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PrintJune 26, 2009
Cap-and-trade: The biggest scam of all
It is truly amazing that anyone really familiar with the so-called cap-and-trade bill could actually accept this legislation or in Congress, vote for it.
First, it is erroneous to think that it would have any effect on global warming because carbon dioxide is not the cause, it is the effect but unfortunately that battle won in the halls of science is lost in the halls of congress.
Second, it is also erroneous to say that the bill would cut U.S. greenhouse-gas emissions because most "greenhouse-gas emissions" are water vapor - carbon dioxide is a relatively small portion of such emissions.
The House bill is falsely alleged to cut U.S. greenhouse-gas 17 percent below 2005 levels by 2020 and 83 percent by 2050. It would also establish a new Renewable Electricity Standard (RES), which would force utilities to supply a minimum amount of their electricity from renewable energy sources. The result will be: (1) everything used by the public will increase in price because of increased costs to producers from the need to acquire "carbon credits" for their operations will be passed on to consumers and, (2) requiring utilities to change their the means of power production from whatever is being used now to "renewable energy sources," however defined, will necessarily increase the cost of electricity to homeowners because new "sources" will be more expensive to use that currently used fossil fuels.
The bill supposed to result in achieving carbon-dioxide emission targets by establishing a cap-and-trade system, which would require heavy emitters of carbon dioxide, and the oil and gas industry, to buy annual emissions permits from the government or through a secondary market. It is not rocket science to understand that any money spent on acquiring "annual emissions permits" is simply another expense of utilities and by law and public utility regulations in all states public utilities are guaranteed to earn minimum profits since they are regulated monopolies. In order to "earn" their minimum profits, the cost of electricity to consumers, residential and commercial, has to be increased.
The plan, as written by the House Energy and Commerce Committee, would auction a small percentage of the available permits, or allowances, directly to companies. The rest, more than 85 percent, would be given away to selected industries, local utility companies, states and Indian tribes. The idea itself is ludicrous but it would be nice if congress could explain why Indian tribes would be given available permits - surely casinos don't emit much "greenhouse gas", unless you consider cigarette smoke in that category.
Democrats and Republican supporters contended the legislation would help reduce U.S. reliance on foreign oil, increase the use of renewable energy such as solar and wind power and increase employment in clean energy industries. How ridiculous that is. Most oil is used to produce fuel for the transportation industry, cars for example. How will solar power and windmills power automobiles and trucks? Not only that, it has been established that production of renewable fuels such as ethanol consume more energy than produced by the products and also involve substantial emissions of "greenhouse gas," e.g. carbon dioxide. The claim of reducing either reliance on foreign oil or reduction of greenhouse gas is a plain lie.
Obama said "This is a jobs bill" and would increase employment in clean energy industries. There may well be new jobs created but they will be more than offset by the numbers of jobs lost. As manufacturing costs increase businesses will have no choice but to reduce employment as will businesses that depend on those manufactured products. Increased unemployment will also reduce consumer income thereby accelerating the downward spiral of our economy. House Republican Leader John A. Boehner said the bill will cost the economy up to 2.7 million jobs and he may be underestimating the effect.
"When it comes to energy, Washington Democrats, I think, are poised to make matters worse by imposing a job-killing energy tax, courtesy of Speaker Pelosi. This is going to force small businesses and their workers and families to pay more for electricity, gasoline, and other products that are made in America that have high energy content."
The basic idea behind cap-and-trade is simple: Government experts assess how much pollution can be "safely" put into the environment, then shares (sometimes called permits or allowances) equaling that amount are given or auctioned by the government to those who have historically emitted the pollutant. How do you suppose "safe" limits of carbon dioxide can be determined? Will continued emission of carbon dioxide exhaled by us be taken into account?
Polluters then must return to the government enough permits to cover their emissions every year. If they fall short of permits, emitters must buy them from those who have a surplus. The number of permits available decreases annually until a "safe" level of emissions level is reached.
The bill would direct 2 billion free allowances to domestic and international conservation, known as "offsets," which would allow companies to buy emissions permits by effectively paying farmers here and abroad to preserve trees and employ environmental planting practices. I would like to form a business to sell emissions permits by using the money to "preserve trees" by letting them continue to grow; would anyone like to join me?
The legislation would require utilities that provide more than 4 million megawatt hours of electricity a year to buy a certain amount of electricity from renewable sources; thus assuring the cost of electricity will increase.
The amount starts at just 6% in 2012 and gradually increases to 20% in 2020, although utilities could meet up to 8% of the mandate through reduced energy usage by their customers. In other words, the government will figure out some way to make us use less energy (a very broad term) other than by increasing the cost - I wonder what that may me, government controlled thermostats?
Right now renewable energy accounts for about 8.5% of domestic electricity generation, but the House bill's renewable mandate would not recognize all of that as renewable. Hydropower, for example, which makes up a large chunk of current electricity generation, is not all counted as renewable toward the new mandate, nor is geothermal energy.
A new amendment added by speaker Pelosi requires the president to impose trade tariffs on trade partners that do not limit their carbon-dioxide emissions by 2020. To get representatives farm states on board, provisions easing rules on corn-based ethanol production and putting the permit program under the Agriculture Department rather than the Environmental Protection Agency was included.
The bill would have far reaching effects on energy users at all levels of the economy, from giant manufacturers to utilities to individuals. For instance, new government imposed buildings standards would be mandated and some household items will be required to use less energy than they do now. These items include backyard spas, lamps located above art work, drinking-water dispensers and light bulbs in outdoor light fixtures. Are you prepared to live with that?
The bill would force companies to phase out allegedly inefficient products of the kinds described and replace them with allegedly more efficient - and more expensive and less desirable - versions. For example presently used incandescent light bulbs, now costing less than a dollar, will have to be replaced by required compact florescent light bulbs (those curly things), that already cost more and will cost still more in the future when they are the only light game in town.
The bill would also make changes to the government's Energy Star program, which recognizes dishwashers, refrigerators and other appliances that save energy. The tougher standards would mean these "energy saving" products would cost more than regular products and it would take longer for consumers to recoup the extra costs through savings on their energy bill.
"It doesn't do any good to have high-price, energy-efficient products if people will just pay to have their old appliances fixed," said Kevin Messner, vice president of government relations for the Association of Home Appliance Manufacturers.
If you think you can avoid this by repairing older appliances, think again, everything will wear out sooner or later.
Vincent Gioia is a retired patent attorney living in Palm Desert, California. His articles may be read at http://www.vincentgioia.com/ and he may be contacted at gioia@gte.net
