Cap-and-Trade

by Bob Benze

The major news outlets regularly carry alarmist stories on why legislation must be passed to reduce carbon dioxide emissions to combat climate change.   But almost no one in the media seems concerned with the rest of the story — that the cure may well be worse than the disease.  

There has been little discussion of the economic impacts of the cap-and-trade programs.   These programs are designed to radically restrict the only readily available large-scale source of energy used in this country—fossil fuel, which will dramatically drive up energy costs.  Few people comprehend the real impact this would have on our economy.   There are some rose-colored studies,  like the Stern Review, but other studies paint a more sobering picture. 

For example,  a Heritage Foundation analysis of the current Waxman-Markey bill, projects that by 2035 the bill would: Reduce aggregate gross domestic product (GDP) by $9.6 trillion; Destroy 1,105,000 jobs on average,  with peak years seeing unemployment rise by over 2,479,000 jobs; Raise electricity rates 90 percent after adjusting for inflation; Raise inflation-adjusted gasoline prices by 74 percent; Raise residential natural gas prices by 55 percent; Raise an average family’s annual energy bill by $1,500; and Increase inflation-adjusted federal debt by 26 percent, or $29,150 additional federal debt per person, again after adjusting for inflation. 

 The Congressional Budget Office has raised major concerns over the negative economic impact. Republican leader John Boehner estimates the average American family’s federal taxes will increase by $3,100 a year just to pay the $366 billion a year the new program will cost. 

But that isn’t the worst part.  Even if the U.S. were successful in eliminating 70 to 85 percent of the carbon dioxide it produces by 2050,  as the environmentalists say we must,  a strong case can be made that there would be no meaningful environmental benefit–ever.  

Energy expert Peter Huber, in a City Journal article, says:  “We rich people can’t stop the world’s 5 billion poor people from burning the couple of trillion tons of cheap carbon that they have within easy reach.   We can’t even make any durable dent in global emissions—because emissions from the developing world are growing too fast,  because the other 80 percent of humanity desperately needs cheap energy,  and because we and they are now part of the same global economy.   What we can do,  if we’re foolish enough,  is let carbon worries send our jobs and industries to their shores, making them grow even faster, and their carbon emissions faster still.”  

Wind and solar energy,  which depend on wind and sunlight,  aren’t really suitable for baseload power,  and they can’t compete cost-wise with traditional coal,  natural gas or hydroelectric generation without major federal subsidies or requiring utility customers to pay a steep premium.   These alternative energy subsidies must come from an increased tax base–placing an unacceptable burden on individual people and further crippling the ability of American manufacturers to compete in the global marketplace. 

What sane country would implement policies that place the very segment that generates its wealth at such a disadvantage—policies almost guaranteed to put major U.S. industries out of business?   

If people are really concerned about carbon there are better answers.   France decided some time ago to produce its power with safe, clean nuclear energy.   The ITER is an international project to design and build an experimental fusion reactor.   It is a precursor to a worldwide power system that will obviate the need for fossil fuel long before global warming endangers the planet.   And the biological sequestration of carbon in new forests already captures more carbon than is produced in North America–an interim solution that could be expanded worldwide. 

Finally, there is the question of whether the science of carbon dioxide causation is really settled.   The answer is clearly “no”.   Over 30,000 reputable scientists have signed a petition saying otherwise—including far more atmospheric scientists than the number of IPCC scientists who supported the conventional view.  

Increases in greenhouse gasses do cause warming.   But the latest research suggests the real culprit isn’t the weak carbon dioxide input,  but rather the much stronger effect of atmospheric water in the form of clouds.   A number of scientists, including Heinrich Svensmark of the Danish Space Research Institute,  make a compelling case that cosmic radiation seeds the formation of clouds; with cosmic ray intensity a direct function of solar activity.  

Indeed,  there is a far better historical correlation between solar activity and global temperature than the carbon dioxide correlation.   Even the data used by the IPCC shows no rise in global temperature over the last decade,  in direct relationship to decreased solar activity,  not the rising carbon dioxide levels.   The total temperature rise this last century has been about one degree Fahrenheit.  

The issue may be settled in the minds of environmentalists,  politicians and the media,  but it is far from settled in the scientific community.    And the public remains unconvinced.  Today, only about a third of people surveyed considers climate change to be a real problem. 

So perhaps we should all step back and take a deep breath before we break something that we may never be able to put back together again—the greatest economy in the world.

 

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