Here’s my April 28th article in the UW’s daily newspaper on the damage a cap-and-trade program would do to the U.S. economy. Unfortunately, I was wrong about the Dems shelving the legislation until 2010, as it turns out they want to bankrupt the country far sooner than that:
(Some portions underlined for emphasis, just for this post)
No matter what side of the global-warming debate one is on, Americans should fear the implementation of a cap-and-trade program in the United States. This kind of program would not only cause energy costs to skyrocket, but it would also raise taxes and do irreparable damage to the economy.
Under the program, the government would require every company in the United States to hold an emissions permit for each ton of carbon dioxide it emitted into the atmosphere. These permits would represent a certain amount of credits, or allowances, which would put a cap on how much carbon dioxide the company could emit. Over time, this allowance would get more and more restrictive, until the target goal set by the government for that company was reached.
Needless to say, some companies would find it easier than others to meet these goals, and that is where the trade aspect of the program would come in.
Companies that could easily comply with the government’s emissions cap would be able to sell their extra permits to companies that could not comply as easily. In other words, less efficient companies would be forced to buy extra permits from more efficient companies in order to become compliant with government standards. While many may think this sounds like a good idea, President Obama did a good job of explaining why it’s not.
In January 2008, then-candidate Obama told the San Francisco Chronicle, “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket.” He continued, “Whatever the plants were, whatever the industry was, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.”
In other words, to be able to afford the extra permits that they would inevitably have to buy, the companies that heat our homes and businesses would have to charge us more to do so. With the coal industry supplying half of the electricity we use in the United States, this would mean a lot less cash in the pockets of U.S. citizens.
While the burden on U.S. families would be heavy, the burden on energy companies would be unbearable. I’m all for investing in new types of energy as we move toward the future, but I don’t believe it’s right to punish the companies that are producing and utilizing the only resources we currently have at our disposal.
The oil, natural gas and coal industries are not evil, despite what some global-warming alarmists may tell you. They play a key role in ensuring that our economy keeps chugging along, both in good times and in bad. Do they emit large amounts of carbon dioxide? Undoubtedly. Is man-made carbon dioxide to blame for the warming of the globe? The jury is still out.
So while the debate rages on, let’s not take action prematurely and punish business in order to solve a problem that many believe is purely cyclical. After all, the major concern back in the 1970s was global cooling, and here we are in 2009, concerned about global warming.
Regardless of who’s right about the global-warming debate, it’s clear to see that the implementation of a cap-and-trade program would be a disaster. It would significantly raise taxes on both businesses and families and would severely depress economic growth. There is one good piece of news, though, and that is that Congress recently decided to shelve this legislation, which means legislators won’t be looking at it again until 2010.
If we’re lucky, that should be just enough time for us to dig ourselves out of this recession before the government puts us back into another one.