Washington, D.C. – U.S. Senator Mike Enzi, R-Wyo., told a hearing room of his colleagues today that the complex implementation of a cap and tax scheme to reduce carbon emissions resembles a Ponzi scheme and needs significant examination before the Senate considers such legislation.

“The way I understand it, under the cap and tax concept, businesses will buy carbon allowances in proportion to their carbon emissions. The companies will then pass that extra cost on to the customers, who we guess will use less because the price is higher. Then the money made by the federal government off the allowances purchased by the businesses will be distributed back to the customers in the hopes they don’t revolt over the increase in prices. Now that is starting to sound like a Ponzi scheme to me,” said Enzi.    

Enzi attended a Finance Committee hearing today, “Auctioning under Cap and Trade: Design, Participation and Distribution of Revenues,” to evaluate the carbon emission control programs that are being debated in the Senate.  Witnesses from the Treasury Department, the Congressional Budget Office and the European Commission addressed the members. During his time to address the panel of witnesses Enzi raised questions about the transparency and success rate of a cap and tax process.          

“I thought our purpose was to reduce carbon emissions but the more I learn about the cap and tax scheme the more it appears that the concept is geared to raise money so Washington can spend more.”

The President’s detailed budget, which was released earlier today, proposes a cap and tax system.