Recordpub.com - OUR VIEW: New direction: 'Cap and tax' to reduce greenhouse emissions; costs may be formidable

The "cap and tax" bill approved last week by the House, if a similar version wins approval in the Senate, will pass on the cost of carbon fuels by raising their price to the consumer over time.

Proponents are gambling the bill will stimulate efforts to find other alternatives to carbon-based fuels that will make up the difference as the measure begins to limit the amount of carbon-based fuels a company can produce.

In other words, quotas would be established and the only way they could be exceeded would be for the companies that have them to buy allowances from other companies that wish to sell them.

Economic purists say a simple tax on carbon would be preferable and easier to understand.

Environmentalists, who have been the drivers in this latest effort to limit the greenhouse effect, like mandated limits because they believe they will cause the use of carbon-based fuels to decline over time.

The negative economic effects on coal-producing states are obvious with this approach and that is a reason so many Democrats back away from supporting the measure that President Obama has strongly advocated. The president also has thrown support to research to find cleaner ways of burning coal, which he hopes will eventually enable coal-burning utilities to keep burning coal and come in under the caps.

The nations of western Europe strongly approved the measure that won approval in the House of Representatives last week. German Chancellor Angela Merkel, who visited the White House when the vote was cast, said the bill does not go far enough, but that it is a start in the United States demonstrating responsible leadership in the effort to reduce the greenhouse gas emissions.

President Obama's predecessor, President George W. Bush, never got near the "cap and tax" proposal, saying efforts to cut the use of carbon fuel would reduce economic growth. It was one of the reasons he was reviled by Europeans who saw him as the personification of selfish and short-sighted American consumerism with its "devil take tomorrow" approach.

President Obama says the "cap and tax" measure will spur new technologies that will enable the U.S. economy to keep on growing and have the laudable effect of making the nation less dependent on foreign suppliers of oil.

Time will tell. Because the population of the United States is predicted to grow as much as 22 percent over the next 20 years, the pressure to consume energy will grow with it. Whether imposing caps on greenhouse gas producing energies will produce the kinds of technologies that will enable the nation to consume less energy in the aggregate remains to be seen, although the rate of consumption on a per person basis seems likely.

The bill is a gamble. If enacted into law, it commits the United States to become a more socially conscious and responsible consumer of energy.

1.	Posted by AMT June 30, 2009
	Dear Member of Congress: Why You Should Vote Against Waxman-Markey by Jim Manzi Wednesday, June 24, 2009 It appears that years of debate about climate change and energy may now come down to a vote on an actual bill, the American Clean Energy and Security Act of 2009 (ACES). As I write this, the vote is scheduled for Friday. If it occurs, you will be asked to vote to implement carbon rationing in the United States. Without regard to party or ideology, I believe that the evidence is clear that this law would be contrary to the public interest. Here is why, in a nutshell: 1. It would be a terrible deal for American taxpayers. According to the Environmental Protection Agency, it is projected to impose annual costs of about $1,100 per household (a little less than 1% of total consumption) by 2050. The benefits we will get in return? If the law works precisely as intended, in about one hundred years we should expect surface temperatures to be a about one-tenth of one degree Celsius lower than they otherwise would be. The expected costs are at least ten times the expected benefits, even using the EPA's cost estimates and assuming achievement of the primary goal of the legislation. 2. The argument that "Okay, it's a terrible deal standalone, but we need to lead the world by example" is extremely unconvincing. First, while you are probably not a climate-science expert, I bet you've negotiated a few things in your life. What do you think about the negotiating strategy of unilaterally giving away our most obvious leverage " namely "we'll reduce our emissions if you reduce yours" " and instead hoping that those nice men who rule China will be guilted into sacrificing their perceived economic self-interest if we just go first? Second and more fundamentally, as per many detailed analyses, the global deal that we would theoretically be chasing isn't even attractive, even if we assume every technical climate change prediction by the UN IPCC is correct. 3. Contrary to early expectations that auctioning cap-and-trade permits would generate $80 billion per year of government revenue, this law would not contribute materially to deficit reduction. You've seen the internal negotiations up close. Because so many allowances have been given away to special interests to try to get the votes needed to pass ACES, the CBO now estimates that it will bring in a net of a little over $2 billion per year over the next decade. As you know, this is about one one-thousandth of this year's budget deficit. 4. A further effect of all of these deals (which are entirely predictable in a democracy) is that ACES is very unlikely to achieve even the limited benefits that are claimed for it. The details of the bill mean that there is now not a hard cap on emissions for at least the first decade of its existence. What do you think the odds are that this will change at some undetermined point in the far future when all of the normal interest-group pressures of a democracy are supposed to magically disappear? 5. In short, Waxman-Markey would impose costs at least ten times as large as its benefits, would not reduce the deficit, and doesn't even really cap emissions. http://corner.nationalreview.com/post/?q=NDA3YmRkZWM1ZWE4ZjE0MGEwZWFiOTkzYWU0ZGZjOTY