Cap and Trade debate
OK, so we’re no sooner finishing Obama’s reform of the housing, banking, and automakers industries, than we’re apparently ready to do the same to the energy industry. Now, as with the other situati0ns, you’ve got two very different prevailing thoughts going apparently. On one side, is the keep it simple philosophy. In the other debates, basically their argument ( I’m on this side ), was that what had worked for 200 years seemed to be a good indication it would still work. Let the bad business models fail so that the good business models could thrive. We didn’t get that in any of the previous situations. Then there is the FUBAR line of thought that anything simple MUST not be working. Until it’s so complicated no one can understand it, it needs adjusting. Welcome to the energy debate.
A few years ago Al Gore and others proposed something called “cap and trade”. Or, “carbon credits“. California immediately jumped on the bandwagon. This rather repressive legislation helped spur the move of several businesses out of California. However, most states did not pass this type of legislation. So, Henry Waxman decided what was good for California was good for the rest of the country. This, now 946 page bill, is the culmination of Al Gore and the greens drive to eliminate the planet of greenhouse gases so that our climate will continue to do what it’s been doing the last couple of years, cool down.
Now, I’ve heard all kinds of nightmare stories over the cost of this bill. A lot of debate has been over a figure of $3,100. Greens say it’s a lie:
“If Boehner and McConnell had simply misstated the results of the MIT study, the Truth-O-Meter would have been content giving this one a False. But for them to keep repeating the claim after the author of the study told them it was wrong means we have to set the meter ablaze. Pants on Fire.”
Well, we’ll see what happens. Some folks just don’t care how hot it gets.
Of course, it’s always quantified with the “if you doubt me, you’ll die in hell” disclaimer. So, according to these peeps, the Republicans ( and per norm, ONLY the Republicans ), are lieing when they say it will cost at least $3,100 per family. However, a lot of other peeps are saying these figures are reasonable, if not low:
The Utah Farm Bureau reported if the state adopted greenhouse gas emission regulations similar to the stringent ones in California, it would cost the state billions of dollars in household incomes, eliminate thousands of jobs and restrict Utah’s competitiveness with other states, the Western Business Roundtable said Monday in a news release.
…..But the costs go well beyond consumers. The higher energy costs also kill economic activity and jobs. This is particularly true of manufacturing jobs. Earlier Heritage Foundation analyses of proposals comparable to Waxman-Markey have estimated up to 3 million lost manufacturing jobs. Some of those jobs will be destroyed entirely, while others will be outsourced to China and other developing nations, nearly all of which have stated that they will never constrain their own economic development by imposing energy price-raising global warming measures on themselves.
The adverse impacts are substantial. The Heritage Foundation estimated cumulative gross domestic product losses from last year’s less stringent Senate Lieberman-Warner bill at $1.7 trillion to $4.8 trillion by 2030. But it is important to add that the burden is not evenly spread throughout the nation. Some parts of the country rely more than others on coal for electricity, which is the most heavily targeted energy source under Waxman-Markey. And some parts of the country still manufacture things and other parts no longer do so, so the job losses from Waxman-Markey would burden some states and districts more than others.
And, in a piece that tries to be objective and present the cons of both sides:
• Due to lower industrial output as a result of higher energy prices, the costs of complying with required emissions cuts, and greater competition from overseas manufacturers with lower energy costs, Kentucky would lose as many as 23,000 jobs in 2020 and nearly 50,000 jobs in 2030.
• Disposable household income would be reduced by as much as $2,500 per year in 2020 and up to $6,000 by 2030.
• The price of gasoline in Kentucky would increase between 74 percent and 144 percent in 2030. Electricity prices would increase by between 122 percent and 159 percent. Kentucky residents would pay between 99 percent and 142 percent more for their natural gas by 2030.
All of Kentucky’s largest manufacturing sectors would experience output losses.
Kentucky’s 1,865 schools and universities and 134 hospitals will likely experience an increase of up to 35 percent in expenditures by 2020 and as much as 123 percent by 2030.
Chemical makers, second only to the producers of transportation equipment among Kentucky’s leading manufacturing sectors, say the mandates proposed by President Obama would push U.S. jobs and investment offshore.
In recent testimony before a House Energy and Commerce Committee panel, Paul Cicio, president of the Industrial Energy Consumers of America (IECA) argued that mandatory cap-and-trade would unfairly target U.S. manufacturers. “The industrial sector is not the problem,” he said. “In the U.S., the industrial sector’s (carbon) emissions have risen only 2.6 percent above 1990 levels while emissions from the residential sector are up 29 percent, commercial up 39 percent, transportation up 27 percent and electricity generation up 29 percent.”
Cicio asserted that “under cap-and-trade, the industrial sector pays twice — through the additional cost of carbon embedded in energy purchases and through the higher cost of natural gas and electricity.”
Then of course, there’s alternatives. This is what the picture might look like according to The Heritage Foundation:
Red states get hammered, no one will want to live there. Whitish states get rewarded. Now, one of the problems I have is Vermont would likely get rewarded. They don’t burn any coal at all. The reason they don’t burn any coal is because they import it all. They do however, supplement what they import by burning trees. Burning trees is OK, burning coal is awful.
Then there’s places like DC. Yet another rewarding place to be. They get some of their energy from Allegheny Energy. Allegheny will quickly inform you they are 95% coal. So why do these states get a pass?
The consensus with those against this Cap and Trade scheme is it will cost the average consumer $3,100. Now, gotta remember, that’s AVERAGE. This thing is designed to punish those in states producing coal and reward those living in states that don’t. So, you could be double that in Kentucky and Utah, and of course see no rate hike in places that use the coal like DC and Maryland.
Most economists I have looked at feel the expenses will go way beyond the initial cost to consumers. None of tried to argue this is economically cost neutral, or even close. What they are saying is we HAVE to do it because the world will boil if we don’t. Only problem is I haven’t seen much of an increase in temps since I was born. If you go back farther, and not that much farther where I live, it was actually much hotter for a long time ( 1860′s thru 1930′s or so ). Things cooled down for a while and people decided the next ice age was on the way in the 1970′s and 80′s. Then Al Gore bought a bunch of stock in global warming companies and decided we all needed to use his products whether we wanted to or not, or destroy the planet if we refused. Now, Henry Waxman has decided we don’t even get the choice. He’s going to fix the planet by cap and trade schemes.
Now, would someone please tell me how cap and trade actually reduces carbon output? Fact is, it doesn’t. It’s a tax. By making coal energy repressively expensive, the argument is people will switch to other means of electricity like solar, wind, hydro, nuclear, or something. We don’t have tons of acreage to get any solar worth anything, wind is not an option here, they would most likely be destroyed every spring. Try getting the environmentalists to let you build one more dam in this country. Nuclear I like. However, environmentalists love nothing more than to sue anyone trying to build one. I say build them and let the environmentalists move to France. But, it takes a long time to get a nuke going. Until then, we have to eat. People need to contact their legislators, especially in the Senate where California can’t dominate like they do in the House. If your state is red, you better be worried. You better be letting your Senators know you’re worried. I truly am.
Then of course, we could burn wood and make Henry Waxman, Nancy Pelosi, and Obama happy.