so, cap and trade… is it a good thing or not?

I do think it a good thing to reduce pollutants in the air – and whether you believe in manmade climate change or not, I imagine you would agree. I also think the US needs to stop spending $200,000 per minute on foreign oil, and would love to see alternative methods developed and utilized.

The question seems to be whether Cap and Trade is the best method to achieve these goals. (And, how can Congress even make that decision, and vote on the bill when they haven’t read it? Heck, even Carol Browner, Obama’s Energy Czar, hasn’t read it….)

In theory, supporters of Obama, Hillary Clinton and John McCain shouldn’t be all that opposed to the Cap and Trade bill since all three candidates supported Cap and Trade during the primary. I don’t know if the proposals put forth by Clinton and McCain were similar to Obama’s, since, like Congress, I haven’t read the new bill.

Hillary Clinton and John McCain both supported cap and trade during the primary.

“Under Clinton’s cap-and-trade plan, 100 per cent of carbon credits would be auctioned to polluting companies, with the proceeds going towards new technology investments and a program to help low-income families heat and cool their homes.

She also announced plans to increase investments in energy efficiency and cleantech R&D, set targets for a quarter of US electricity to come from renewables by 2025, and introduce legislation demanding all listed firms report on climate change risks.”

My biggest concern regarding this bill is the argument that it will kill jobs. Obama flat out told his supporters before the election that he would cause their electric bills to skyrocket, so I assume this must not be a concern, at least for the 69 Million who voted for him. But, losing jobs is a major concern, especially now.

Obama – Energy Prices Will Skyrocket

The President’s Budget Director, Peter Orszag, added: “firms would not ultimately bear most of the costs of the [carbon] allowances but instead would pass them along to their customers in the form of higher prices….price increases would be essential to the success of a cap-and-trade program.”

If The Heritage Foundation’s numbers are correct, electricity bills will go up 90%, gasoline will go up 85%, and natural gas will go up 55%.

Without international participation, jobs and emissions will simply shift overseas to countries that require few, if any, environmental protections, harming the global environment as well as the U.S. economy. The jobs and industries that will bear the greatest costs of cap-and-tax are the industries we must keep in America in order to remain a power on the world stage. Quite simply, cap-and-trade caps our growth and trades our jobs.

Does cap and trade lose or create jobs?

Proponents of the Cap and Trade bill claim that it will not cause job loss, just a job shift into green jobs.

“Such a law would impact how much people pay to heat, cool and light their homes (it would cost more); what automobiles they buy and drive (smaller, fuel efficient and hybrid electric); and where they will work (more “green” jobs, meaning more environmentally friendly ones).

Critics of the House bill brand it a “jobs killer.” Yet it would seem more likely to shift jobs. Old, energy-intensive industries and businesses might scale back or disappear. Those green jobs would emerge, propelled by the push for nonpolluting energy sources.”

PBS had a debate about Cap and Trade, the transcript is here.

Link to story.

Cap and trade programs are defined by the US EPA as “an environmental policy tool that delivers results with a mandatory cap on emissions while providing sources flexibility in how they comply. Successful cap and trade programs reward innovation, efficiency, and early action and provide strict environmental accountability without inhibiting economic growth”.

“In a cap and trade system for emissions, the government sets a limit to the permissible amount of emissions. This limit is known as a cap, is flexible and is expected to be lowered with time. Depending on the particular system implemented, companies that pollute and cause those emissions can either buy emissions allowances or credits or are given them by the government. The companies can then trade those emissions credits against their emissions or pollution. The choice is then with the company to either trade all their credits and continue polluting at their current level or to implement new procedures and equipment to reduce their emissions. If they reduce their emissions, they don’t need all their emissions credits and can then on sell them to other companies. In this way reducing emissions becomes more financially prudent for the company than to continue polluting.”

The US EPA says that cap and trade systems are best used where:

• Emissions have longer residence times
• The environmental and/or public health concern has broad geographic impacts
• A significant number of sources are responsible for the problem
• The cost of controls varies from source to source
• Emissions can be consistently and accurately measured
• Strong regulatory institutions and financial markets exist

Some pros and cons from AzoCleantech.com:

Pros
• Shinking emissions caps guarantee that specified emissions reductions targets will be met
• Can produce revenue that can be used to help others to reduce their emissions, enhance the exisiting program or bring about faster emissions reductions.
• Encourages rapid adoption of cheap and efficient means for bringing about the largest emissions reductions.
• Increases the value of using new, cleaner companies and technologies rather than maintaining use of historic polluters
• Cap and trade systems have been extensively used in the past and have proved successful

Cons
• Prices of emissions credits can be volatile with large price swings.
• Systems can become complex and cumbersome with large amounts of compliance administration
• Cap and trade systems are best implemented at a regional or national level
• Polluters can be rewarded for past polluting while new, clean technologies don’t get such a windfall

Read here for Differences between Cap and Trade and Carbon taxes, outlined by the Sideline Institute.

From The New Ledger – The Great Climate Tax:

“The proposed carbon mandates under consideration would mean that the United States could not emit more in the year 2050 than we emitted in 1910. This is a daunting task considering that in 1910 the United States had only 92 million people, compared to an estimated 420 million in 2050. The only nations in the world today that emit at the proposed levels are struggling nations, such as Belize, Jordan, Haiti, and Somalia. In order to reach the 80 percent reduction required by cap-and-tax, emissions from the transportation sector would have to drop to zero, as would those from ALL electricity generation, and we would still need to reduce all other sources of greenhouse gas emissions by 50 percent.

The costs for such misguided policies are staggering. The Congressional Budget Office (CBO) recently determined that rolling back the clock to reach 1910 emissions levels would cost $864 billion, while some estimates put the number closer to $1.5 trillion, and it will be America’s working families left holding the tab.”

The biggest screw this bill gives to the American people is the massive tax hike. A tax hike that Obama promised wouldn’t happen.

This one cracks me up:

“He’s a tax and spend liberal Democrat… ha ha ha … they say that every time. That ol’ McCain, what a crazy coot. I’m not going to raise your taxes! I’m not a tax and spender. Read my lips…”

So, when I hear something like this, I don’t really believe it, do you?

President Obama called on senators to disregard what he called the “misinformation” offered by critics of his energy bill, which passed the House of Representatives late Friday night despite GOP predictions that it will further damage the economy.

“We must not be prisoners of the past,” he said in his radio and Internet address. “Don’t believe the misinformation out there that suggests there is somehow a contradiction between investing in clean energy and economic growth. It’s just not true.”

“Don’t believe those crazy detractors, all that misinformation. They’re just a bunch of crazy coots!”

Warren Buffet – Cap and Trade is a Huge Tax

Rep. Dingell (D-MI) – Cap and Trade is a Big Tax

Michigan Rep. John Dingell recently said of cap-and-trade, “Nobody in this country realizes that cap and trade is a tax, and it’s a great big one…”

And Sen. Sherrod Brown said, “It really does say to manufacturing, ‘Go to China, where they have weaker environmental standards.’ And that’s a very bad message in bad economic times — in any economic times.”

Cap and Trade – What is it? (PRO)

Cap and Trade versus Carbon Tax (CON)

So, where do you stand on Cap and Trade?