Notes from the Global Warming Debate on Capitol Hill
Senator Boxer lets the cat out of the bag
By blackhedd Posted in Boxer | Cap-And-Trade | Congress | Economy | gasoline taxes | warner-lieberman — Comments (26) / Email this page » / Leave a comment »
There is some wire-service reporting out this morning (here and here) on the Congressional debate over the Warner-Lieberman bill. This is the legislation that would increase the Federal gasoline tax from its current 18.2 cents a gallon to 53 cents by 2030. (Any bets on whether we’ll still even be using dollars by then?)
Much more importantly, this bill would mandate a “cap-and-trade” regime for industrial emissions of greenhouse gases. This is similar to what Europe does now, but the plan differs in key respects.
Prospects for this legislation are poor, as even co-sponsor Joe Lieberman (?-Connecticut) acknowledges that it’s unlikely the Senate will have the votes to override a promised Presidential veto or even to shut off debate.
Senator Boxer (D-California) is getting credit as the architect of the legislation. That little Republican you see way up on the ramparts taking the spears and arrows and hollering ”Noooooo!” is Mitch McConnell of Kentucky.
Keep reading…
In brief, the idea behind cap-and-trade is to strictly limit, by law, the total amount of greenhouse gases that may be emitted as a result of business operations in the US. The amount would scale each year, with the final target in 2050 for emissions to be 65% lower than they were in 2005.
So how the heck do you do that? You can’t just go around and negotiate a legally-binding target with every business in America. So cap-and-trade issues “permits” that are like chits allowing you to emit so much and no more. And you can sell the permits to other companies, if you have more than you need.
This is why the initiative is called “market-driven” by its supporters. You basically hand the problem back to the people and let them figure it out. Since everyone knows markets are magic, the environmental Left is fully expecting that cap-and-trade will unlock the creative genius (and greed) of American entrepreneurs, who will suddenly have the incentive to produce alternative energy sources, and/or find ways to run the economy without using so much energy in the first place.
Now, if you hang around large corporations like I do, you know that lower emissions and better conservation strategies are already the holy grail, and have been for years. There is so much commercial benefit to be gained from solving this problem that the smartest people in the world are already fully engaged, with or without a “market-based incentive” from Congress.
But forget about that. Senator Boxer more or less let the cat out of the bag, with this comment quoted by the Reuters:
"Just when we finally have a chance to get off of Big Oil and foreign oil, you can count on the Bush administration to fight us every step of the way.
So the objective is very straightforwardly to do damage to the domestic oil industry (which employs a lot of people and pays a lot of taxes) as well as the foreign industry, and simply use less oil.
If you really hate gasoline so much, wouldn’t it be ever so much easier to simply tax it at a punitive level? Add a $4/gallon Federal tax, which would put our gasoline prices up to European levels. That would certainly have the effect of kicking domestic energy companies in the teeth.
But Boxer is being confusing (and possibly disingenuous too). She talks about “getting off of Big Oil,” (which primarily supplies motor transport), but the real target of the cap-and-trade legislation is American industry itself.
I’m going to leave it for another post to do an economic analysis of cap-and-trade and a comparison with how the Europeans and the Asians have done it. But for now, I’ll note that cap-and-trade is very unlikely to release a new pulse of private-sector alternatives-and conservation research.
Rather, it will simply have the effect of making the United States a high-cost industrial zone.
You’ve already heard me and others rant about how relatively-high taxes on business profits, exports and capital gains make the US less globally competitive. Cap-and-trade is yet another giant step in the wrong direction.
By far the easiest and most efficient way not to be slugged with higher production costs under cap-and-trade, is to move production overseas. That would be the nearly-instantaneous effect of this legislation.
-Francis Cianfrocca (“blackhedd”)
Notes from the Global Warming Debate on Capitol Hill 26 Comments (0 topical, 26 editorial, 0 hidden) Post a comment »
When will we ever learn? The attacks on big tobacco just raised cig prices and the billions in fines never quite made it to anti-smoking campaigns. The money slipped into the general funds for the most part. Just another government scam.
The government oil scam will be not much different.
Ask not what I can do for my country, ask what my country can do for me. Washington Elected Elite
And we'll all be doomed. Not by the phoney AGW of course, but by the sheeple that bought the hoax.
Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other. --- John Adams
Right when Americans are paying record prices on gasoline, the Democrats are sponsoring a bill to further RAISE gas taxes, and the Republicans are no where to be found. The Republicans should be on every news channel tonight talking about this idiotic bill. INCLUDING THE PRESIDENT!
It is a political life-line and the Republicans are too stupid to realize that it exists.
Problem is, no one is paying attention. All the coverage is on the other side.
on this one. You can bet if he was standing with Bush (okay, McConell since it's election season and he doesn't really want to be next to Bush) the media would be playing it up because they think he could be smeared with opposition to saving the planet.
An old story:
The frog is satisfied, and they set out, but in midstream, the scorpion stings the frog. The frog feels the onset of paralysis and starts to sink, knowing they both will drown, but has just enough time to gasp “Why?”
Replies the scorpion: “It’s my nature…”
Democrats are the Scorpions. Republicans are the Frogs.
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Dependence is Slavery.
Now, if you hang around large corporations like I do, you know that lower emissions and better conservation strategies are already the holy grail, and have been for years. There is so much commercial benefit to be gained from solving this problem
Such as?
Unless one concedes humanity-induced global warming and a nearing of peak oil, i.e. sustainability issues, what is the commercial incentive? Sure, environmental fears create a market for green technology, but your statement seems to suggest the impetus would be there even if the issue didn't exist. Obviously ever-increasing efficiency and sustainability are desirable - but lower emissions?
PROFIT!
Lower emissions translates as lower costs and higher profits. More conservation translates as less consumption of raw materials, therefore lower costs, therefore more profit. That's true regardless of the scaremongering greenies enage in.
Of course less raw material consumption helps the bottom line, but that has little to do with "going green" in the sense that the doomsday prognosticators mean, which is why I tried to steer my question away from an efficiency argument.
And since when do lower emissions translate to lower costs? It clearly costs more to implement emission reduction technology than to let waste freely escape.
That's two items for you right off the bat.
Don't underestimate the value of PR to a large commercial enterprise. I could coherently argue that brand equity is most of the value of a large business, especially in a globalized world in which nearly all the production factors (even the finance) are commodities.
Anyway, when was the last time you filled out an RFI or RFP for a global corporation? Every single one I've done this year has asked about green technology.
Brand equity is just as important in Washington. They don't do crap but throw in some good PR like interrogating oil company execs to keep up their image.
Ask not what I can do for my country, ask what my country can do for me. Washington Elected Elite
The positive press is very important, but its value is a result of the global warming mindset creating a demand for such technology. My question was whether you were suggesting that there is commercial incentive to go green (e.g. lower emissions) independent of the "GW culture", in a vacuum so to speak.
Preservation of market share is. You're always looking for ways to insure that the customer's next spend goes to you. Having a green image can be an extremely important part of that.
There's another aspect of business that matters a great deal to large companies, which is forestalling adverse government action. If you can present yourself as going out of your way to be green, you can make a case that the government shouldn't force you to do it.
I can tell you for an absolute fact that business doesn't need cap-and-trade as an incentive to become more green. And I can also tell you for sure that the primary strategy for becoming more green will be to ship polluting industries overseas (along with the jobs).
It's a relatively underdiscussed article of faith on the Left that you can generate a substantial amount of economic value simply in the effort to find more green ways of doing business.
They couldn't be more wrong about that. All of that activity goes onto the cap-ex part of the balance sheet. It's not revenue-generating activity, and it can only be done at the expense of other investments.
I also read somewhere (sorry, don't remember where) that the bill allows, in the later years, the government to auction permits. Not sure what "auction" means. However, does anybody believe this auction would be handed over to a private entity to administer?
The problem is: the Republicans don't have a real alternative to cap-and-trade. Saying AGW doesn't exist is not a winning strategy; Al Gore has convinced too many people that it is real. And even if AGW does turn out all to be a fraud, the fact of the matter is, we still have an obligation to be good stewards of the earth regardless of the particular environmental problem at hand. Newt Gingrich has it right: standing on the sidelines and yelling "No" whenever a liberal advances a big-government environmental scheme just doesn't work for us.
Raise CAFÉ and let Michigan die a twisting, horrible and well deserved death. Charge a federal auto registration tax based on the state and car model. SUVs in CA would top the tax, followed by NY & DC.
I'm sure we can come up with more. Like a really "progressive" tax on the fuel and fertilizer used to grow corn for ethanol production that more than offsets the handouts we give the bastards.
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CongressCritter™: Never have so few felt like they were owed so much by so many for so little.
Let's be really clear about something: there is a so-called "developing" world out there that will on no account curb their greenhouse emissions. Even if we turn out every light in America and permanently garage every car and truck, the total amount of greenhouse emissions will increase many times from today's levels in the decades to come.
Therefore, your desire to be a good steward, while laudable, amounts to nothing more than a moral position, not a practical one. If global warming is real, then the earth will inevitably warm as China and India industrialize, and the only thing we will gain by cutting our emissions is the ability to say "Well, it wasn't our fault things got worse."
Now having said that, there's something else to consider. Unlike most countries (including China and India), our industrial production is relatively efficient. The reason we consume so much energy per capita is primarily because we (and the Canadians) drive long distances in big vehicles, compared to the rest of the world.
I've come to be quite convinced that we can drive a whole lot less, without severely decreasing our production of goods and services. And we are more or less uniquely in a position to do so.
That's why I'm not in favor of cap-and-trade. In a US context, it's solving the smaller part of the problem rather than the larger one. If we're serious about achieving the moral victory of reduced carbon emissions, then the right approach is a federal gas tax of at least $4/gallon and probably more.
(1) eliminate the FICA tax entirely
(2) fund social security from a BTU tax on fossil fuels
It would have to be a pretty big tax.
(you would still keep records of earnings)
"Nothing works like freedom, Nothing succeeds like liberty"
Kyle
It's about the size of the entire energy industry already, if not bigger. Unless your BTU tax is going to be 100%, the numbers don't work.
It's a clever idea, though.
;-)
Solves the social security problem
As a fuel they are carbon neutral
finally deals with over population
For those that are impaired that was sarcasm.
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
winning strategies either . . . until they were.
Arguing for clean air and water---yes.
BUT ARGUE LIKE HELL AGAINST THE IDEA THAT CO2 IS A POLLUTANT.
There are plenty of ways to successfully argue against global warming.
It's June 3rd, I'm south of the 45th parallel and yet I had to turn on the heater this morning (high of 61 today, heat wave!). Thankfully we're going to Vegas tomorrow and it's supposed to be sunny and hot there.
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Just like PayPal, except it's free and a $25 bonus to sign up!
It's 57 here in MN. If someone sees Gore popping his head out of his fox hole I want to talk to him.
Ask not what I can do for my country, ask what my country can do for me. Washington Elected Elite
There is no way to present this to the American people in any way that they will come anywhere near approving this.
Currently the Democrats are perceived as being better on the economy than us. A few dozen commercials pointing out the Dem Damage to the economy will cure that (Thanks Haystack That was a beautiful graphic show the cost of the democrat majority)
Toss in immigration and and a few of the culture issues and they are done. BYE BYE SAN FRAN NAN.
"Those who expect to reap the blessings of freedom must, like men, undergo the fatigue of supporting it."
-Thomas Paine: The American Crisis, No. 4, 1777
Boxer wants to get off big oil about as badly as the Dems want to get off big Tobacco! To say they "talk out of both sides of their mouths" when they want to kill these industries while swilling in the taxes they generate is the kindest description I can give. Their real intent is to create another group of corporate boogeyman that the American voter will allow them to tax with impunity.