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How Cap and Trade Plans to Cripple Our Economy

By: Steve Maley (Diary)  |  December 17th, 2009 at 02:15 PM  | 

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If you can’t understand conceptually why a Cap and Trade system is such a bad deal, how about a concrete example?

The European Union is a signatory of the Kyoto Protocols and have been dealing with a Carbon Cap and Trade system for several years. This article in today’s Wall Street Journal shows how the potential profit from the sale of carbon credits directly led to the loss of 1,700 jobs in a British steel plant.

Usually, we worry about the unintended consequences of new, far-reaching regulation. As the article makes clear, however, crippling the economies of the Western Democracies for the benefit of the “developing world” (read: China and India) is precisely the intent of Cap and Trade.

… Corus, Europe’s second-largest steel producer, is shuttering a giant U.K. steelmaking plant at Redcar, cutting 1,700 jobs. Corus blames the recession that has cut steel demand and says the British government hasn’t done enough to help it.

Whatever the truth of that, there’s little doubt that cap and trade made the closure much easier. The decline in steel production means European steelmakers have surplus carbon allowances. According to Carbon Market Data, a European research firm, in 2008 Corus had the second largest surplus of EU carbon allowances—7.5 million.

… By closing Redcar’s annual capacity of three million tons of steel, Corus will produce six million fewer tons of CO2. That means more carbon allowances, which could translate into about $300 million a year if credits hit $50. Corus is essentially being paid to lay off British workers. …

Corus was bought in 2007 by Tata, India’s largest steel company. The Indian steel industry is set to more than double production to some 124 million tons a year by 2011-2012. Were Corus to move production to a “clean” Indian factory, it could receive hundreds of millions of dollars annually from the Clean Development Fund. The kicker is that none of this results in fewer carbon emissions. A Corus plant in India might be more efficient by Indian standards, but it will be no more efficient than Redcar. …

To summarize: Cap and trade is a scheme that would impose heavy carbon taxes and allowances on U.S. industries, which would then have an incentive to move overseas themselves, or to sell those allowances to overseas companies that could use them to become more competitive against U.S. companies. Like the 1,700 Brits at Redcar, American workers would be the big losers.

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  • izoneguy

    http://www.politico.com/news/stories/1209/30729.html

    • 10ksnooker

      For their unjust taxation is a fraud, real trouble ahead.

      • louesc

        If you want to understand there thinking and agenda behind Cap and Trade. Then you need to here Obama explain it then you will understand there true intentions.

        http://www.americanpatriotsprevail.com/Cap_and_Trade.html

        • izoneguy

          Is what will kill his presidency. It’s not Bill Ayers, Rev. Wright, ObamaCare, Immigration – it will be his insistance to regulate & tax American industry to death. Trying to use the EPA has a hammer will only get his thumbs broken. This whole issue is EPIC fail. it is based on corrupt scientists & data and is driven by the global Marxist community.

    • realskinny

      Gore’s anxiety over the temperature down there is understandable.

  • izoneguy

    Again – liberals operate from a flawed sense of logic.

    Future generations of Americans won’t be able to help the really poor people in the rest of the world. The future generation of Americans will be the ones asking for help – and no one will be there to help. Todays liberals are trying to take that ability to help yourself – away.

    • Next93

      Under Cap andTrade, the “developing countries” outside of India and China will be paid to not industrialize, which means that thier biggest single source of income will, ironically, be thier own poverty. And just as ironicall, the “rich” countries will bankrupt themselves in the pursuit of importing said poverty.

      And, just like in this countr, the only people who will reall benefit from this globalized welfare scheme will be the “poverty pimps”, who will reap massive profits by administering the exchange of a commodity that exists only due to government fiat.

      So basically we have a very expensive “solution” that won’t actually fix a “problem” that might no actually exist, but that will have the net effect of eliminating opportunity for billions who are living in crushing poverty, and will do so by outlawing the production of goods and services, while enriching people who don’t actually produce a product.

      Lovely. Can someone tell me when this episode of the Twilight Zone is over?

  • http://www.nighttwister.com NightTwister

    Democrats claim to care about all the manufacturing jobs going overseas. For the life of me I can’t understand how the unions could be backing this nonsense.

  • izoneguy

    THE DOUBLE-D STRATEGY FOR RESCUING AMERICA

    http://www.tothepointnews.com/content/view/3897/2/

    “Should I be elected, I solemnly pledge to my constituents that I will consistently vote to defund, or vote against appropriating any money for, any federal program or activity not specifically authorized by an enumerated power in the United States Constitution. For any federal program or activity I do vote to fund, I will provide the specific enumerated power constitutionally permitting it.”

    The second D: Disobey. Disobey the Ghandi Way. Peaceful civil disobedience. No violence. Just the refusal to obey fascist and unconstitutional laws.

    If the EPA conducts a Carbon Jihad, if the Dems enact a Cap & Tax bill penalizing energy production in the US, it would take no more than 50,000 energy workers to go fishing next winter, shutting down refineries, coal plants, pipelines et al, for the entire east coast to freeze in the dark.

    We don’t need guns, we don’t need violence in any way to rescue America. We just need to say no. No to funding fascism. No to obeying fascism. The Double-D – Defund and Disobey – will save our country.

  • izoneguy

    Inhofe: Copenhagen Has Failed

    http://planetgore.nationalreview.com/post/?q=NjA1NmRmZGRkZjA5OTYyY2RmZTU0OGJmZGNhMDI4YmI=

    EXCERPTS:

    Beyond that, developing countries are demanding billions of dollars from the US and other developed countries to deal with the impacts of climate change. President Obama has offered $1.3 billion in 2010. Developing countries think this isn’t enough; I think it’s too much. In any case, with 10 percent unemployment, American taxpayers won’t be pleased that their tax dollars are going to help China fight global warming. They would probably ask, “We are going to give China $1 billion to fight global warming, and they own $800 billion of our debt? I don’t think so.”

    One of the reasons cap-and-trade is doomed in the Senate has to do with the science. In Milan in 2003, I discussed the so-called “hockey stick” graph. Some may remember this graph: it showed a relatively straight line starting in 1000 AD and then a sharp curve, or blade, shooting upward in 1900. To some, that proved the catastrophic global warming hypothesis. The problem was that, as I pointed out in Milan, the methodology used to create the hockey stick was suspect, to say the least. In any case, after its flaws were exposed, that once-influential work was thoroughly discredited.

    Six years later, and the hockey stick is shattered beyond repair. We are talking about it today because of Climategate. Many here are familiar with it; it has dominated the news, and it’s a huge deal.

    My stated reason for attending Copenhagen was to make certain the 191 countries attending COP-15 would not be deceived into thinking the US would pass cap-and-trade legislation. That won’t happen. And for the sake of the American people, and the economic well-being of America, that’s a good thing.

  • SusanAnne Hiller

    to destroy the USA and its wealth–what’s left of it. And, of course, it will hurt the USA, it’s key in the plan to facilitate the destruction of our country.

  • http://guyaverage.blogspot.com guyaverage

    in order to cripple our economy. All they need to do is call their notes, or even stop buying T-Bills. If they stop carrying our debt for one year we would be in a world of hurt.

    Really, we cannot compete with either China or India due to their cost of labor compared to ours.

    I would tend to think that they would not want our economy to be fracured simply because we provide a large consumer market for them. Both China and India have a large amount of people who are potential consumers but their wage levels and the fact that they have less access to credit make for a much less lucrative consumer goods market than does the USA.

    Cap-and-Trade would cause massive bleeding in our economy, without a doubt. I’m just saying that China and India may not benefit in the long-term from Cap-and-Trade here in the USA.

    • dennism

      “All they need to do is call their notes, or even stop buying T-Bills. If they stop carrying our debt for one year we would be in a world of hurt.”

      I don’t agree with you. Someday the Chinese are going to wake up and realize that all they have is paper. All it’s good for is to exchange for goods and services. American good and services. Or they could I suppose sell the paper to investment bankers or other countries. But right now, China is the only entity that seems foolish enough to stockpile it.

      Maybe I’m wrong. How does one foreclose on a T-bill?

      • Scope

        Our dollar is being devalued every time we print still more money, and. when we increase the debt limit and get the printing presses going to get their? The chinese have been very smart. They mostly hold our debt, and the loans are increasing under the Obama administration, and, the interest rates alone will break the back of this country. They will eventually, if not currently, own much of the real estate of this country, and, most of our oil and gas resources.

        Why would China be arguing, in Copenhagen, that the US give the biggest amount to the Global Warming treaty, as they are considered to be a “developing country.” They know that the US would have to borrow the money from them. Then we would give it back to them not as a loan repayment, but, as a means to help them do a little to curb their carbon output, which they will mostly ignore. H. Clinton is in Copenhagen to do the same her husband did with handing this country over to the chinese.

  • partyof1

    that a cap and trade law would cost American taxpayers up to $200 billion a year, the equivalent of hiking personal income taxes by about 15 percent.

    http://www.cbsnews.com/blogs/2009/09/15/taking_liberties/entry5314040.shtml

  • mutantone

    Are we getting to a point here where there is going to be another revolution? Again to defend the ideas and concepts that have made America great. To reassert our dominance in the world as the Peace keepers, the power house, the bastion of freedom. Not the third world power that we are set to become as we fall under the spell of the UN’s regulations to curtail our carbon out put, all the while knowing that the science that supposedly proved that it is causing the climate change is false and just another instrument used to make us weak. Do we stand back and watch as our way of life is sold out to others? How can we have sunk so low? When does the American Populist stand up and say this is enough Kowtowing, enough bowing to foreigners, time to stand tall to represent what we truly are the giants of industrial innovation the peace makers, the protectors of the weak and disenfranchised.

    • anotherindyfilmguy

      when they feel it affecting them. The Tea Party movement is the first of them to see what’s coming and say “NO”. Most of the rest have to wait until they are shoved out of their spoiled little cozy worlds where they only thing they worry about is their commute to work, getting groceries and going home to tune out the world.

  • anotherindyfilmguy

    and bankrupts it through either the subversion by the left for the last forever or through the global warming fraud then the World deserves it when that collapse shatters economies around the world and all the chaos that comes with it.