Paul Krugman argues that cap and trade worked to reduce sulfur dioxide and stop acid rain, and so it will work to reduce C02.
However, two EPA lawyers with more than 40 years of cumulative experience - including the guy who has been head of California’s cap and trade offset programs for more than 20 years - say that sulfur dioxide was different, and that cap and trade for climate is a scam which only benefits the financial players.
Specifically, they point out that:
An online magazine covering tools, models, and ideas for building a better future.
The initiative is Google’s latest to try to shake up how news is presented onlineâand it demonstrates again that despite some of the rhetoric the company is working closely with publishers. In September, the company unveiled another …
Sony has confirmed that PSP Minis will be compatible with the PlayStation 3 from December 17. The next PS3 firmware updat…
Tuesday, December 08, 2009
Cap-and-Trade Is Not a Jobs Program [Greg Pollowitz]
Josh Barro of the Manhattan Institute has a good analysis of the recent “Green” summit at the White House. His conclusion:
But whatever it is, Cap and Trade is not a jobs program. This should be obvious. If the Obama Administration argued that we should further complicate the tax code, so as to create more jobs for lawyers and accountants, they would be laughed out of the room. The fact that people must work harder to comply with new regulations is a cost of such policies, not a benefit.
The Administration’s upside-down approach to job creation isn’t limited to the Green Jobs mirage. In his opening remarks at the jobs summit, Obama once again hailed Cash for Clunkers as a success the Administration should build on for future job creation. The program was a “success” inasmuch as the government successfully got consumers to accept $3 billion in free money. It was not a cost-effective economic growth or job creation measure — in fact, Edmunds.com estimates that it cost taxpayers $24,000 for every new car sale generated.
Not every idea advanced at the summit was bad — participants talked about the need to simplify regulations, improve American tax competitiveness, and increase openness of foreign markets. Even President Obama admitted that “true economic recovery is only going to come from the private sector.” But if Obama realizes the private sector must lead the recovery, why is he proposing to burden it with more taxes, more government spending, and more regulation? True economic recovery will only come when the Administration realizes that regulation does not create jobs.
12/08 10:05 AMShare
Tuesday, December 08, 2009
Cap-and-Trade Is Not a Jobs Program [Greg Pollowitz]
Josh Barro of the Manhattan Institute has a good analysis of the recent “Green” summit at the White House. His conclusion:
But whatever it is, Cap and Trade is not a jobs program. This should be obvious. If the Obama Administration argued that we should further complicate the tax code, so as to create more jobs for lawyers and accountants, they would be laughed out of the room. The fact that people must work harder to comply with new regulations is a cost of such policies, not a benefit.
The Administration’s upside-down approach to job creation isn’t limited to the Green Jobs mirage. In his opening remarks at the jobs summit, Obama once again hailed Cash for Clunkers as a success the Administration should build on for future job creation. The program was a “success” inasmuch as the government successfully got consumers to accept $3 billion in free money. It was not a cost-effective economic growth or job creation measure — in fact, Edmunds.com estimates that it cost taxpayers $24,000 for every new car sale generated.
Not every idea advanced at the summit was bad — participants talked about the need to simplify regulations, improve American tax competitiveness, and increase openness of foreign markets. Even President Obama admitted that “true economic recovery is only going to come from the private sector.” But if Obama realizes the private sector must lead the recovery, why is he proposing to burden it with more taxes, more government spending, and more regulation? True economic recovery will only come when the Administration realizes that regulation does not create jobs.
12/08 10:05 AMShare
The need for a green revolution is here! The International Day of Climate Action in October, along with this week’s beginning of the Copenhagen United Nations Climate Summit, is the start of the global revolution. While reports are that no official binding progress will occur during this meeting, what is guaranteed is that people are paying attention.
Cap and trade is a scheme being bounced around by many people for a quick solution to our climate crisis. This system needs to have a thorough review process before we sign the dotted line, not just in our own country, but as a world in agreement.
Watch “The Story of Cap and Trade” (from “The Story of Stuff”) for an easy-to-understand guide as to why cap and trade is bad for climate change and our economy.
Video after the break:
Like Paul Krugman, I am puzzled by James Hansen’s piece in the NYT attacking cap and trade. Hansen writes:
Because cap and trade is enforced through the selling and trading of permits, it actually perpetuates the pollution it is supposed to eliminate. If every polluterâs emissions fell below the incrementally lowered cap, then the price of pollution credits would collapse and the economic rationale to keep reducing pollution would disappear.
Eh? If the system succeeded so well that emissions came in below the cap, that would be a problem? If cutting emissions is the goal, I can think of worse. And in that case, anyway, couldn’t you just lower the cap?
Hansen explains his objection in even simpler terms:
Still need more convincing? Consider the perverse effect cap and trade has on altruistic actions. Say you decide to buy a small, high-efficiency car. That reduces your emissions, but not your countryâs. Instead it allows somebody else to buy a bigger S.U.V. â because the total emissions are set by the cap.
Or consider the salutary effect cap and trade has on selfish actions. Say you decide to buy a big SUV. That increases your emissions, but not your country’s. Instead it obliges somebody else to buy a small high-efficiency car–because the total emissions are set by the cap.
Cap and trade, as Krugman points out, makes the price outcome uncertain (if it is allowed to bind). The carbon tax that Hansen appears to prefer makes the quantity of emissions uncertain. That is why those calling for strong action on greenhouse gases usually prefer cap and trade. Perhaps Hansen’s distaste for a market in emissions–somebody might make some money off this–is confusing him. But a tax would be mediated through a market too, obviously.
I’m for a carbon tax, because I would rather set the price than the quantity. It has other advantages too: it is harder to game and makes international co-operation on climate change easier to arrange. Cap and trade with a price collar, as proposed in the Senate bill, combines desirable elements of both, and might be the best way forward, on economic as well as political grounds.
But Hansen’s article makes no sense at all. Paraphrasing Wegman on the hockey stick, Bad reasoning + Correct Answer = Bad Economics.
They disagreed on whether the legislation currently in Congress has a chance at being passed, and the rate at which climate change is happening.
But the major sticking point was how much cap-and-trade will affect West Virginiaâs bottom line.
The âcap-and-tradeâ system currently being debated in Congress would allow industries to emit a certain amount of pollution. Companies that pollute more would have to buy credit from companies that pollute less. The theory is that companies that can cut back on their emissions will do so in order to save money.
David Hawkins is the director of climate programs at the Natural Resources Defense Council. He says the price of energy will go up. But weâll use energy more efficiently, so he argues ultimately it will cost less.
âAs consumers of fuels, and weâre talking about the consumer standpoint now, we donât actually value how many gallons of gasoline we get or how many thousand cubic feet of natural gas we get, Hawkins said.
âWhat we value is the comfort that we get from that energy. The convenience, the safety. Thatâs what we value. As Amory Lovins likes to say, hot showers and cold beer. Thatâs what we value.â
But Patrick Michaels of the Cato Institute disagrees. He says that the goals set out by cap-and-tradeâan 83 percent reduction in carbon dioxide emissions by 2050âare impossible to meet, so cost is a moot point.Â
âNobody knows how much itâs going to cost because nobody knows how to do it,â he said. âHow do you put a price on something where you donât know what the object that youâre pricing is? Nobody can get you to 83 percent reduction in emissions with todayâs technology.â
The House of Representatives has already passed a climate bill, and proponents
of the legislation are prodding the Senate to do the same.
By now you know that risky derivatives, particularly credit default swaps, are the financial Frankenproducts that caused the economic meltdown.
But here’s something you might not know: Blythe Masters, the woman who invented CDSs, is now turning her genius to carbon trading at JP Morgan. A recent posting on Naked Capitalism shines a light on the danger of a carbon trading schemed centered around derivatives.
In an email to me this morning, Marshall Auerback noted that Copenhagen is looking like a “big boondoggle for Wall Street.” The climate change conference, he noted, is “dressed up as being wonderful for the environment, much as financial deregulation was celebrated as the ‘democratisation of credit’.”
Climate change Wall Street can believe in?
