The Heritage Hustle

Whenever Americans organize for progressive causes, there is the Heritage Foundation … blocking the way. Heritage has been instrumental in holding back progress on many issues of particular concern to people with Mesothelioma and other asbestos-related diseases, such as workplace safety, health care reform, and preserving our Seventh Amendment rights to seek justice in courts.

Now the Heritage Foundation is leading the charge against a clean energy bill. It’s instructive to understand how they are doing this.

The Heritage Foundation was founded in 1979. According to SourceWatch, “Its initial funding was provided by Joseph Coors, of the Coors beer empire, and Richard Mellon Scaife, heir of the Mellon industrial and banking fortune.” As I wrote in the series “The Truth About Health Care and Tort Reform,” the Scaife and Coors foundations are part of a small group of wealthy family foundations that fund a network of “think tanks” and other organizations that work in concert to influence public opinion.

One way these groups influence opinion is by generating and releasing highly misleading data that is sent to news media and repeated by conservative politicians.

The energy bill passed by the House last week is called the American Clean Energy and Security Act. It is a sweeping program designed to reduce greenhouse gases and create cleaner, non-fossil-fuel sources of energy. Among its many provisions are incentives for energy efficiency, investment in new technology, and a cap-and-trade program.

Very simply, cap-and-trade refers to a plan by which companies will have a limit, or cap, on the amount of greenhouse gases they can emit. To enforce this, companies will be required to purchase emission permits. This cap will gradually become more restrictive. Companies that reduce their emissions below what they are allowed can “trade” emission credits to companies that are over the “cap” allowance.

To fight passage of this Act, the Heritage Foundation has released data that claims the bill amounts to a “massive energy tax in disguise,” a charge repeated in the Wall Street Journal and on Fox News. The Heritage Foundation claims the bill would reduce gross domestic product (GDP) by $7.4 trillion, destroy 844,000 jobs a year on average, raise electricity rates by 90 percent and gas prices by 74 percent. Further, Heritage says, the bill will raise an average family’s annual energy bill by $1,500 and increase inflation-adjusted federal debt by 29 percent, or $33,400 additional federal debt per person.

Golly, that sounds awful. But Thomas Noyes, a self-described “finance geek,” explains in “The Price of Climate Change” how Heritage arrived at these numbers.

“They have overstated the costs of renewable energy, underestimated the future costs of fossil fuels and left out the cost savings of improving energy efficiency. The Heritage Foundation report projects home energy prices will increase three to four times faster than the Congressional Budget Office or Environmental Protection Agency studies, and doesn’t include any benefits from improvements in energy efficiency or investing in new industries.”

Heritage claims it came by some of its numbers from a Massachusetts Institute of Technology study. In April one of the authors of the MIT study protested loudly that Heritage was grossly misrepresenting the MIT study. “It’s just wrong,” he said. “It’s wrong in so many ways it’s hard to begin.” Yet Heritage, and the politicians it feeds “data” to, continue to use the warped numbers.

Unfortunately, Heritage’s nutty numbers are treated respectfully in news media, where they are repeated without analysis of how Heritage came by its “data.”

Cost numbers from the Congressional Budget Office are much less alarming:

“[T]he net annual economywide cost of the cap-and-trade program in 2020 would be $22 billion—or about $175 per household. That figure includes the cost of restructuring the production and use of energy and of payments made to foreign entities under the program, but it does not include the economic benefits and other benefits of the reduction in GHG emissions and the associated slowing of climate change. CBO could not determine the incidence of certain pieces (including both costs and benefits) that represent, on net, about 8 percent of the total. For the remaining portion of the net cost, households in the lowest income quintile would see an average net benefit of about $40 in 2020, while households in the highest income quintile would see a net cost of $245.”

Meanwhile, the real MIT has good things to say about cap-and-trade programs.

The energy bill is complex, and certainly people of good will might disagree with many of its provisions. But it would be nice if the American people could be presented unbiased information instead of propaganda for a change.

Barbara O’Brien
July 2, 2009

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