Cap-And-Trade: Bridge to Economic Disaster?

Outgoing Alaska Gov. Sarah Palin called President Obama's approval of cap-and-trade legislation to counter global warming "an enormous threat to our economy" in a Washington Post op-ed piece Tuesday morning.

AP Sarah Palin

Stephen Moore of The Wall Street Journal agrees with Palin, calling the program the "India and China Redevelopment Act" because all of the related jobs in the United States are going to move there.

Moore also referred to the legislation as a "war against the Midwest" because many Midwestern states rely heavily on coal for utilities, and utility rates are bound to increase in those states.

"This just destroys a lot of jobs," Moore said. "Those Midwestern states get creamed under this bill ... States like Illinois, West Virginia, Ohio, Michigan depend heavily upon coal for utilities and utility rates are going to go way up."

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According to Moore, if Democrats really wanted to find a solution to the global warming problem in a way that does not destroy jobs, they would tax carbon and use the money saved from not capping carbon to reduce taxes on capital.

Conversely, former Vermont Governor and CNBC contributor Howard Dean believes the cap-and-trade legislation is a positive way to deal with the environment and healthcare costs.

"I believe that for the $40 a year that the lowest income people pay in extra taxes or extra energy costs, they will more than recoup that having their kids spend less time in the emergency rooms because of asthma attacks," Dean said. "This is a problem we have to deal with and I think the President has done the right thing."

Dean said that while he never has been a huge fan of cap-and-trade programs, it is necessary to implement it now so that India, China and Brazil become a part of the Copenhagen Treaty.

"It costs a lot less to take carbon out of the air in the United States and Europe than it does in developing countries, particularly poor countries," Dean said. "So what cap-and-trade really does is [act as] an international mechanism to make it easier to reduce the CO load and still make it possible to develop countries."

Palin instead suggests constructing a pipeline to draw Alaska's ample supply of natural gas.

Congress is deliberating the cap-and-trade program this week.