Republicans are claiming that America’s new Cap and Trade Bill legalising a carbon tax will double electricity prices for ordinary homes. It’s not quite as they say, but the truth behind the scare stories is that the carbon tax WILL increase the cost of electricity – and rightly so. It’s just another reason for ordinary Americans to get off-grid ready – start generating power from their own solar and wind gear.
The ACES Bill currently making its way to the Senate is defended by environmentalists who say if anything it will bring power price down slightly, but media reports suggest the carbon tax will increase the cost of grid-power because of the way power stations operate.
To put it simply, power from coal and oil will attract a carbon tax and so increase in price. Power from renewables and nuclear will not attract the tax.
While power from coal and oil still makes up the majority of the power we consume, as it does today, overall prices will certainly rise. But that is a good thing because America uses too much energy wastefully. The next decade is set to see a sharp increase in renewable energy generation, but not everywhere. And even renewables will attract some carbon tax – the manufacture of solar panels for example, is highly carbon intensive.
So chances are that many States will experience a sharp rise in prices, at least in the medium term — i.e. the next decade or so. And Republicans allege the Democrats are rigging the Carbon allowances on a State by State basis to pass the bulk of the increases into Republican states. This sounds like a phoney claim.
David Hawkins, Director, climate center, Natural resources defense council ,told a Congressional hearing that prices will come down slightly by 2020 – saving $6 a month for the average household – but this figure includes the hidden assumption that there will be sharp increases in energy efficiency, so even the Greens secretly concede that actual home power costs will rise.
As a result of the Republicans campaign, a groundswell of public opinion appears to be developing against the legislation that could help derail a vote in the Senate.