Cap and Trade: It’s Hip to be Marx!
BY: NCViking
Imagine that, the projected costs of this boondoggle keep going up and up.
From the Heritage Foundation
Though the proposed legislation would have little impact on world temperatures, it is a massive energy tax in disguise that promises job losses, income cuts, and a sharp left turn toward big government.
Ultimately, this bill would result in government-set caps on energy use that damage the economy and hobble growth–the very growth that supports investment and innovation. Analysis of the economic impact of Waxman-Markey 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.
Here is an interesting take from a cement manufacturer in California responding to an already mandated CO2 reduction of 12% (from examiner.com)
One cement manufacturer in Colton California was told by the state that the costs to retrofit their manufacturing facility will run around $20 million, but upon research by the company, they discovered that the retrofit will cost roughly ten to fifteen times that amount or about $200 to $300 million. The manufacturer has acknowledged that this will add 40 – 50 % to their cost structure, rendering them unable to compete against cement imported from China and Mexico. The plant will be unable to operate and be forced to shut down.
Raise the costs of everything and wreck our prosperity for a very flawed theory that will achieve little to no effect on the climate. Nice. The theory of CO2-induced Anthropogenic Global Warming Climate Change is badly crumbling so eager politicians need to pick our pockets quickly before we feel their hand on our wallets.
Let’s call it what it is: a tax to further fill the coffers of Government to redistribute the take as they see fit … all for the greater good, of course. After all, it’s ‘Hip to Be Marx’ these days, right?
Everybody, get your hammers ready!
Mon Dieu!
- Economic Crisis of Confidence - February 8th, 2010
- Cato Analysis and Fact Check of SOTU Speech - January 28th, 2010
- State of the Union Déjà vu? - January 26th, 2010
- Purple Predestination - January 25th, 2010
- Prince Composes New Vikings Fight Song (Oh Yes He Did!) - January 22nd, 2010
A lesser part of me believes that Democrats are trying to do a power grab, but attempting to put in place a Cap and Trade program, they know the effects on many businesses, and they are OK with that, because it will give the central government more control. In essence, what the video says, a pure power grab.
But most of me thinks that this is driven out of the leftist ideal of do-goodery, where if it feels good, it must be good for all. In other words, they are not doing this for power, but taking power in order to do what is best for those fools who do not know what is best for them. They actually believe that imposing a crushing tax, it will give more money to the government, which then those resources can be used to make more green jobs.
Believers in this philosophy believe that the government will better utilize these scarce resources, and better allocate them to productive means. This is what is scariest to me. The fact that anyone: Democrat or Republican, thinks that the Government can more productively use capital than a private company.
I do not understand how anyone can believe that (1) imposing rules only on ourselves, (2) taxing the most productive individuals and companies to a point where they will need to layoff or shut down, or (3) the government can better control and allocate these resources.
The Heritage Foundation (THF) report is deeply flawed for several reasons.
1) Readers should know that THF opposes clean energy, never mind going to green energy http://climateprogress.org/2008/11/06/the-intellectual-bankruptcy-of-conservatism-the-heritage-foundation-opposes-clean-energy/
2) The study only speaks about cost and not the benefits (never adjusts for benefits, ever), so it is deeply one sided. There are several benefits that should be considered. A balanced study would have presented those.
3) The study estimates at total costs over the 25 or so year span as $9T. Readers should know that study states that costs in 2012 will be #200B and will stay roughly at that number raising slowly to an inflation adjusted $700B by 2031. Those numbers are roughly 1.5%-2% of GDP.
4) In fact, gains and benefits made by Cap & Trade results in growth in the economy. I do expect a study that you would quote here to present all of the facts and not be one-side like the THF report.
5) The job loss numbers in the chart do not match the costs, or gains. I’ll explain. The cost impact according to THF is $200B in 2012. This number then stays constant or slowly decreases until 2021. (That’s right, decreases). Jobs losses then, if we just looked at costs, must follow the same pattern. The study claims huge job losses on day 1, followed substantial drop in the number of losses way into 2021. The job loss projections are way off.
NOW, FOR THE GAINS
6) A company pays no Cap & Trade (CT) once it converts to green, or stays under the emission guidelines. The goal of CT is for companies to move away from bad technologies. It is therefore impossible to argue that CT costs will rise forever.
7) Next, more efficiency in the system means dramatic less costs. I would gladly trade a $1,500 electric bill for a 50% drop in my gas consumption costs. Which means, there are real savings not counted in the THF study.
IT’S NOT MARXISM, NOT EVEN CLOSE
For the last 25+ years the US has been setting safety and gas mileage standards. It hasn’t made anyone a Marxist. They were set by Nixon, Ford, Reagan, …. This talk of Marxism is pure (and ridiculous) fear mongering.
There are strategic as well as solid financial reasons to stop buying oil from our enemies. Real Americans defend America’s best interests in the future.
I won’t debate the merits of THF report or your analysis because both are rife with assumptions. which is OK, but render them opinions. We really don’t know for sure. I will only add one point: adding a punishing CO2 tax will not move America over quickly to renewable energy if ever. The technology isn’t there and costs to entry are astronomical. It’s much easier to pass on the cost or avoid it through lobbying and politics, which in my opinion is what will happen. Looks like THF believes this also.
Carbon Cap and Trade is not about ‘Green’, it is about sequestering CO2.
Setting standards is one thing, placing a punishing tax on industry to fill government coffers with the intent of creating “social equity” is Marxist (follow the link I provided to the post on this).
Agreed. But again, we are talking about technologies to sequester CO2, not ‘Green’. If Waxman or Obama for that matter were only pushing carrots (incentives, tax breaks, etc. [not subsidies]) to move to renewable energy for the purpose you state above, then great! This is not the case – Cap is a punishing tax that will further burden industry and ultimately average Americans. The Trade part is creation of yet another financial paper chase that opens the door to corruption and manipulation … for what? We have a case study to reference in Europe and it isn’t doing much. It’s success is also reliant on all industrialized countries implementing cap and trade models to provide an even burden on the playing field, which is likely not going to happen in the case of India and China.
really? throwing your own post, the entire basis of this thread under the bus? discussion over then — my reply must have made you seen the light about the fraudulent THF report.
Cap and Trade is all about buying and selling CO2 trades. A company avoids the tax by buying clean or green technology credits. The tax isn’t punishing on day 1. It is in fact exceptionally lenient until some time in 2025 or 2030.
We clearly know that CO2 is accumulating in the air and ocean. One way to resolve this is to create more forests. Cap and Trade creates the incentives to do so. It is a very capitalistic way of exchanging values. It is hardly Marxist.
Another way is to build nuclear power plants. Nuclear are very green, get lots of credits that are exchanged for coal plants.
The link you posted, and everything about your post, doesn’t say anything about Marxism. It just throws the word out there to create fear.
I suppose that you are just very happy buying oil for the next 25 years without regard to price or what it does to the economy. Then you’ll wake up one day when Russia has shut off natural gas to Europe, and Iran nukes Saudi Arabia and you are going to say: “should have moved to non-oil, non-coal way back in 2009.”
It is entirely possible for the entire energy transition to be just a transition, no punishing penalty. The cost of changing, spread over traditional 30 year amortization, may actually be less than the increased costs in oil, coal, electricity, etc…
The cement example you gave above is very interesting. The California regulations do provide the push for innovation in cement production. It may be that cement production will change to non polluting methods. This can then lead to tax on imports that will cause China, Mexico, etc… to also change.
By being part of the debate, instead of against it, instead of No, instead of continuing needless fear mongering, conservatives can push for a balanced approach where American companies are the winners and taxes are pushed to non-American companies.
I expect that this particular point will be lost on this blog. It will continue to be “the sky is falling.” It happens to be the same nonsense argument that conservatives pushed against mileage standards and seat belts in the 70’s. The reality is that everyone is much safer, everyone saves tons of money, lead isn’t being polluted into the air. Thank God there are progressives!
Your reply brought up some interesting points but did not prove fraudulent behavior in the THF report. I then reiterated my position and provided a reference for what I believe may be the basis for their prediction.
It’s about how companies can trade carbon vouchers from the government for a fee. The goal is to sequester CO2 or reduce its output. And as you rightly point out – it is a tax.
Government selling CO2 vouchers (tax) and using it as a means to redistribute wealth or create “social equity” is Marxist ideology. That goal was referenced in the linked post. Also, the use of his ‘hip’ picture and the comment “Its Hip to Marx” was tongue-in-cheek, not fear mongering, and provided a link to an article showing increasing sales of Marxist materials lately.
Nope, you suppose wrong. As I said: Pushing carrots (incentives, tax breaks, etc. [not subsidies]) to move to renewable energy for the purpose of energy independence would be great! Much less convoluted and likely more effective.
Increasing taxes and tariffs on imports is rarely ever good.
What we ALL can agree on is advancing alternative energy, working wisely with what we have in abundance domestically (coal, natural gas, offshore oil reserves) and weaning ourselves off of foreign sources of energy. As Crichton rightly points out, we are already advancing away from CO2-based energy through advances in technology and providing carrots in the direction of renewables to hypercharge advancement will have a natural CO2-reducing effect without taxing … and without the TRUE fear mongering that is going on – anthropogenic CO2-based Global Warming hype. Everybody wins.
Example: Obama did provide a good thing in the Porkulus: a tax break for replacing windows to more energy efficient ones. I am seriously looking at doing this for my house since the windows are old. This motivates me to be constructive; taxing me will just make me turn down the thermostat, which is much easier to do and easier on the budget. You can probably map out the impact on jobs for both choices and see that the tax break would stimulate economic activity where taxing forces cuts in costs and jobs.
There is insufficient off-shore oil to power 20% of America’s current oil needs, and probably no more than 10% of it’s needs by 2015-2018 when it comes into production. How long do we want to keep up the notion that off-shore is anything but an extremely short sided proposition.
How are CO2 different than off-shore oil leases? Aren’t both exactly the same?
If we accept that the government has the right to oil leases, and that the money goes into the general fund, what the government is doing then is raising revenue in the same way it taxes trade or income.
If we accept that incentives are necessary to grow non-oil sectors of the economy, much like incentives were placed to develop nuclear energy, or rural electrification, then we accept that CO2 cap and trade is a way to promote development for various goals: get off of oil and create a more secure future (as in don’t let our enemies control us).
Your recommendation is tax incentives. How are tax incentives not a sort of tax of their own?
A tax incentive is in reality: everyone pays for the benefit of an entity. To provide an tax incentive to the electric company is really to subsidize electricity, or to move money from tax payers to a business.
Since we never collect enough to pay our own way, tax incentives is also borrow from your children to feed a rich person.
Your hip picture of Marx and the lack of any reasoning on the Marxist charge is pure and total fear mongering.
No one really knows how much oil there is out there, some say nominal, some say abundant. Is drilling the long term answer? Of course not, but rejecting viable energy in favor of not-yet-proven technologies is equally foolish. A strategy of advancing alternative energy and working wisely with domestic resources is the most sensible approach.
No. Oil leases and royalties are paid by oil companies for the right to drill on public land and/or water. They buy these to get stuff to sell and reap a profit. CO2 permits are for the right to off gas a byproduct of industrial activity. It is a penalty on industry where politicians and traders reap a profit.
Tax incentives stimulate economic activity, which in turn raises Federal revenues.
The difference you state is trivial. Oil companies buy leases to drill on public lands. The lease is a cost to oil companies which in turn pass those costs to consumers.
CO2 vouchers are rights to pollute the air and water we all drink and breathe, and therefore public by definition. The costs of the vouchers are in turn passed to consumers.
There is not one iota of difference between them ~ unless you believe that oil and coal burning companies should be able to pollute without paying a single penny — which is where certain type of conservatives fail.
Tax incentives are by definition an investment in the classic sense, basically in the form of why pay me now a small amount when you can pay me much more later.
That is, if later ever comes. Oil companies have had significant incentives in the last 50 years and none of them have moved off the dime, except for T Boone Pickens (see boonepickens.com).
The Laffer Curve does not say that reducing taxes will increase revenues infinitely. It says that there is a single optimum point at which taxes become burdensome. See Heritage.org (http://www.heritage.org/research/taxes/bg1765.cfm) or the video (youtube).
You pay your taxes on time, or you pay a penalty. That’s a pretty good incentive right there. Incentives or penalties, neither will happen unless someone decides to take action.
It’s far from trivial. One is an investment using public land/water to get a ‘product’ to sell for a profit. CO2 is a bi-product of the production of energy and industry that is being taxed. CO2 is also not a pollutant.
I prefer carrot, you prefer stick.
Incentives = giveaway
There is no guarantee of a return, only a very vague promise.
There are many other issues for conservatives with incentives: the biggest one is that the government is picking the winners, then financially supporting them with your money.
Everyone wants a giveaway from the government. Including it would appear you.
The reverse of a giveaway is that polluters pay their own way. Why on earth would you want everyone in the US to have to support the effects of pollution from oil and coal? They need to pay their own way, period.
Cap and Trade makes businesses responsible for their own CO2, period. Not you or I. We get to choose whether we want to continue to buy from them or buy from alternatives, when they become available.
It’s called the marketplace. It’s capitalism.
A new report from a dozen retired U.S. military leaders warns that maintaining the country’s current energy stance poses significant risks to its national security. The report is from the Military Advisory Board and published by CNA, a military research advisory firm.
http://www.cna.org/nationalsecurity/climate/
Among the conclusions:
• The U.S. uses a quarter of the world’s oil but only controls 3 percent, leading to a dependence that undermines its foreign policy objectives and economic stability.
• Climate change will foster instability in already politically unstable regions. Dwindling fossil fuel reserves will face additional costs from an increase in demand and future regulations put in place for carbon-intensive fuels
• The military is overly reliant on fossil fuels but uses them inefficiently, undermining effectiveness and exacting a human and economic toll. The Department of Defense should understand its own carbon footprint, correct inefficiencies and adopt renewable energy where possible
• The U.S. electricity grid is vulnerable and represents a “weak link” in national security infrastructure. The U.S. and Department of Defense should pursue smart grid technologies.
• The panel recommends the Department of Defense integrate energy security and climate change targets into national security and military planning processes.
Still think Waxman-Markey is all about some gov’t subplot? It’s time to move beyond oil.
I don’t agree with the boondoggle method of cap and trade, and noted that powerful advocates of this want to use it to produce social equity by redistributing wealth. I prefer incentives.
And as you know, I don’t agree with the Climate Change assessment or using reduction of carbon footprints as an excuse. Call it what it is: Weaning ourselves off of foreign sources of energy, including oil which is a dwindling resource, is paramount for the future security and prosperity of our country. Advancing alternative, renewable energy and working wisely with finite domestic resources is the most sensible approach and important – the ‘War on CO2′ is not.
Calling it a boondoggle and claiming that powerful but unnamed want to use Cap And Trade to produce social equity are, by definition, trying to just create fear and uncertainty. You are probably just taking a page from the Republican playbook.
Whatever happened to facts and reason?
- Fact. There is no money to be derived from C&T to fund other projects. C&T is a trading system, specifically CO2 exhaust trading. For there to be a trade there would have to be a buyer and a seller. The electric company or other emitter would be the buyer. The seller is someone who owns a forest. He would get paid not to sell that land and pave it into a mall.
- Your post from THF shows that the total cost to buyers by C&T is $200B. What they don’t tell you is that this money goes to holders of verifiable CO2 offsets, not for social programs.
- You may question the notion that CO2 isn’t harming anyone, or the world at large, but the military completely disagrees with you.
The premise of an incentive is that a company the emits CO2 wants to make a greater profit by paying less tax. This sets a maximum amount that a company will spend on reducing CO2: to amount it can save on taxes. Companies may also chose to spend far less for many different reasons.
So outright, any technology that requires more money that utilities can save though taxes is going to get ignored.
Companies also have no time line. They could chose to use the incentives this year or next.
And companies have no goals. Should they reduce 15% or 5%. What if reducing 5% is easy and 15% very difficult?
Incentives are dramatically draw down the number of choices on reducing CO2 emissions. They probably could get a credit if they purchased wind or wave pressure generated power, but no credit for buying acres of woodlands.
C&T creates a much broader market, because it actually pays people to sustain woodlands and forests. C&T also fosters significant innovation by creating the conditions where companies will purchase products that will reduce CO2.
If you can show the math where incentives beat C&T, you would have a case based on facts. Otherwise it’s a distraction to say incentives but not back them up.
And by the way, no republican in congress is saying incentives because the math didn’t work for incentives.
Trackbacks
Who knew Amtrak was so Exciting? | The Great Illuminator
Dumb Video of the Day - VI | The Great Illuminator
Obama Climate Change Report: Don’t Retire to Florida, it Will be Under Water! | The Great Illuminator
Leave your response!
Our Growing Debt
Countdown Timer
in 32 months, 3 weeks, 3 days, 15 hours, 33 minutes, 11 seconds
Latest Illuminations
Subscribe to Posts
Categories
Authors
Archives
Center Links
Conservative Links
Great Forums
Liberal Links
The Great Illuminator
Most Commented
Tags