an effort to encourage people to drive more fuel-efficient cars by charging registration fees based on an automobile’s mileage rating, Cordato said. “Supporters of this plan have decided you should drive a smaller, lighter car,” he said. “It doesn’t matter that you prefer the safety of a larger vehicle. It doesn’t matter that your family needs the space provided by a larger vehicle. It doesn’t matter that lower-income families with older, less fuel-efficient cars will take a bigger hit from this plan.”

Along with direct costs, the hidden taxes would generate hidden costs on families and industry, including increased risks of traffic injuries and deaths, Cordato said. “None of these considerations were included in the analysis of these proposals,” he said. “But we shouldn’t be surprised. The analysis comes from a consulting firm called the Center for Climate Strategies, hired with grants from several well-heeled leftwing foundations.”

The analysis also ignores the fact that none of these proposals would do anything to reduce temperatures, Cordato said. “These hidden tax hikes would impose significant explicit and implicit costs with absolutely no climate-change benefits,” he said. “This is a conclusion for which the science is truly settled. When the implications of these taxes are considered, it is quite clear that the primary accomplishment would be to curtail the pursuit of happiness and the American dream for the people of North Carolina.”

Dr. Roy Cordato’s Spotlight report, “New Global Warming Taxes? Disguised Taxes Would Be All Cost, No Possible Benefit for North Carolinians,” is available at the JLF web site. For more information, please contact Cordato at (919) 828-3876 or [email protected]. To arrange an interview, contact Mitch Kokai at (919) 306-8736 or [email protected].