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Can we have a real discussion about Cap & Trade?


BamaGrad03

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With what has amounted to 6-7 years of normal to below normal temperatures now that we have the benefit of revised data...And the mounds upon mounds of data that AT LEAST point to Global Warming as something that the jury is still out on...

Why impose a far reaching (and quite crippling) regressive tax on energy producers, that will ultimately hurt us all?

It doesn't make sense to me. But I'm willing to be receptive as to why we need it. It feels, to me, like the democrats are trying to placate the most fringe of liberals who are still trumpeting the global warming scare. And I think it's irresponsible to introduce legislation when every day climate data is indicating that Global Warming could be a concoction that doesn't live in reality.





With what has amounted to 6-7 years of normal to below normal temperatures now that we have the benefit of revised data...And the mounds upon mounds of data that AT LEAST point to Global Warming as something that the jury is still out on...

Why impose a far reaching (and quite crippling) regressive tax on energy producers, that will ultimately hurt us all?

It doesn't make sense to me. But I'm willing to be receptive as to why we need it. It feels, to me, like the democrats are trying to placate the most fringe of liberals who are still trumpeting the global warming scare. And I think it's irresponsible to introduce legislation when every day climate data is indicating that Global Warming could be a concoction that doesn't live in reality.

Okay, I'm not necessarily a proponent of it as a method to address the problem of pollution, but you state several broad, unsubstantiated assumptions:

Why impose a far reaching (and quite crippling) regressive tax on energy producers, that will ultimately hurt us all?

Support that view. If you can't, your position is no better than those you criticize who say it's great without making a convincing case.

As for me, my concern is less about global warming than it is concern over the air I and my children breathe, the water we drink, and the food we consume that has consumed environmental toxins.

Under cap and trade, industries that pollute less save money, and in fact, make money selling credits to more polluting industries that are still allowed to pollute and not forced out of business because they haven't modernize yet, but are still given an incentive to modernize. Industries that create less polluting equipment thrive, and employ more people. The environment is less polluted, whether one agrees with global warming or not, most reasonable people will see this as a good thing.

Carbon Dioxide is not a pollutant!

December 6, 2007

Beware of Cap and Trade Climate Bills

by Ben Lieberman

WebMemo #1723

America's Climate Security Act of 2007 (S. 2191), sponsored by Senators Joseph Lieberman (I-CT) and John Warner (R-VA), is the latest and fastest-moving "cap and trade" bill introduced in Congress this year. All such climate change measures warrant careful scrutiny, as they would likely increase energy costs and do considerably more economic harm than environmental good.

A Costly Proposition

These measures would set a limit, or cap, on carbon dioxide emissions from fossil fuel use. The effect of such a cap would be to impose rationing of coal, oil, and natural gas on the American economy. Each covered utility, oil company, and manufacturing facility would be given allowances based on past emissions or some other formula. Those companies that emit less carbon dioxide than permitted by their allowances could sell the excess to those that do not; this is the trade part of cap and trade. Over time, the cap would be ratcheted down, requiring greater cuts in emissions.

Each proposal differs from the others on specifics: the stringency of the cap, the number and type of companies covered, the ground rules for allocating and trading allowances, and other details. S. 2191 is, in several respects, more stringent than other cap and trade bills. Its requirement that emissions decline to 15 percent below 2005 levels by 2020--even in the face of a growing population and rising energy demand--sets a very difficult target.[1]

Measures like S. 2191 that target carbon emissions aggressively will be costlier than those that give the economy more time to adjust to the energy constraints. For example, over the long term, energy companies may find ways to capture and store carbon dioxide emissions underground, rather than emit them into the air, or switch to lower-emitting alternative energy sources as they are developed. But most experts see these advances as taking decades--much longer than the initial targets in S. 2191 allow. In fact, these targets may actually complicate the development of longer-term innovations, as they will divert resources to near-term fixes.

Carbon dioxide is the unavoidable byproduct of fossil fuel combustion, which currently provides 85 percent of America's energy. Thus, it will be very costly to move away from this preferred energy source, and especially doing so as expeditiously as S. 2191 requires. A study by Charles River Associates puts the cost (in terms of reduced household spending per year) of S. 2191 at $800 to $1,300 per household by 2015, rising to $1,500 to $2,500 by 2050.[2] Electricity prices could jump by 36 to 65 percent by 2015 and 80 to 125 percent by 2050.[3] No analysis has been done on the impact of S. 2191 on gasoline prices, but an Environmental Protection Agency study of a less stringent cap and trade bill estimates impacts of 26 cents per gallon by 2030 and 68 cents by 2050.[4]

Even these cost projections may underestimate the true costs, because they assume no unpleasant surprises. But the world has already witnessed many unpleasant surprises with Europe's ongoing efforts to impose a cap and trade program under the Kyoto Protocol, the international climate treaty to reduce greenhouse gas emissions.

In fact, European efforts have racked up significant costs while failing to reduce emissions.[5] Nearly every European country participating has higher emissions today than when the treaty was first signed in 1997. Further, despite ongoing criticism of the United States from Kyoto parties for failing to ratify the treaty, emissions in many of these nations are actually rising faster than in the United States.

The European experience also shows the problem of cap and trade fraud.[6] None other than Enron's Ken Lay was a strong supporter of carbon cap and trade when the idea was first floated in the 1990s, saying that it could "do more to promote Enron's business than almost any other regulatory initiative." These carbon allowances that will be bought and sold have a value estimated at $50 billion to $300 billion annually, and the trade in them would be a huge new business.[7] Enron may be gone, but others ready to take advantage of cap and trade--often at public expense--are not.

The actual cost of S. 2191 is difficult to estimate--as America has never had to deal with such severe energy constraints--but would likely be very high.

A Regressive Tax

By limiting the supply of fossil fuels, S. 2191 would raise the cost of energy. For consumers, cap and trade means more expensive gasoline and electricity as well as net job losses in energy-dependent sectors. Senator Lieberman himself concedes costs into the hundreds of billions of dollars. And as the Congressional Budget Office has noted, such energy cost increases act as a regressive tax on the poor.[8]

Lost Jobs

The net job losses from S. 2191 are estimated by Charles River Associates to be 1.2 million to 2.3 million by 2015.[9] Some of these jobs will be lost for good, due to the impact of higher energy costs on economic activity. Others, chiefly in the manufacturing sector, will be sent overseas. In the very likely event that S. 2191 significantly raises domestic manufacturing costs and that developing nations refuse to impose similar restrictions, the American economy could experience a substantial outsourcing of manufacturing jobs to those nations with lower energy costs.

Little Environmental Gain

While the costs of aggressive cap and trade proposals are substantial, the environmental benefits are suspect. This is true even if one fully accepts the claim of man-made global warming. The most ambitious measure to date is the Kyoto Protocol, but even if the U.S. were a party to this treaty and the European nations and other signatories were in full compliance (most are unlikely to meet their targets), the treaty would reduce the Earth's future temperature by an estimated 0.07 degrees Celsius by 2050--an amount too small even to verify.[10] S. 2191 would at best do only a little more.

Indeed, a number of economists, including many who are far from global warming skeptics, warn of overly aggressive cap and trade measures imposing costs exceeding the benefits.[11] In other words, the costs of implementing such measures would be higher than the value of the global warming damage that they would prevent.

The Slippery Slope

It is a near certainty that the first climate bill enacted will not be the last one. In fact, most major environmental organizations have already criticized S. 2191 and other pending global warming bills as inadequate, or as at best "a good first step." The economic impacts of S. 2191, though substantial in their own right, could be a mere down payment toward costlier subsequent measures.

Conclusion

Cap and trade bills are nothing short of a government re-engineering of the American economy. And S. 2191, with its aggressive targets to reduce emissions from fossil fuel use, would put the nation on a path of serious economic harm not justified by any benefits.

Ben Lieberman is Senior Policy Analyst for Energy and the Environment in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

Support that view. If you can't, your position is no better than those you criticize who say it's great without making a convincing case.

Fair question. From the Congressional Budget Office (slide 45):

http://www.cbo.gov/ftpdocs/99xx/doc9901/10...onWellesley.pdf

Costs from a 15 Percent Decrease in Carbon Emissions

Income Brackets( The first number is average dollar amount, the second is cost increase as a percentage of income.)

Lowest

680$, 3.3%

Second

880$, 2.9%

Middle

1,160$ ,2.8%

Fourth

1, 500$, 2.7%

Highest

2,180 $1.7%

If you'll notice, it's a tax on ALL Americans. And who does it hurt the most as percentage of income? The lowest income people. So not only is it a tax on all Americans, it's a regressive tax.

I'm not exactly AGAINST imposing limits on companies to clean our environment. But the fact that it's being shoved through in a time when we CAN'T afford more taxes, and businesses will most certainly ratchet down production in the coming years, and lay off people to account for new massive taxes...makes ZERO sense in this economic climate. They are willing for AMERICANS to sacrifice more, so they can get their policies enacted. If they want to do it, great. Do it when we at least recover a LITTLE BIT.

TT? Run? Arnold?

They are probably down at some Government office looking for where to pick up their $12,000 stimulus checks; I guess they forget their BlackBerry or iPhones to keep up with our discussion...

There will be many jobs on the Gulf Coast that will be lost due to this legislation. Any future work I would have been able to pick up may be lost. Congress is quizzing Geithner concerning this on CNBC.

Legislation will benefit 95% of working families. Well, I guess I'm not in that 95% because I'm unemployed and not receiving unemployment compensation. It's hard to buy a job right now. Tough market left by the Bush administration.

There will be many jobs on the Gulf Coast that will be lost due to this legisaltion. Any future work I would have been able to pick up may be lost. Congress is quizzing Geithner concerning this on CNBC.

Legislation will benefit 95% of working families. Well, I guess I'm not in that 95% because I'm unemployed and not receiving unemployment compensation. It's hard to buy a job right now. Tough market left by the Bush administration.

It ain't just Bush now. Did you include Barney Frank and Chris Dodd as part of the Bush administration?

There will be many jobs on the Gulf Coast that will be lost due to this legisaltion. Any future work I would have been able to pick up may be lost. Congress is quizzing Geithner concerning this on CNBC.

Legislation will benefit 95% of working families. Well, I guess I'm not in that 95% because I'm unemployed and not receiving unemployment compensation. It's hard to buy a job right now. Tough market left by the Bush administration.

… and the last Congress. I'm so glad he's gone. And that Obama and friends are here to save the day. :rolleyes: Same Congress, though, with larger majorities this go round.

THE EMPLOYMENT SITUATION: JANUARY 2009

Nonfarm payroll employment fell sharply in January (-598,000) and the unem-

ployment rate rose from 7.2 to 7.6 percent, the Bureau of Labor Statistics of

the U.S. Department of Labor reported today. Payroll employment has declined

by 3.6 million since the start of the recession in December 2007; about one-

half of this decline occurred in the past 3 months. In January, job losses

were large and widespread across nearly all major industry sectors.

Unemployment (Household Survey Data)

Both the number of unemployed persons (11.6 million) and the unemployment

rate (7.6 percent) rose in January. Over the past 12 months, the number of un-

employed persons has increased by 4.1 million and the unemployment rate has

risen by 2.7 percentage points.

source: http://www.bls.gov/news.release/empsit.nr0.htm

The Bad Side: The Obama White House admits that cap and trade policies will increase energy costs for Americans.

The Good Side(?): The Obama White House admits cap and trade policies will give government more money to blow. That's important.

White House Budget Director Peter Orszag was on This Week with George Stephanopoulos.

During his interview Orszag admitted that Obama's proposed cap and trade energy legislation will increase energy costs for everyone:

In September Orszag told Congress the cap and trade policies would create additional revenue for government:

The Post cited testimony to Congress in September by Peter Orszag, currently Obama's budget director, estimating that revenue from a cap-and-trade scheme could reach 112 billion dollars by 2012.

According to Orszag, who at the time was director of the Congressional Budget Office, the program -- which would force companies to buy permits if they exceed pollution emission limits -- could generate between 50 and 300 billion dollars a year by 2020.

The two on "This Week" did not discuss the historic deficit the Obama Administration has racked up already this year. Orszag and Obama are betting that their massive and historic spending will lift the US out of its recession.

link

Former Energy Secretaries: Cap and Trade Is Bad for Business

Both James Edwards, who was Secretary of Energy under President Reagan from 1981 to 1982 and John Herrington, Secretary of Energy under Reagan from 1985 to 1989, said a cap-and-trade system won’t work, will raise costs for consumers, and hurt business.

link

Gov. Arnold Schwarzenegger was all smiles in 2006 when he signed into

law the toughest anti-global-warming regulations of any state. Mr.

Schwarzenegger and his green supporters boasted that the regulations

would steer California into a prosperous era of green jobs, renewable

energy, and technological leadership. Instead, since 2007 -- in

anticipation of the new mandates -- California has led the nation in job

losses.

The regulations created a cap-and-trade system, similar to proposed

federal global-warming measures, by limiting the CO2 that utilities,

trucking companies and other businesses can emit, and imposed steep new

taxes on companies that exceed the caps. Since energy is an input in

everything that's produced, this will raise the cost of production

inside California's borders.

link

Which state has been hit with massive unemployment and is at the verge of bankruptcy? Which state is losing business to neighboring states because of this "green initiative"?

What it all boils down to is the green lobby the green democrats don't care about your jobs and they don't care about energy cost to you and your family. They have their agenda to "save the world", you and yours are expendable.

If you guys don't care to defend Cap & Trade, can you offer a criticism? At least let us know where you stand.

BG, you assume that the "liberals" here feel as passionately for something as you are against it. I've told you where I stand. I don't feel strongly about it one way or the other. I doubt it is the disaster you predict nor a panacea.

If you guys don't care to defend Cap & Trade, can you offer a criticism? At least let us know where you stand.

BG, you assume that the "liberals" here feel as passionately for something as you are against it. I've told you where I stand. I don't feel strongly about it one way or the other. I doubt it is the disaster you predict nor a panacea.

Nor will it be as benign as you are hoping.

If you guys don't care to defend Cap & Trade, can you offer a criticism? At least let us know where you stand.

BG, you assume that the "liberals" here feel as passionately for something as you are against it. I've told you where I stand. I don't feel strongly about it one way or the other. I doubt it is the disaster you predict nor a panacea.

Yeah, you weighed in and I appreciate your response. I was really curious about the others on the board. Those who have yet to offer a single criticism of the big O.

And as far as predictions, the numbers I posted weren't my predictions, they were Obama's.

If you guys don't care to defend Cap & Trade, can you offer a criticism? At least let us know where you stand.

BG, you assume that the "liberals" here feel as passionately for something as you are against it. I've told you where I stand. I don't feel strongly about it one way or the other. I doubt it is the disaster you predict nor a panacea.

Yeah, you weighed in and I appreciate your response. I was really curious about the others on the board. Those who have yet to offer a single criticism of the big O.

And as far as predictions, the numbers I posted weren't my predictions, they were Obama's.

It is immoral to criticize The One. He is never wrong. His motives and as pure as the driven snow. Continue to criticize him at your own peril.

Shun the nonbeliever! Shun!

The Bad Side: The Obama White House admits that cap and trade policies will increase energy costs for Americans.

The Good Side(?): The Obama White House admits cap and trade policies will give government more money to blow. That's important.

White House Budget Director Peter Orszag was on This Week with George Stephanopoulos.

During his interview Orszag admitted that Obama's proposed cap and trade energy legislation will increase energy costs for everyone:

In September Orszag told Congress the cap and trade policies would create additional revenue for government:

The Post cited testimony to Congress in September by Peter Orszag, currently Obama's budget director, estimating that revenue from a cap-and-trade scheme could reach 112 billion dollars by 2012.

According to Orszag, who at the time was director of the Congressional Budget Office, the program -- which would force companies to buy permits if they exceed pollution emission limits -- could generate between 50 and 300 billion dollars a year by 2020.

The two on "This Week" did not discuss the historic deficit the Obama Administration has racked up already this year. Orszag and Obama are betting that their massive and historic spending will lift the US out of its recession.

link

Former Energy Secretaries: Cap and Trade Is Bad for Business

Both James Edwards, who was Secretary of Energy under President Reagan from 1981 to 1982 and John Herrington, Secretary of Energy under Reagan from 1985 to 1989, said a cap-and-trade system won’t work, will raise costs for consumers, and hurt business.

link

Gov. Arnold Schwarzenegger was all smiles in 2006 when he signed into

law the toughest anti-global-warming regulations of any state. Mr.

Schwarzenegger and his green supporters boasted that the regulations

would steer California into a prosperous era of green jobs, renewable

energy, and technological leadership. Instead, since 2007 -- in

anticipation of the new mandates -- California has led the nation in job

losses.

The regulations created a cap-and-trade system, similar to proposed

federal global-warming measures, by limiting the CO2 that utilities,

trucking companies and other businesses can emit, and imposed steep new

taxes on companies that exceed the caps. Since energy is an input in

everything that's produced, this will raise the cost of production

inside California's borders.

link

Which state has been hit with massive unemployment and is at the verge of bankruptcy? Which state is losing business to neighboring states because of this "green initiative"?

What it all boils down to is the green lobby the green democrats don't care about your jobs and they don't care about energy cost to you and your family. They have their agenda to "save the world", you and yours are expendable.

No where in the article does it provide support for California's evironmental plan is the reason for California's high unemplayment rate.

As far as Cap and Trade is concerned, hell let's just go back to leaded gasoline while were at it.

We need to bring DDT back as well, these darn mosquitos are taking over.

We need to bring DDT back as well, these darn mosquitos are taking over.

While Rachel Carson followers still disagree, WHO agrees with your tongue-in-cheek statement.

WHO backs DDT for malaria control

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