Cap and Trade: New Nefarious Alchemy Gaining Ground
by Dr. Tony Magana
Despite economic and scientific evidence mounting that a tremendous fiscal sacrifice requiring a maximal effort may in the end offer minimal reward the climate change juggernaut folly is advancing.
The Waxman-Markey cap and trade bill which has been beclouded multiple times, having gone from just over 900 pages to at least 1,200, now appears likely to pass the House of Representatives by a partisan vote. The articulated goal of the bill is to reduce carbon dioxide gas emissions by 17 percent over the next ten years by the government establishing a monitoring system for literally millions of businesses and then placing a tax on excess emissions.
Originally President Obama had prescribed there would be no free allotments and that all enterprises would have to pay for their emissions. Initial reports by the independent analysts as well as government entities like the Congressional Budget Office confirmed the measure in effect would be a large tax on not not solely the energy industry but inclusive to all businesses leading to the costs ultimately passing down to the consumer. In order to gain the favor of moderate Democrats from the “Rust Belt” many backdoor barters of free allotments for votes have been struck with rural electrical producers, mass transit authorities, some but not all biomass fuel manufacturers and others that lobbied intensely for special treatment.
The act assumes that there is technology ready to go which can step in to replace the 85% of energy produced by the fossil fuels in the United States. Howbeit President Obama and the Congress have allocated funds for further development of battery technology, smart grids, solar and wind technology the truth is that although these might result in less carbon dioxide emissions they will be much more expensive than fossil fuels. One need examine Europe where gasoline often costs three times as much or more than in the United States and there have been cap and trade laws in place yet essentially no one drives electric or hybrid cars. Electric cars or hybrid cars are not capable of beating conventional small internal combustion engine vehicles in cost or convenience. Although some areas of Europe rely on significant wind and solar power these are not the predominant forms of energy production.
Although the very liberal Center for American Progress claims the Democrats initiatives may, for an investment of $150 billion create 1.7 million jobs and lower household energy bills these claims are not shared by other more established and credentialed experts. In actuality there are real problems in conjecturing not just what will be the effects if any of the legislation as well as the real costs. Most of the scientists confirm even with a maximum effort should the emissions goals be fully achieved which is improbable and the global warming trend models are correct that only a 1 degree temperature difference will be achieved by 2050.
Experts at the moderate Brookings Institute forecast very negative effects on employment extending into the first five years of the program coupled with a severe rise in inflation at the same time while the economy has a whole is not likely to show recovery. During this period payments on the federal deficit as measured by the percentage of gross domestic product will actually increase over and above those historic levels that were present at the end of World War II.
The conservative Heritage Foundation’s Senior Policy Analyst for Energy and Environment, Ben Lieberman testified before Congress saying the 2035 electrical energy costs will go up by 90% with the agricultural and domestic manufacturing sectors being especially hard hit. Other experts at Heritage point out the recent report by the Congressional Budget Office (CBO) looking at the effects of the cap and trade legislation admitted “the resource cost does not indicate the potential decrease in gross domestic product (GDP) that could result from the cap”. The CBO assumed that economic losses would be dealt with by a perfect redistribution of taxes from the government to areas or sectors severely hit which is beyond any realistic expectation. Never has any government program every returned dollar for dollar the money collected.
Even though Europe has had cap and trade rules in place, their rate of carbon dioxide emission growth is now actually faster then the United States. Reviews of Spain and other European countries reveals the good intentions of the program become transformed into systems of cronyism, political patronage, and power wielding. No positive economic achievement as has been imagined by the Center for American Progress has occurred in the European economy as a whole.
Finally this week two startling revelations have emerged about hidden agendas in the cap and trade legislation. The environmental lobbying groups want the United States to pay unrestricted billions to foreign countries who trade with the United States such as Brazil to convince their compliance with global warming even at time when the American deficit will reach historic highs. The new cap and trade initiative also provides an opportunity for liberals to put in place protectionist policies which mandate tariffs against nations which do not meet arbitrary American standards creating an inflammable world trade situation likely to spark trade wars and retaliation against American exports.
The United States already has less emissions than Europe, however, mutating our major industries from a capitalist driven market approach to an essentially socialist centrally controlled economy where the government has the power to decide winners and losers will have the same negative consequences as been in seen in Europe. Let us hope that the older and wiser body of the Senate will stop the folly if the measure passes the House.
Thanks for reading Contempo Magazine blog which discusses issues for McAllen, the Rio Grande Valley, and America from a conservative Hispanic point of view. Tony Magaña grew up in McAllen Texas, attended Texas A&M University, served as an officer in Army Reserve, and holds a doctorate from Harvard University. The co-founder of Contempo Magazine has participated in Valley business for over 20 years. He is a member of the National Association of Hispanic Journalists and also writes for the American Daily Review. Follow him on twitter http://twitter.com/contempomagazin
