Filed under: Capitalism, Economy, Energy, Taxes | Tags: Cap-and-Trade, Collectivism, Harry Reid's Energy Bill
Harry Reid announced yesterday an energy bill without a cap-and-trade provision. This would be a most helpful outcome for America, for cap-and-trade would be devastating to the economy. However, it is a matter of Democrats not having the votes, rather than an enlightened change of heart.
This is the time to remember what Ronald Reagan said : “Trust, but verify.” On second thought, turn that around a little — Don’t trust and eternal vigilance. These are Democrats, after all, who really like the idea of cap-and-trade. We just saw what happened when the Appeals Court looked at Obama’s Gulf moratorium— that was supposed to be dead too. According to Heritage Foundation research, a cap-and-trade policy could cost the American economy $9.4 trillion in reduced economic activity between 2012 and 2035.
Nothing seems to go away permanently in Washington. There is a very real present danger of energy legislation that would have the same effect. Congress is considering raising the cap on liability for oil companies from $75 million well into the billions. That might well shut down the oil and gas industries.
The response to that is usually “Let’s Give Renewables a Chance.” Wind and solar are subsidized around 100 times the subsidy that oil and gas receive per unit of energy produced. [According to the Energy Information Administration: $23.40 per MwH for wind; $24.50 for solar; $0.25 for oil and gas; while coal gets $0.44; nukes about $1.60 and hydroelectric $0.60]. Renewables are NOT competing. They have been protected for years; subsidizing them costs the economy a bundle, and pretending that it will all be wonderful as soon as there is that breakthrough, or the new invention, or we just give them a bigger subsidy, as long as we just keep hoping.
This is the totalitarian impulse. The White House wants a clean, green economy. They believe that everything will be better when America is not afflicted with dirty, polluting hydrocarbons. People should travel by high-speed trains between cities and within cities, ride bicycles or walk. Cities should not sprawl. Cars should be electric and non-polluting. A clean, green economy will provide all sorts of high-paying jobs for the less-fortunate in society. An ill-informed public does not appreciate the promise of this vision, and is not willing to make small sacrifices to make it a reality. Therefore hydrocarbons should be shut down or made so expensive that the clean, green economy is forced to become a reality.
Of course this vision ignores major amounts of simple facts. Batteries for electric cars cost somewhere over $30,000. There are no charging stations even in heavily populated areas, and charging takes as much as 7 hours. Ethanol producers want the requirement for the amount of ethanol in gasoline increased from 10% to 15%. But only three percent of cars nationwide have flex-fuel engines — the rest of the engines can be destroyed by that much ethanol. Wind energy requires 24/7 backup from a conventional power source because wind is intermittent at best, and does not blow when it is most needed — in hot sunny weather when air conditioner demand is high.
The free market wants no part of this lovely vision because it is 1. absurd 2. doesn’t work and 3. is not cost-effective. The EPA has declared out of thin air that carbon dioxide is a pollutant and dangerous to human health, which allows them to regulate it. This leaves the scientists who know better in the position of having to prove a negative.
Filed under: Capitalism, Economy, Energy, Taxes | Tags: Cap-and-Trade, Carbon Trading Bubble, Fraud and Abuse
Housing bubble, credit bubble? According to an article in The Telegraph by Jeremy Warner, the newest area of securities trading that is potentially even more lucrative is carbon trading. According to an article in Harper’s Magazine, carbon trading is now the fastest growing commodities market on earth, damaging economies right and left.
Signatories to the Kyoto Protocol bought into the cap-and-trade concept in 2005, and since, there have been more than $300 billion carbon transactions, convincing several investment banks to set up their own carbon trading desks.
The promise lies in the fact that if President Obama and his supporters can pass a cap-and-trade system in the United States — a rather large if — demand could explode into a $ 2 trillion to $3 trillion market.
And here is the truly exciting thing about it. The carbon market is based on a lack of delivery of an invisible substance to no-one.
The market is about creating carbon credits , or finding carbon reduction projects whose benefits can be sold to those who have too much emissions, the whole thing is completely intangible. Can not producing carbon then be described as an asset? Has everyone gone completely nuts?
This is the most wide-open invitation to fraud and abuse perhaps ever seen.
Filed under: Capitalism, Economy, Energy | Tags: Cap-and-Trade, Rent-Seeking, U.S. Climate Action Partnership
The U.S. Climate Action Partnership — a group of companies and organizations who banded together to push cap-and-trade, largely because they expected to profit handsomely if it passed — is back in the news. ConocoPhillips is dropping out of the rent-seeking and lobbying organization, and BP and Caterpillar have also dropped their membership.
Perhaps the executives of these energy companies keep up with the news. But Chris Horner says “Sit back and watch.” He continues:
I say this because someone who would know informed me that a certain aluminum company was told it sure would be a shame if “social justice” campaigners got the company in their sights. You know, just saying, completely unrelated to the request made of said company to drop out of the U.S. Chamber of Commerce during the peacocking — led by Exelon, the windfall-profit-seeking, Axelrod-and-Emanuel-tied utility — in faux outrage over the Chamber’s tenuous opposition to cap-and-trade. And the same person told me the same message was delivered to a different company that indicated it might drop out of USCAP.
“Sure got a nice company here, be a shame if anything happened to it.” Let’s see if social-justice types coincidentally discover their outrage over the company’s various sins, both real and imagined. Like, say, not giving enough grants to certain groups.
And you thought those environmentalists were just nice people who liked trees.
Filed under: Domestic Policy, Energy, News the Media Doesn't Want You to Hear, Science/Technology | Tags: Cap-and-Trade, Carbon Confusion, Debunking Liberal Lies, Environment
Cap-and-trade has been much in the news, but Americans haven’t a clue what it is. A recent Rasmussen poll found that only 24 percent of respondents could correctly identify cap-and-trade as something having to do with the environment. A slightly larger percentage — 29 percent — believed that it had something to do with regulating Wall Street, and another 17 percent thought it had to do with health care.
Cap-and-trade does have to do with the environment, or at least with some views of the environment. It is a plan to force industry and other groups — anyone who emits carbon — to buy permits to release CO2. Those who emit less than their permits allow can sell their unused permits to others who emit more. Just those three sentences are enough to confuse anyone.
But industry does not bear the costs, they simply raise their prices. [You surely know that business does not pay taxes, don’t you? They just pass the cost of the taxes on to consumers].
Perhaps if we correctly called it “cap-and tax-you-a-lot,” folks would be more interested. Douglas Elmendorf, director of the Congressional Budget Office told the Senate Finance Committee on Thursday that “Under a cap-and-trade-program, consumers would ultimately bear most of the costs of emission reductions.” Actually some businesses stand to profit significantly, like GE and Duke Energy.
If “carbon emissions were cut by 15%” the CBO said, “it would cost each American household an average of $1,600 a year. In a worst-case scenario, the cost is $2,200 per household.” MIT in 2007, estimated tax increases at $3,900 a year, but some dispute that number, and another MIT economist came in at $3,100. Whatever it is, it won’t be small.
Many scientists do not agree that CO2 is a problem. Many scientists doubt that such a program would have any affect on CO2 in the atmosphere. Many doubt that CO2 has anything much to to with so-called global warming, since it is only a trace gas in the atmosphere.
Cap-and-trade has been tried in Europe, and has had no affect whatsoever on CO2 emissions, but a deleterious effect on the economy. The slowdown from the world capital crisis has done much more to lower emissions from shuttered industry.
The Obama administration feels that “policymakers can significantly affect the distribution of costs , depending on how they decide to distribute the value of the allowance.” The Democrat-led bill in Congress aims to cut U.S. carbon emissions by 20 percent from their 2005 levels by 2020, and dramatically boost reliance on renewable energy. Chip Knappenberger of Master Resource has calculated that Waxman-Markey — the Democrat led bill in congress — would at best avert 9/100ths of one degree in global warming. Which doesn’t sound even slightly cost-effective.
It is all very confusing. Many say that Waxman-Markey has no chance of passage. Obama seems set on passing cap-and-trade, and wants it passed by congress. Climate realists say that it will accomplish nothing at all, and be an economy destroying bill. Lisa Jackson, head of the EPA, said that an agency finding that carbon dioxide is a public health danger won’t necessarily lead to government regulation of emissions. Others say that Obama needs the income from cap-and-trade to establish his health care plan.
If you care about a large tax in the guise of increased prices hitting you about the same time that inflation from the government’s profligate spending does, it might be wise to learn what you can about cap-and-trade, and Waxman-Markey and other efforts of the government to separate you from more of your money.