Blackouts and Bankruptcies

Americans concerned about the cost of impending environmental legislation should look across the pond.


British Prime Minister Gordon Brown gave a stellar performance in the art of scare-mongering last week when he warned in a speech to the Major Economies Forum in London that the global community had fifty days to avoid a "climate catastrophe." What Brown failed to mention is the effect his proposed green legislation would have on energy prices, which have risen dramatically in the U.K. since he became Prime Minister.

The reason for this is Cap and Trade legislation, which recently brought fresh misery to British consumers. Britain's leading energy companies announced that energy costs are likely to increase next year despite a fall in the price of wholesale energy. While the mainstream media typically used the news to condemn big business and big oil, the reality is that rising energy costs are certain in an economy constricted by a Carbon Emissions Trading Scheme (Cap and Trade).

Unlike in the United States, where a vigorous grassroots movement has held up Washington's move toward Cap and Trade, the British Climate Change Act sailed through the U.K. parliament last year. Only three Members of Parliament voted against the bill despite the fact that it was easily the most expensive ever passed in the history of Britain's parliamentary democracy. Government bureaucrats estimated the bill would cost around £404 billion ($662 billion) over four decades.  That translates to each U.K. household paying an extra £30,400 ($49,000) in energy costs over 40 years, a staggeringly wasteful sum. 

In capping the amount of CO2 businesses and households are allowed to emit, the government created a phony market in carbon.  Already, British energy providers are passing on the costs of trading in this market to ordinary consumers, hitting struggling businesses especially hard. Worse still, energy providers are compelled by government diktat to source a proportion of their energy from renewable sources, like wind farms, which are fabulously inefficient and are already dependent on government handouts to remain viable. Matthew Sinclair, an analyst with the London-based Taxpayers' Alliance, estimates that 14% of energy costs are directly attributable to climate change legislation. In recessionary times, this figure represents capital that could otherwise be spent stimulating private investment and household savings.

The situation looks set to only get worse. Earlier this year, details contained in the British government's deceptively titled Low Carbon Transition Plan revealed that ministers anticipate blackouts in Britain as early as 2017. With Britain's coal-fired power stations restricted in the number of hours they can run so as to comply with the European Union's draconian Large Combustible Plants directive, British consumers face an energy shortfall of 3000 megawatt-hours per year -- that's the equivalent of an area the size of Memphis being without power for a day. As a result, ministers are now conceding that Britain will be forced to import more of its energy supplies from volatile parts of the world, like Russia, thus threatening national security.

Thankfully, American consumers have launched an effective campaign to prevent a similar system being launched in the U.S. In response, UN bureaucrats and others have tried to smear ordinary Americans as part of an ugly campaign to terrify voters into backing a huge national energy tax. John Bruton, the EU Ambassador to the United States, vented his frustration when he told the Financial Times that the "the world cannot wait on the Senate's timetable." Michigan Senator Debbie Stebenow warned climate skeptics that Americans "... are paying the price in more hurricanes and tornadoes," while the Energy Secretary chided the nation last month when he compared the American public to teenage children.  "(They) aren't acting in a way that they should act," he said.

American consumers should look carefully at the impending crisis in Britain and its causes, as the Democrats in Washington seek to lead the nation down a similar path. The European Cap and Trade system is criminally wasteful, forcing hard-working taxpayers to fork over ever-increasing sums of cash in the name of unproven science. Unless Cap and Trade is defeated, American tax-payers will be throwing Tea Parties with the lights off.

Dan Whitfield is a British writer living in Arlington, Va.
If you experience technical problems, please write to helpdesk@americanthinker.com