29 Jun 2007 Climate Change is a Human Issue
Yesterday, National Center Senior Fellow Thomas J. Borelli, Ph.D., testified on behalf of the Free Enterprise Action Fund before the U.S Senate Committee on Environment and Public Works hearing entitled, “Examining Global Warming Issues in the Power Plant Sector.”
In his testimony, Tom stressed that CEOs who succumb to, or attempt to capitalize on, the political flavor-of-the-day risk harming their company’s long-term profitability.
As Tom pointed out:
All too often, today’s CEOs make decisions based on appeasing social and political pressure or by trying to generate revenue through legislation that favor their company. In our view, these strategies are shortsighted because they stymie competition, innovation and jeopardize future earnings.
For these very reasons, we strongly oppose cap and trade legislation and company participation in the United States Climate Action Partnership (USCAP). Accordingly, we are in opposition to legislation that sets carbon dioxide limits and allocations for the utility industry.
While the science implicating human activity on global warming is uncertain and speculative, the economic costs of cap and trade legislation are certain and severe. We are deeply concerned about the affect of cap and trade on both the U.S. economy and on the future profitability of the companies in our portfolio – including PG&E and Duke Energy.
Borelli also discussed the specific CEOs, including Caterpillar, Inc.’s James Owens:
Caterpillar’s CEO James Owens admitted he did not conduct a cost-benefit analysis of cap and trade before deciding to join USCAP. In addition, he was not aware of the CBO study that found cap and trade regulations would hurt his coal industry customers.
This CEO survey illustrates a complete ignorance about the consequences of global warming regulations on the economy and their businesses.
Caterpillar’s participation in USCAP is a perfect illustration of CEO incompetence and deception surrounding cap and trade legislation. Caterpillar’s future profit depends on a growing economy and growth in the energy and mining industries. In fact, according to its 10-K filing with the Security and Exchange Commission (SEC), it cites a decline in the economic growth and a decline in the mining industry as a key risk to its business.
Yet inexplicably, Mr. Owens is a member of USCAP, which supports cap and trade regulations that are going to harm the economy and the coal business – a key customer for Caterpillar products. Astonishingly, CEO Owens is lobbying against his own earnings!
Not only is Owens harming his company, he is keeping his shareholders in the dark. Nowhere does Caterpillar disclose to its shareholders that its support of cap and trade can potentially lead to a decline in its business.
Also testifying at yesterday’s hearing was Competitive Enterprise Institute Senior Fellow Marlo Lewis, Ph.D., who noted that “regulatory strategies like the Kyoto Protocol… are all economic pain for no environmental gain.” Dr. Lewis explained:
Based on favorable scientific assumptions, the Kyoto treaty would avert only 0.07 degrees Celsius of global warming by 2050. That’s too small an amount for scientists to detect. Put somewhat differently, Kyoto would postpone the arrival of a 2.6 degrees Celsius warming by five years – from 2095 to 2100…
Similarly, Kyoto would avert only one centimeter of sea-level rise by 2050 and 2.5 centimeters by 2100. It would have no measurable effect on hurricane strength, even if global warming makes hurricanes stronger, and none on malaria-related mortality, even if global warming increases the population risk of exposure to malaria.
However, although Kyoto would provide no discernable climate protection, it would cost the U.S. economy tens to hundreds of billions of dollars in higher energy prices, lost jobs, and lower GDP.
Robert Murray, President and CEO of Murray Energy Corporation, pointed out in his testimonyyesterday that “climate change is a human issue,” and brought home the harsh reality of inhumane global warming policies, including those that would restrict carbon dioxide emissions:
It seems to us that the leadership of this Congress, with the support of the Majority of this Committee and some Republicans, are intent on helping Mr. Gore and those of his ilk in achieving his unquestionable legacy, which will be the destruction of American lives and more death as a result of his hysterical global goofiness, with no environmental benefit…
We do not know how many members of Congress, and particularly the Democrat Majority, have actually ever created a job for anyone. I have created 3,300 primary jobs and up to 36,000 secondary ones, according to the Pennsylvania State University, from a mortgaged home, and I can tell you that it is virtually impossible to do so today in our great country due to difficulties imposed by our own government at every turn…
Some wealthy elitists in our country and many in our Congressional leadership, particularly from California and New England, and in the entertainment industry, including Mr. Gore, who cannot tell fact from fiction, have demonstrated an Olympian detachment from the impacts of draconian climate change policy. For them, the jobs and dreams destroyed as a result will be nothing more than the statistics and cares of other people. The consequences are abstractions to them. But, they are not to me, as I can name many of the thousands of American citizens whose lives will be destroyed by these elitists’ ill-conceived “global goofiness” campaigns.
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