Cap and Trade

With the passage by the U.S. House of Representatives of HR 2454, the Cap and Trade bill, I thought I would jump into the fray.

There is no question that this is a monumental tax increase by the federal government. The Congressional Budget Office, the most often quoted "independent" analysis of Congressional Legislation estimates that this will cost Americans $845 from 2010 to 2019. (http://www.cbo.gov/ftpdocs/102xx/doc10262/hr2454.pdf)

CBO acknowledges that these costs will be passed on to consumers:
"As noted, firms would generally pass the cost of reducing their emissions—or of acquiring offset credits or emission allowances—on to their customers, and their customers’ customers. (Indeed, assuming that higher costs are passed into prices is customary in distributional analyses.) Households and governments would bear those costs through their consumption of goods and services. Because households account for the bulk of spending, they would bear most of the costs." (same source)

These costs do not include the costs that are likely as a result in reduced GDP over that time, and acknowledged by CBO in a footnote to the same report:
"The resource cost does not indicate the potential decrease in gross domestic product (GDP) that could result from the cap. The reduction in GDP would also include indirect general equilibrium effects, such as changes in the labor supply resulting from reductions in real wages and potential reductions in the productivity of capital and labor."

I have found very little information about what this additional tax will result in from a Climate Change perspective. What I have found is that the change resulting will have an insignificant impact on reversing any global warming that may be occurring. I am struck with the thought that maybe this is just using a current hot button issue to raise more federal revenue.

Welcome your thoughts.