From the Energy Front 070609
Hey folks,
Happy Monday to you. Due to scheduling conflicts, "From the Energy Front" will now be posted every Tuesday, starting next week. There will be no Monday Post. Don't worry, most usually need two days to digest the Big Sunday Edition anyway. {Smile}
Today I'm turning over the "From the Energy Front" Segment to E. Thomas McClanahan, of the Kansas City Star. He did a great job in this piece that ran on the 4th. I have been telling you about all this and how bad Cap and Trade is going to be, but he makes it even easier for some to understand. So without any further comments, I really have nothing to add to this, here is Mr. McClanahan
Democrats say the cap-and-trade bill passed by the House last week will accelerate the transition to an energy-efficient economy. Loads of new “green” jobs will be created in the process.
President Barack Obama says this will be a “driver of economic growth.” Speaker Nancy Pelosi boiled it down even more: “Remember these four words for what this legislation means: jobs, jobs, jobs and jobs. Let’s vote for jobs.”
We pause now for a tactful silence. No need to jeer. The argument is silly on its face, although one might reasonably wonder how anyone could seriously believe this bilge.
What’s more interesting is the change in approach. Up to now, the usual rationale for a carbon cap is that, yes, it would involve economic pain, but we have to understand that the short-term costs would be far less than the dire, long-term consequences of doing nothing about global warming.
Now we’re told there won’t be any economic pain at all. Obviously, the two arguments are contradictory. In fact, Obama’s latest tack is refuted by statements he made earlier this year, when he remarked that under his cap-and-trade plan, “electricity rates would necessarily skyrocket.”
How do you end up with a vibrant economy and lots of net job creation by forcing people to pay higher energy prices? Well, you don’t, and that’s why this measure is one of the biggest threats to the U.S. economy ever to emerge on Capitol Hill.
The legislation, which now goes to the Senate, would impose an overall limit on emissions of greenhouse gases. Industries would then buy and sell permits to emit carbon. Over time, the cap would become more restrictive, reducing CO2 emissions.
The whole purpose of the bill is to force people to pay more for energy. That won’t spur economic growth. It will retard it, by slowing the growth of consumer spending, which makes up the greatest share of the gross domestic product. The result will be lower output and fewer jobs.
The notion that cap-and-trade will do little harm came from a recent Congressional Budget Office analysis that pegged the bill’s annual cost in 2020 at a mere $175 for the average family. (Lower-income households would get a rebate reducing their energy costs by $40.)
The Heritage Foundation pointed out that incredibly the CBO study failed to include in its calculations the overall effect on economic growth. The bill would not only make energy prices go up, but — because energy costs raise production costs generally — it would make the prices of almost everything else rise as well.
Cap-and-trade would be a crippling, self-inflicted wound. Not only that, it would be futile: Without the cooperation of rapidly industrializing economies such as India and China — which say they have no intention of impeding their growth with carbon caps — anything the United States does will have little effect on overall global emissions.
Nor is it likely to work as its authors intend.
Like any commodity, the price of carbon permits will fluctuate, and those price movements could be violent. That will add even more uncertainty to the business of energy production.
In Europe, the recession has caused the price of carbon permits to plummet, lowering permit costs and the cost of using fossil fuels. That has undercut the competitiveness of solar, wind and other new technologies aimed at boosting conservation.
The House barely passed cap and trade — the vote was 219-212. The bill’s prospects in the Senate, fortunately, are grim because the same political dynamic that worked in the House won’t apply in the Senate.
As Jay Cost points out at the Real Clear Politics site, the New York and California delegations provided 26 percent of the support for cap and trade in the House. But in the Senate, those states together make up only 4 percent of the membership.
Thanks to the Senate’s rules, the measure will need at least 60 votes. If Republicans hang together and peel off a few Democrats, which seems likely, they can stop the bill dead in its tracks. For the sake of the economy’s health, they had better succeed.
To reach E. Thomas McClanahan, call 816-234-4480 or send e-mail to mcclanahan@kcstar.com.
See you all tomorrow.
Peter
Sources:
Kansas City Star - Kill cap and trade before it kills growth
Hey folks,
Happy Monday to you. Due to scheduling conflicts, "From the Energy Front" will now be posted every Tuesday, starting next week. There will be no Monday Post. Don't worry, most usually need two days to digest the Big Sunday Edition anyway. {Smile}Today I'm turning over the "From the Energy Front" Segment to E. Thomas McClanahan, of the Kansas City Star. He did a great job in this piece that ran on the 4th. I have been telling you about all this and how bad Cap and Trade is going to be, but he makes it even easier for some to understand. So without any further comments, I really have nothing to add to this, here is Mr. McClanahan
Democrats say the cap-and-trade bill passed by the House last week will accelerate the transition to an energy-efficient economy. Loads of new “green” jobs will be created in the process.
President Barack Obama says this will be a “driver of economic growth.” Speaker Nancy Pelosi boiled it down even more: “Remember these four words for what this legislation means: jobs, jobs, jobs and jobs. Let’s vote for jobs.”
We pause now for a tactful silence. No need to jeer. The argument is silly on its face, although one might reasonably wonder how anyone could seriously believe this bilge.
What’s more interesting is the change in approach. Up to now, the usual rationale for a carbon cap is that, yes, it would involve economic pain, but we have to understand that the short-term costs would be far less than the dire, long-term consequences of doing nothing about global warming.
Now we’re told there won’t be any economic pain at all. Obviously, the two arguments are contradictory. In fact, Obama’s latest tack is refuted by statements he made earlier this year, when he remarked that under his cap-and-trade plan, “electricity rates would necessarily skyrocket.”
How do you end up with a vibrant economy and lots of net job creation by forcing people to pay higher energy prices? Well, you don’t, and that’s why this measure is one of the biggest threats to the U.S. economy ever to emerge on Capitol Hill.
The legislation, which now goes to the Senate, would impose an overall limit on emissions of greenhouse gases. Industries would then buy and sell permits to emit carbon. Over time, the cap would become more restrictive, reducing CO2 emissions.
The whole purpose of the bill is to force people to pay more for energy. That won’t spur economic growth. It will retard it, by slowing the growth of consumer spending, which makes up the greatest share of the gross domestic product. The result will be lower output and fewer jobs.
The notion that cap-and-trade will do little harm came from a recent Congressional Budget Office analysis that pegged the bill’s annual cost in 2020 at a mere $175 for the average family. (Lower-income households would get a rebate reducing their energy costs by $40.)
The Heritage Foundation pointed out that incredibly the CBO study failed to include in its calculations the overall effect on economic growth. The bill would not only make energy prices go up, but — because energy costs raise production costs generally — it would make the prices of almost everything else rise as well.
Cap-and-trade would be a crippling, self-inflicted wound. Not only that, it would be futile: Without the cooperation of rapidly industrializing economies such as India and China — which say they have no intention of impeding their growth with carbon caps — anything the United States does will have little effect on overall global emissions.
Nor is it likely to work as its authors intend.
Like any commodity, the price of carbon permits will fluctuate, and those price movements could be violent. That will add even more uncertainty to the business of energy production.
In Europe, the recession has caused the price of carbon permits to plummet, lowering permit costs and the cost of using fossil fuels. That has undercut the competitiveness of solar, wind and other new technologies aimed at boosting conservation.
The House barely passed cap and trade — the vote was 219-212. The bill’s prospects in the Senate, fortunately, are grim because the same political dynamic that worked in the House won’t apply in the Senate.
As Jay Cost points out at the Real Clear Politics site, the New York and California delegations provided 26 percent of the support for cap and trade in the House. But in the Senate, those states together make up only 4 percent of the membership.
Thanks to the Senate’s rules, the measure will need at least 60 votes. If Republicans hang together and peel off a few Democrats, which seems likely, they can stop the bill dead in its tracks. For the sake of the economy’s health, they had better succeed.
To reach E. Thomas McClanahan, call 816-234-4480 or send e-mail to mcclanahan@kcstar.com.
See you all tomorrow.
Peter
Sources:
Kansas City Star - Kill cap and trade before it kills growth
2 comments:
As I have said before, “Our Congress is for the most part corrupt.
It’s all about money and control. I did an article a year or so ago that ended with ;
‘ Lot of this carbon nonsense now is up to your choice, but you can bet that they are trying to make it a law. It won't matter if it's true or not for "The debate is over". If that happens you and I will pay for it through taxes, that the government will then give to the Chicken Littles and people like Al Gore, who will get richer at our expense.’
People like these are so obvious it's ridiculus.
Hey D.S.
I remember that. You called it. The one hope I have is people start paying attention the more their money says "Good Bye."
The higher the Gas and Energy costs go, the more people will pay attention. The higher their taxes go, even more people will wake up. I just hope enough wake up while there is still time to slow this down or stop it, before it passes the point of no return.
Peter
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