So the newest deal in Washington that 'has to be done right away' is Cap and Trade

The basics of this are as follows;

Companies that use energy are going to be limited on what they can use, let's say 10 energy bucks per day. That's the 'Cap'

If they use 11, then they must buy energy bucks from the government. That's the 'Trade'

So company XYZ has to pay for the right to use energy in this country. Does anyone here need to learn the reality of how a company decides on a price for their product? They take the cost to make it, add the tax and their profit, and that's the price.

So they are going to be forced to buy these energy credits, from the government, and therefore increase the cost to make thier product.

The price of the product goes up. Which means if you the consumer want an XYA company's widget, you will pay an inflated price. This money will make it to the government. In all other instances when you pay money that goes to the government, they call it a tax.

In this case they are pretending they are saving the enironment, therefore you can feel good that you are now going to pay extra for every single thing you buy. Nothing in this bill claims to stop global warming, or even slow it down if it's really caused by humans.

"95% of you will get a tax cut": Obama in December of last year.



BTW every European country that has done the cap and trade has seen dramatic job loses and increased prices, and so far nobody is saying the earth is getting cooler because the people in Spain pay extra for a toothbrush.


Luckily though when the government finds themself in a bit of a shortage financially, they can just decrease the allowed energy usage for all companyies, thereby increasing their take. This will not require a vote to raise taxes, but instead it will require a vote to 'save the planet'.

climate change is a real problem that we have to address.

cap and trade is a bad way to do so.

this is not true.

pretty sure we've been over it.

What if you're company D that uses well under their energy limit and sells their credits to other companies for profits? Do their costs go down and do they then pass that down to the consumer?

Uh, no. Please get the basics right first, THEN post your witty-but-wrong criticism.

But then you have the *actual* cap and trade system, not the "Balloon Guy Fantasy CnT".

Silly boys.

After all these years why would you doubt me.

First, no, company XYQ is not going to make a widget for less energy and pass the savings on because they have to plan for the increase in business when they also use too much energy, so they will build reserves etc. They also will need to hire a team of lawyers and accountants to quatify their energy usage which will cost them money. To prove this ask why company XYZ can remain in business if XYQ is already building the same thing at lower costs.

Second, cap and trade is being done in Europe with disasterous resutls, but I guess it's possible that Pelosi and Reed will run it better, but I think that's a bad bet.

C. I probably mixed in a little hyperbole with my facts in order to save myself the much dreaded excursion into goggle hell and the 500,000 hits my search results would have found. But the basic premise that Cap and trade is bad, is nothing but a hidden tax and will result in lost jobs is pretty much spot on.

5th, In the bill is a provision for money to help the unemployment insurance funds which are going to be taxed with the increases EXPECTED from the results of this bill.

Last, they are running this through with a "We have to get this done right away" for a reason. Because it's worked for them on the stimulus, the bail outs and the spending bills recently, might as well stick with what works.

And finally I haven't heard any of you tell me why Cap and Trade is a good idea, just trying to tear down my bad job of explaining it, which may make you feel warm and fuzzy, but it still leaves you defending something that is horribly bad for this country.

And later I will post links to stories that support me and make you guys look dumber. If that's possible

There is no reason something like this would ever need to be rushed at the 11th hour. It's ridiculous and as needed as TARP was it has set a horrid precedent.

At least it will create jobs....

I think Al Gore needs to let everybody know how much money he has made off this fraud every time he speaks out.....you know a disclaimer.

Edit for obvious reasons

The idea that puny humans hold veto power over the incredible forces of nature is lol.

WE couldnt influence a simple warm front, let alone a tornado or hurricane if we wanted to.

Every volcanic eruption put more greenhouse gasses in the atmosphere than humans have throughout history combined.

Finally, greenland used to be green. Long before we polluted anything. What caused that global warming?



Flame on Macbeth!

Basically, they would have a competitive advantage, driving company A out of business -- more unemployment, less government revenue. So now the govt needs more money, so they lower the caps, driving up prices for company D.

It's such a bad idea it's almost unfathomable that it's not a prank.

Much more fun to just tear down your job of explaining it.

I don't know if CnT is a good idea or not. But the purpose is not to reduce costs. The purpose is to reduce emissions.

Sometimes I think people forget the world is not just an economy. It's a living organism.

yeah, this is pretty much my position. you couldn't persuade me to argue the issue either way, as I just don't know much on the issue.

For over seas. It'll lose more jobs in America.

Well then this living organism is tired of taking the earth's punches without a little payback.

Yea..remember that earthquake in SF?

How about the Katrina storm?

Hey Thanks for making Viruses that adapt and mutate and stuff.

Seems like Global warming is mankinds way of fighting back.

Don't go whining Earth...you asked for it.

well since you are fence sitting, maybe I should ask you if you are ready for $5 gasoline?


Huh?

as long as we continue to stay cool with the saudis, this won't happen

actually I think they could hate us with the fire of a thousand suns and they'd still keep prices under $4

Are you implying that a taxation on a company will automatically cause it to fail? Because I'd argue that there is ample precedent of taxing companies and not having them all fail.

Cap and Trade adds economic pressure to decrease pollution by adding positive and negative reinforcement. Limiting the amount of pollution to me is one of the most obvious roles for government. Since there is very little natural incentive for companies to reduce emissions themselves, but it is widely beneficial for the greater population for them to do so, the government must step in and create artificial pressure. This is the role of government: to create incentives for beneficial actions that have no incentives without government.

Imagine a country with no pollution laws of any sort. It would benefit company A if every other company had no pollution. However, it doesn't benefit company A to reduce its own pollution (the gain for company A to reduce its pollution is offset by the loss it takes in doing so; only when all companies act alike are there real environmental gains). Thus, no company reduces pollution. This is simple game theory; it's basically the prisoner's dilemma applied to companies and pollution. Imagine a scenario where, that if all companies decided individually to have no emissions, the total gain over all companies from this decision is greater than the sum of the individual costs to reduce pollution. Even in this scenario, spontaneous reduction of pollution of all companies would not take place because there is no local path to that equilibrium point. It would take the all companies to act together globally to reach that point; the role of the government is to make these global movements take place.

This is an issue that gets complicated quickly, so let me just say that in theory we could create government mandated economic incentives to achieve the goals we want without too much harm, but that this particular implementation is absolutely terrible, and will cause massive unemployment. It's too much, too fast, and implemented in a way that will lead to more political corruption and market distortions. A more complete discussion quickly turns into a research paper, so I'll leave it there.

You can thank your buddy David Russo and the speculators who manipulate the price of oil for making this no longer as important of an issue.


And most economist that I am referring to would disagree with you.


I hope you are right and gas doesn't get that expensive, because you saying; "I told you so" is much better for this country than me saying it.

What's funniest about this is that you are implying that I should know more about it if I want to talk about it.

But it is almost a 100% certaintity that no representative has read the bill, especially the 300 pages added late Friday night, and they are going to vote to implement it.

Most news stories I've read say that they doubt if either Waxman or Markey, the sponsors of this bill, have read it.

FYI

Here is the Heritage Foundation's take on this bill

Testimony before the
Senate Republican Conference

June 22, 2009

My name is Ben Lieberman, and I am the Senior Policy Analyst for Energy and Environment in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation. The views I express in this testimony are my own, and should not be construed as representing any official position of The Heritage Foundation.

I would like to thank the Senate Republican Conference for extending me the privilege of participating in today's hearing. I'll be discussing the costs of the cap-and-trade approach to addressing global warming and The Heritage Foundation's economic analysis of H.R. 2454, the American Clean Energy and Security Act of 2009 (Waxman-Markey). As you know, the House is currently considering this bill, which is similar to but has more stringent targets and timetables than the Lieberman-Warner cap-and-trade bill that was rejected by the Senate last June.

It is clear that cap-and-trade is very expensive and amounts to nothing more than an energy tax in disguise. After all, when you sweep aside all the complexities of how cap and trade operates--and make no mistake, this is the most convoluted attempt at economic central planning this nation has ever attempted--the bottom line is that cap and trade works by raising the cost of energy high enough so that individuals and businesses are forced to use less of it. Inflicting economic pain is what this is all about. That is how the ever-tightening emissions targets will be met.

The only entities directly regulated by Waxman-Markey would be the electric utilities, oil refiners, natural gas producers, and some manufacturers that produce energy on site. So, the good news for the rest of us--homeowners, car owners, small-business owners, farmers--is that we won't be directly regulated under this bill. The bad news is that nearly all the costs will get passed on to us anyway.

What are those costs? According to the analysis we conducted at The Heritage Foundation, which is attached to my written statement, the higher energy costs kick in as soon as the bill's provisions take effect in 2012. For a household of four, energy costs go up $436 that year, and they eventually reach $1,241 in 2035 and average $829 annually over that span. Electricity costs go up 90 percent by 2035, gasoline by 58 percent, and natural gas by 55 percent by 2035. The cumulative higher energy costs for a family of four by then will be nearly $20,000.

But direct energy costs are only part of the consumer impact. Nearly everything goes up, since higher energy costs raise production costs. If you look at the total cost of Waxman-Markey, it works out to an average of $2,979 annually from 2012-2035 for a household of four. By 2035 alone, the total cost is over $4,600.

Beyond the cost impact on individuals and households, Waxman-Markey also affects employment, and especially employment in the manufacturing sector. We estimate job losses averaging 1,145,000 at any given time from 2012-2035. And note that those are net job losses, after the much-hyped green jobs are taken into account. Some of the lost jobs will be destroyed entirely, while others will be outsourced to nations like China and India that have repeatedly stated that they'll never hamper their own economic growth with energy-cost boosting global warming measures like Waxman-Markey.

Since farming is energy intensive, that sector will be particularly hard-hit. Higher gasoline and diesel fuel costs, higher electricity costs, and higher natural gas-derived fertilizer costs all erode farm profits, which are expected to drop by 28 percent in 2012 and average 57 percent lower through 2035. As with American manufacturers, Waxman-Markey also puts American farmers at a global disadvantage, as other food-exporting nations would have no comparable energy-price raising measures in place.

Overall, Waxman-Markey reduces gross domestic product by an average of $393 billion annually between 2012 and 2035, and cumulatively by $9.4 trillion. In other words, the nation will be $9.4 trillion poorer with Waxman-Markey than without it.

It should also be noted that the costs are not distributed evenly. Low-income households spend a disproportionate share of their incomes on energy, and thus would be hit harder than average by Waxman-Markey. Of course, the bill has provisions to give back some revenues to low-income households, but it is likely that these rebates will amount only to some portion of each dollar that was taken away from them in the first place in the form of higher energy costs and higher costs for other goods and services. Waxman-Markey also disproportionately burdens those states, especially in the Midwest and South, that still have a substantial number of manufacturing jobs to lose, as well as those that rely more heavily than others on coal for electric generation. In addition, because the bill raises energy costs, it hurts rural America much more than urban America. Rural Americans, farmers and non-farmers, spend an average of 58 percent more on energy as a percentage of income than their urban counterparts, and those costs would go up.

In conclusion, it's not surprising that support for Waxman-Markey is heaviest in those parts of the country, the urban centers in the West Coast and Northeast, that are least harmed by it. Even there, the economic damage would be bad enough, but the citizens in the rest of the country and their representatives should really be asking many tough questions about the economic impact of cap and trade. Thank you.

I still don't understand. The purpose is to reduce emissions; I'm sure there will be a cost associated with that goal. Do supporters of the bill claim that it won't raise costs? I assume we have to pay in some way for cleaner air.

conservatives with brains (judging by 2001-2009 this rules out the Heritage Foundation) restrict their argument to the idea that we are giving up TOO MUCH cost for not enough return with this cap and trade bill. That is a valid argument at least.

Conservatives who just say "this is an energy tax disguised as a climate change bill" can safely be ignored.

A few quick points:

One part of the problem is that the government profits from this. What kind of incentives does that provide? Let's see, a hidden tax, paid mostly by the poor, that can be raised whenever we want by calling it "green". Yeah, there's an excellent idea. Couldn't we have the companies profit? Wouldn't that double our efforts at greenhouse gas reduction?

Second, it's too much, too soon. I suppose this is just an argument about matter of degree, but they've really gone overboard this time. I've mentioned him before, but listen to Bjorn Lomborg -- there is such a thing as a price that is too high to pay, where the cost is more than the benefit, and this bill is not just a little past that point, but WAY past it.

Third, we still have to compete internationally, and this bill basically makes us uncompetitive on the world market.

the saudis (and the middle east in general, really) at some point have to worry about innovation. they've actually come out and said on 60 minutes that it isn't in their best interests long-term to drive up the price of oil to the levels we saw last summer.


you really think this one idea could possibly outweigh all of the other terrible ideas the governments around the world are currently employing that make their firms less competitive? I don't.

Don't our ideas of what constitutes a decent standard of living already makes us uncompetitive in the world market? Isn't that the 6 ton elephant in the room that no one ever acknowledges?

But both statements are true. The first is just reasoning for the second.

Man made CO2 accounts for less than .2% of total greenhouse gasses in our atmosphere. If, over the same 30 year horizon, we were magically able to cut human CO2 emissions by 10% (something this bill doesn't even pretend to be able to get close to since we won't be able to even touch developing asia in emissions over the related time horizon), we have reduced the human CO2 impact by .02% at a cost to the US of NINE TRILLION DOLLARS.

This bill is barely tangentially related to climate change. Pretending otherwise is hysterically ignorant.



See if you can try any harder to change the topic. This wasn't quite obvious enough.

I just don't see why we should listen to a tennis player about climate change.

The 2nd statement is a waste of time and assumes all taxes are bad. It is useless without the first statement.

I am not changing the topic; I am introducing a new topic. I am not on trial here so I dont need to change the topic. It's a valid point and one everyone just glosses over or says "stop changing the subject".

I particularly like the part of the bill that mandates before you can sell your house a rerpresentative from greenpeace has to inspect your home and insure it meets evironmental standards before you can sell it.



Only the rep from greenpeace referance is sort of inaccurate, however, who the hell do you think will get the job of enviromental inspector?

No, the second statement doesn't assume anything of the sort. Obviously taxes of some sort are required to fund a government. This kind of tax is horrible though. And by that, I mean a tax predicated on lies, sold as non-tax, that literally erases jobs (see the oil companies relocating overseas) and pushed through with no concept of the consequences.

What exactly are you prosing with regard to "our" standard of living if you're not trying to change the subject?

I am just asking people about a new subject. This is an internet forum not a congressional referendum on cap and trade. You make it sound like I want to shift the focus from cap and trade.....but I dont and have no reason to do so. I just want to see people's thoughts on a different subject. Not sure why that is such a big deal.

I think one of America's intractable problems is that our citizens idea of a livable standard is so much higher than much of the rest of the world's idea of a livable standard and that makes it harder to compete in the global marketplace. I wanted to see if people agreed, disagreed, etc.

Obviously, cap and trade bothers you and you want to just discuss that. That's cool.

Our desire for a high standard of living is because the working man fought for his share of the pie from The Man. We got our share, and now live better than anyone in the world.

The rich man will always do well in every country and almost every government.

Only the poor man can rise himself up out of the mire of poverty to achieve a standard of living that is envied the world over.

You may be okay with pushing the working man back down.

We republicans are not.

Where did I say that I thought the answer was to make poor people accept a lower standard of living? I merely pointed out the problem; I certainly dont think the solution is to go backwards.

I may have just responded seriously to a joke post.

They also have publically stated they are against terrorism, while giving them multi-millions of dollars in 'protection' money for decades.

Don't be so confident in what a fragile monarchy declares in public.

I had to think about this for a while, but I think the answer is that yes, because we are rich and demand high standards of living, we are non-competitive in certain areas. (Of course, we are rich because we are competitive, so it's a feedback loop). The areas most affected are those in which manual labor is required and automation is more difficult or expensive.

On the other hand, we compete quite well in areas that require high levels of technological competence.

As this relates to cap-and-trade, what it means is that the jobs at the edges of our competence will move overseas. Companies have to weigh a lot of factors, such as the chance that the business environment here will return to favorable, the productivity in the new area, the cost of moving, the chance that the new country will become unfavorable, etc. The US does have a huge advantage over most countries in that we are stable and have rule of law and a tradition of strong property rights. Those can outweigh a lot of other costs.

On the other hand, our corporate tax structure is not competitive, and Obama wants to make that even worse, and this tax-disguised-as-green that is cap and trade will also make it way worse.

So your stament above was not an opinion that the workingman in this cou ntry have slit their own throat?

You should get a job as a laywer, you never know what you really mean when you say something.

Yeah, I kind of want to discuss cap and trade in the cap and trade thread.

To your point though, I have been all over europe and don't consider my standard of living to be significantly better than that of a similarly educated professional in any other developed country I have visited, so I'd love to know specifically what you're referring to.

Obviously it's higher than those of developing countries / those countries who have spent decades under dictators and socialist regimes, but I think that's a tick in the ol' W column for the US and canada.

while I would definitely agree that the world is full of people doing things counter to their own best interests, I think it is quite obvious that the Saudis do not want the world to be motivated to find a new source of fuel.

I get your point, but this isn't something we had to hear from them. they cease to be relevant the moment something cheaper comes along.

No, you are just assigning me a point. My point was that America, as a whole not just the working-man, is in many ways a victim of its own success and that emerging countries can exploit that. (See, I am making a similar point to the one you assigned me but it is framed differently than yours----conservatives are excellent at framing things to make people look uncaring, unpatriotic, etc.)

As Naked Cowboy points out, that's mostly a good thing overall in grading our past (as an aside was it so hard to give your thoughts on a new issue? does it really matter this came up in the cap and trade thread? I can see why you scored where you did on the authoritarian scale). But we should recognize it as we move forward because it is an issue.


Thank you Henry for the usual thoughtful response.

Or when Israel starts slant drilling with ernest....



ONE TIME

Since they can already exploit it, why should our elected officials make it easier for them?

And why would you bring this up in a discussion about the very bill that in facts makes countries that will have zero standards for emmisions have the opportunity to undercut our manufactering AND increase the pollution levels in the world because of a bill designed to 'reduce pollution/CO2 emmisions'?

I brought it up because it popped into my head reading someone's post. I suppose it does have some relevance to the discussion though that was not my agenda.

fwiw, I will restate that I think cap and trade is a bad plan.

But you think a black working man with a TV and a cell phone is worse?

June 26 (Bloomberg) -- America’s biggest oil companies will probably cope with U.S. carbon legislation by closing fuel plants, cutting capital spending and increasing imports.

So it turns out this is a hidden tax that will cause massive unemployment? Boy, if only someone could've anticipated this, maybe it could've been prevented.

Oh, my turn, my turn:

So it turns out that a bill aimed at reducing carbon emissions will end up hurting oil companies. Who could have possibly seen that one coming?

If it were only oil companies, then it would just a normal bad bill. It also hurts consumers, employees, and the economy. That pushes it into the really terrible category. I mean really, to cause that kind of economic destruction during a long recession? Who does Obama think he is, FDR?

Oh yeah, right.