Cap And Tax: Some Will Win, Most Will Lose, Follow The Money
I have always been skeptical, to say the least, about the man-made global warming theory. To those of you who are familiar with my comments and posts over the past several months, this will come as no surprise. Aged-P posted today on this topic and discussed how the facts don’t match the theory. There are, literally, thousands of scientists who dispute the man-made global warming theory. You can read more on this here and here.
The earth’s climate has been changing for millions of years. The climate cools and we enter an ice age. It then warms, the glaciers melt, and we leave the ice age. This cycle then repeats itself over and over. In short, there is no evidence that climate change is being caused human carbon dioxide emissions or anything else we’re doing. These natural climatic cycles have been going on for millions of years, long before we burned our first lump of coal or gallon of gasoline.
So, given the fact that man-made global warming is in fact not occurring, why do some, such as Al Gore, continue to promulgate this nonsense as fact? There are basically two reasons for this as far as I can tell. First, many believe the entire concept is a hoax designed to curtail or entirely eliminate freedom and private property rights. Economist and current Czech President Václav Klaus is one of the leading proponents of this point of view. Many of those who previously were advocates of global socialism in the ‘70s and ‘80s have found a new home in the global warming movement. Here is a video of Klaus addressing the UN on the topic of freedom and climate change:
The second, and perhaps easier to explain, reason global warming enthusiasts continue to promote a false theory has to do with cold hard cash. In other words, follow the money. Global warming is big business. Yesterday, Jeff Immelt and John Doer wrote an article in The Washington Post in which they wholeheartedly support Obama’s cap and tax plan. Both of these individuals, not coincidentally, are on Obama’s Economic Recovery Advisory Board.
In the article, Immelt, who is CEO of General Electric, makes the following ludicrous claim when discussing China and “clean” energy:
We are clearly not in the lead today. That position is held by China, which understands the importance of controlling its energy future. China’s commitment to developing clean energy technologies and markets is breathtaking.
In the rest of the article, Immelt and Doer essentially promote Obama’s cap and tax plan as vital to stopping man-made climate change and maintaining superiority in green technology. Despite mentioning China as their model clean energy economy, they neglect to mention the fact that China doesn’t support cap and trade as mentioned above. They also omit the fact that even Obama’s own EPA admits cap and trade won’t work.
The real reason Immelt supports the cap and tax scheme is self-interest. Mr. Immelt’s General Electric stands to make billions on Obama’s plan, as noted in the following post in The Common Conservative:
Under the Obama plan, the “cap and trade” credits will be issued to all producers of energy. GE is the largest manufacturer of wind turbines as well as other electrical generation turbines used in coal, gas, atomic, and hydroelectric electricity generation facilities. With the Obama plan, those cap and trade credits would be issued by the Federal Government, and ultimately, traded just like any stock or bond. GE has apparently, created and entire unit with the Corporation that would deal in the Secondary Market trading these credits. First, they are going to take in billions of dollars from government contracts in wind energy. Second, they perhaps are going to have exclusive control over the secondary market for these cap and trade credits. That, in effect, puts GE in the catbirds seat for all energy produced in this nation as ALL “carbon emission” energy sourced are going to be subject to these carbon schemes. This includes ANY oil related, natural gas related, gasoline, diesel, and any other manufacturer that uses any petro-based component. That means every single plastic container, every car, every chemical fertilizer, every pesticide, every single thing you use will be subject to this scheme as it too, is made from a carbon based material.
Read the whole post here. In his Washington Post op-ed, Immelt also makes the false claim, debunked in an earlier post, that cap and trade will create jobs.
Today, in American Thinker, Michael Economides and Peter Glover published a well-documented article which essentially notes that the adoption of cap and trade is nothing but a leap of faith with no theoretical basis in economics or science:
Creating ex nihilo — literally, out of nothing — used to be a theological concept, God’s prerogative. Today it seems, President Barack Obama and certain Western politicians claim to possess the ability to do it. Against all the laws of economics and the marketplace, they believe they can create millions of ‘green’ real jobs, out of thin air, or at least air without carbon dioxide, via cap and trade.
Economides and Glover go on to highlight the economic reality that investment will not follow inefficient and unproven technologies unless the government forces the issue:
The basic assumption is that technology per se generates jobs. Mostly, it does not. Rather, technology enables jobs — real and sustainable jobs — based on how useful the technology is to the marketplace. To generate real industrial jobs, however, one needs a basic commodity to trade, and in the energy business this has meant oil, gas or coal. Yet ‘green’ politicians and eco-lobbyists expect to create a revolution in green jobs based on … alternative energy sources. The trouble is that alternative energy sources remain and will continue to be appallingly inefficient, offering a very poor to mostly negative return on investment. Cut off the flow of massive public subsidies and the alternative energy industrial revolution would grind to a halt tomorrow — as the European experience already bears out.
Next, the authors point out that Europe, Obama’s shining city on a hill, are not having any success at all in implementing their own cap and trade schemes and are backing away from them as the plan’s true cost becomes apparent:
It’s a shame that members of the US Congress that voted for the recent Cap and Trade Climate Bill did not bother to check up on the economic realities which are causing European states to back away from expensive alternative energy commitments and the ‘green job’ creation schemes associated with them by inserting all manner of substance-emptying ‘get-out’ clauses into EU cap and trade plans.
Germany’s Angela Merkel has already insisted on major exemptions for German heavy industry come December’s ‘definitive’ global climate summit in Copenhagen. Bizarrely, for a so-called ‘Green Chancellor’, Merkel’s government is also supporting the building of 26 new coal-fired power plants across Germany. Hardly the domestic agenda of a low-carbon ‘green jobs’ economy. Italy also rocked the EU climate boat by insisting on exemptions for its own energy-intensive industries at the turn of the year. Most significantly, it is an exemption that requires the EU to renegotiate Europe’s entire climate policy after the UN summit in December — effectively, giving Italy a veto. A veto it will use if, as expected, China and India and others exempt themselves from binding targets. In June, deputy head of Poland’s Solidarity trade union, Jaroslaw Grzesik, estimated that the EU’s climate policy would cost 800,000 European jobs. The think-tank Open Europe has already estimated that the same policies will cost the UK $9 billion a year, leaving an extra 1 million people in fuel poverty by 2020.
Next, Economides and Glover cite a study by Universidad Rey Juan Carlos which came out in March 2009 which specfically addresses job creation:
Cited as a role model, Spain is the only country to have produced an in-depth analysis of the impact of renewables on the jobs market. The Study of the effects on employment of public aid to renewable energy sources was published by a team at the Universidad Rey Juan Carlos in March, 2009. Though it grabbed a few headlines in the spring, it was largely ignored by the mainstream press. Yet it is the most intensive review of the impact of a state-aided green job creation policy available. Here are just a few of its key statements suggesting why the state should stay the heck out of manipulating the job creation market:
The report cites key examples of resulting "massive unemployment, loss of capital, dismantlement of productive facilities and perpetuation of inefficient ones" the direct result of, "the arbitrary, state-established price systems inherent in ‘green energy’ schemes." The report concludes, "Policymakers must recognize that because of government action, other jobs are not created." And, most significantly for international consumption, "These costs do not appear to be unique to Spain’s approach but instead are largely inherent in schemes to promote renewable energy sources."
Finally, Economides and Glover conclude with the following:
President Obama maintains his planned 5 million new jobs will cost the taxpayer $30,000 per job. Bad enough, we might think. But The Center for American Progress, whose CEO headed-up Obama’s transition team, calculates it would take government spending of $100 billion to create 2 million green jobs. That’s a cost to the taxpayer of $50,000 to create a single "green job". The Apollo Alliance, whose founder served on Obama’s campaign, calculates it would take $500 billion to create 5 million jobs. That’s a mere $100,000 per green job created.
Worrying about others "surging ahead" no longer matters once you realize it’s along the fast-track to economic suicide. Green jobs? It’s not good for the economy, stupid.
Read the entire Economides and Glover piece here. There are some very interesting statistics on how much each green job costs.
Despite how frantically the left, lead by President Obama, want us to believe it, cap and trade will be nothing but a huge anvil placed around the neck of our economy. There will be a few isolated winners, such as GE, but mostly there will be losers. Obama is increasingly demonstrating his naiveté when it comes to all things economic.
Governor Palin, in her Washington Post op-ed a couple weeks ago, saw cap and tax for what it is, an enormous quicksand into which Obama wants to place the U.S. economy:
I am deeply concerned about President Obama’s cap-and-trade energy plan, and I believe it is an enormous threat to our economy. It would undermine our recovery over the short term and would inflict permanent damage.
American prosperity has always been driven by the steady supply of abundant, affordable energy. Particularly in Alaska, we understand the inherent link between energy and prosperity, energy and opportunity, and energy and security. Consequently, many of us in this huge, energy-rich state recognize that the president’s cap-and-trade energy tax would adversely affect every aspect of the U.S. economy.
It is clear that cap and tax will benefit the few at the expense of the many. Unfortunately, the few who will benefit are driving most of the current debate and thus their voices are drowning out those, like Governor Palin, who are trying to warn us of the economic misery that would accompany cap and tax should it become law.