Cap and Trade: Good Intentions are Not an Excuse for Bad Policy

A CBO report came out this morning talking about the financial impact to families of a Cap and Trade system imposed on CO2 emissions. The results of their analysis aren’t surprising, in fact the CBO backs up a good portion of what I have said before about taxing or restricting CO2 emissions.

Let me just start off by saying that I don’t agree with global warming induced by CO2 emissions on a scientific basis. I think that the climate models used were extremely flawed and from reports I’ve read don’t take into account things as complex as global energy distribution and things as simple as historical records, sun spots, and the cooling effect of rainfall and natural disasters (such as volcanoes).

Basically, I am not willing to concede that we need to limit CO2 emissions and at this point in time think that any efforts to do so would be a huge burden on our economy, at a time when we don’t need it and can’t afford it.

Given that, let’s consider CO2 emissions. We don’t know how much CO2 affects global temperatures and how significant that change is to the earth. We really don’t know what appropriate levels off reduction are. Is a 10% reduction sufficient, 15, 20, 25%? At what point do you ban things like soda, beans, and grass? Do you put limits on livestock? Do you tax livestock owners? A recent report I read said that one moose puts out more CO2 than one car. Do we start reducing wild animal herds? You can see where I am going. If you don’t know what really 'needs' to happen because you don’t really understand the complex global system that God put in place, or all of the million variables that can contribute or retract from the issue, then you can’t really say how much impact any change will have. Basically you are trying to make a significant restriction on energy and United State production capacity without even knowing if it makes ANY difference at all!

According to the CBO’s report, a reduction of 15% in CO2 emissions “…could cost the average household roughly $1,600 (in 2006 dollars), ranging from nearly $700 in additional costs for the average household in the lowest one-fifth (quintile) of all households arrayed by income, to about $2,200 for the average household in the highest quintile.”

Does this make sense to anybody? Do you understand now that when President Obama says that 95% of Americans will not see one dime of increase in their taxes he is lying? Not misleading. Lying.

Any action we take in this area is going to adversely affect poorer people in this US and in countries abroad. Production of all grain, produce, dairy, and meat will be more expensive. Shipment of any products to stores will cost more. Every drop of gas will be more expensive.

Not only is there going to be a significant cost to lower income families, the increased cost is actually part of the GOAL of the program. The CBO says,

“Price increases would be essential to the success of a cap-and-trade program because they would be the most important mechanism through which businesses and households would be encouraged to make investments and behavioral changes that reduced CO2 emissions. Those increases, however, would impose a larger burden, relative to their income, on low-income households than on high-income
households.”

When you hear “Cap and Trade” you need to have your mind translate that into ONE THING, “TAX INCREASE”. They will claim that this is for the environment, but it is absolutely for money. They will claim that they are doing this for “the children” and “future generations” but what they are really doing is hurting poor children and hamstringing the potential of future generations.

There may very well be some good intentions behind cutting CO2 emissions, even if the science does not back it up. But remember, good intentions don’t always make good policy. Our lawmakers had good intentions when they started requiring a percentage of corn crops to be directed towards ethanol. The effect was higher global prices on corn. People were starving in Latin America because they couldn’t afford to buy tortillas or grain for their livestock. There were riots in the streets! Good intentions are not an excuse for bad policy.

Cap and trade means higher prices, higher taxes, a drain on lower income families, and lower revenues for businesses. I would hope after what we have seen in the last six months everyone would know how that works out, but just in case you are THAT DENSE, lower revenues means falling stock prices, 401Ks, layoffs, and more jobs transferred to India, China, and eventually Africa, where a cap and trade system does not apply.

The US needs to say NO to cap and trade... while we're at it I think I need to say no to that second cup of coffee...