That was too easy

The e-mails started arriving in mid-May: “Contact your representative,” various industry groups and advocates urged. “Tell them you oppose Lieberman- Warner.” That was the working name for “America’s Climate Security Act of 2007,” a Congressional solution to global warming. Never mind the substance or severity of the global-warming “problem”; we may never have definitive proof that the earth is getting dangerously warmer due to human activity. No, the contents of the proposed legislation would have created all new problems for U.S. citizens, particularly with citizens who work in manufacturing industries.

The core of the proposal was a nationwide scheme for capping “greenhouse gas” emissions and penalizing violators that exceed their carbon allowances. At the same time, the program would offer “credits” to non-violators, which they might sell to violators who need to offset their excess emissions. It’s difficult to identify what’s most objectionable about such an approach, but let’s agree that there’s something shady about a government profiting by forcing individuals (or companies) to buy a product (carbon credits) that they need only because the government made it illegal for them not to buy it.

As an economic prospect, this cap-and-trade scheme is even more plainly wrong-headed. Proponents of capand- trade — who include both major parties’ presumptive nominees for President — believe that carbon credits will create the incentive for manufacturers and businesses to adopt clean-air technologies, thereby diminishing industry’s impact on global warming. These proponents make two important mistakes.

• First, they assume manufacturers fail to adopt control technologies because they simply don’t want to do it. In fact, such technologies may not be adopted for various more logical reasons: they aren’t proven, or they aren’t effective, for example, or they have unintended consequences, or simply are not affordable.
• Second, cap-and-trade proponents assume that the “market” they create would function according to ordinary free-market behavior. More likely, the artificial “demand” would lead to some irrational behavior. Some manufacturers may relocate to Mexico or other locations where the overall operating conditions would be more congenial. Or, they may simply go out of business, conceding their market share to other manufacturers, or importers.

But it doesn’t matter now. The cap-and-trade proponents withdrew their proposal soon after the debate began. They could not justify the potential cost (one estimate is $6.7 trillion per year) to U.S. taxpayers, in terms of lost production or higher consumer prices. The debate never even got to the point of examining the cost of the inevitable compensation programs that would have been used to cushion the blow to the most seriously impacted states or industries.

Cap-and-trade proponents undoubtedly feel they are offering a solution to a problem that concerns many Americans. Their proposal, however, would exacerbate other, more critical problems — manufacturing competitiveness and energy supplies, to name just two.

Such details ought to get more attention once a new cap-and-trade proposal arrives, which will happen because so many elected officials still support the concept as a response to global warming. Ideas like this need more confrontation, in order to be effectively defeated.

TAGS: Testing/QC
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