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Cap and Trade Legislation: Unilateral Economic Disarmament

  • Cap and Trade Legislation: Unilateral Economic Disarmament

  • 8 June 2008 by 0 Comments

Cap and Trade Legislation: Unilateral Economic Disarmament
By Richard Larsen
Published – Idaho State Journal, 06/08/08

Here we are on the verge of a possible recession (we haven’t had two quarters or even one quarter of negative GDP growth), and in the midst of an energy crisis with $135 oil, and what was Congress debating this week? A tax that will hit the economy from $1.7 to $4.8 trillion, and cost the average American family up to $3,726 per year! Such legislation will, if eventually passed, virtually ensure an ongoing recession by adversely affecting national GDP by 2 to 3% per year according to Time magazine, which inexplicably thinks it’s a good idea.

The Warner-Lieberman bill, the so-called cap and trade bill would have done that, and probably more. After all, when was the last time a government program cost projection was accurate? This bill, defeated by the Senate, was heralded by mainstream media, and certain politicians, as “bold national policy” designed to reduce carbon emissions and “contain climate change.” Yet even in the best-case scenario, the potential climatic impact would be a change in global average temperatures by about 1/100 of a degree between now and 2030. Who in their right mind would think that’s a cost-effective use of tax-payer money? Apparently a bunch of Federal legislators and many in the mainstream media fall into that inane category. It really makes me wonder what has happened to common sense in politics. It obviously is a rare commodity on Capital Hill and is declining as precipitously as Congressional approval numbers.

Cap and trade legislation forcibly lowers carbon dioxide (CO2) emissions by placing limits, or caps, on companies that emit CO2, and affords a mechanism for them to trade or buy credits from companies that are under those limits. By creating such a mechanism, utilities and companies emitting less than the limit could sell credits to companies over the limit, which would have to buy the right to emit more CO2. The net affect on the environment is negligible, but the potential to drive energy related costs higher and higher is significant, according to the National Association of Manufacturers (NAM).

MIT published a study earlier this year that estimated the cost of implementing such a system would cost $3,500 to the average American family of four by creating a massive tax on energy that is then passed on to consumers including a 44% increase in the cost of electricity. The NAM estimates the impact on the cost of gasoline would be as much as an additional $5.00 per gallon by 2030. That means if this bill was in effect now, gas would cost $9.00 per gallon.

Even if the CO2 emissions are reduced as predicted, based on the “science” of the proponents, the impact on the global environment is a decrease of 0.013 degrees of “prevented warming,” according to the National Center for Public Policy Research. Look at it this way, if you were buying a car, and the salesman said it may or may not run, and even if it did, it may not function the way it was designed to, would you dish out $3,500 for that car?

What makes much more sense is to do the same thing we did last year. Global temperatures dropped by 0.7 degree Celsius last year. That decline actually eradicates the increase of the past 100 years, according to all three monitoring agencies. So what did we do to achieve such a drop in global temperatures? Aside from individual conservation, we did nothing. Could it be that climate temperatures actually fluctuate regardless of mankind’s CO2 emissions?

The fundamental premise of this kind of legislation must be rejected. That premise seems to be that we can “save the planet” by reducing our carbon footprint. There is no underlying science that proves we can do so. Secondly, we must learn from the mistakes of Europe which has implemented cap and trade policies. The three years of Europe’s experiment has been a disaster both from an environmental perspective and economically, according to the UK Times.

Let’s consider a few facts. CO2 is a colorless and odorless gas in the atmosphere that is measured in parts per million, or ppm. The vast majority of CO2 emissions, about 97 percent, comes from Mother Nature, including what we humans exhale.

CO2 is nowhere near the most important greenhouse gas; water vapor holds that distinction. An astounding 99.9 percent of Earth’s greenhouse gas effect has nothing to do with manmade CO2 emissions. If measured on a football field, manmade CO2 would amount to less than a centimeter.

The Warner-Lieberman bill has been defeated but it was a dress rehearsal for another version next year, especially if Congress moves more to the left in the November elections. These efforts amount to draconian command-and-control attacks against our quality of life under the auspices of environmentalism. The underlying premises are flawed, and the recommended measures can virtually destroy the American economy. Unilateral disarmament was wrong militarily; and cap-and-trade legislation amounts to unilateral economic disarmament.

Richard Larsen is President of Larsen Financial, a brokerage and financial planning firm in Pocatello, and is a graduate of Idaho State University with a BA in Political Science and History and former member of the Idaho State Journal Editorial Board. He can be reached at rlarsenen@cableone.net.

About the

More than anything, I want my readers to think. We're told what to think by the education establishment, which is then parroted by politicians from the left, and then reinforced by the mainstream media. Steeped in classical liberalism, my ideological roots are based in the Constitution and our founding documents. Armed with facts, data, and correct principles, today's conservatives can see through the liberal haze and bring clarity to any political discussion.

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