Cap-and-Trade Update

On Sept. 30, Senators Barbara Boxer (D-CA) and John Kerry (D-MA) unveiled their proposal for cap-and-trade (C&T) legislation. The Senate bill calls for a 20 percent reduction of U.S. CO2 emissions by 2020, and an 80 percent reduction by 2050—targets similar to those in the C&T bill passed by the House of Representatives in June.

The timing of this proposal is ironic. Scientists in the global warming alarmist camp have begun to change their tune. They are now telling us that the earth is likely to cool for a few decades before entering a prolonged period of rapid warming. This is an astounding admission; they have essentially demolished the manmade global warming theory.

Here is why: For years alarmists have insisted that CO2 warms the planet. Now they assert that rising levels of CO2 won’t warm the earth for 30 or 40 years, but then will do so later on? Come again? Does CO2 warm the earth or doesn’t it? Alarmists are finally conceding the main argument of global warming skeptics: Other forces—particularly solar variations—overwhelm the greenhouse effect. It’s time to focus on those other factors instead of obsessing over CO2.

It is also ironic that the Senate bill was unveiled just one week after the G-20 declined to prioritize an international climate agreement at the upcoming Copenhagen meeting. The foreign heads of state who visited Pittsburgh are unwilling to cripple their economies by limiting CO2 emissions, although they surely won’t object if President Obama and his congressional allies torpedo the American economy with C&T. (C&T would slam the American economy to the tune of $1,700 annually per family, according to a study performed by the Environmental Protection Agency—a study that Team Obama squashed, until its release was obtained via the Freedom of Information Act.)

The bad news is that, in spite of the strategic retreat of scientists unable to deny earth’s present cooling trend and the dim prospects for a strong international agreement in December, Congress may still pass C&T legislation. The progressive/environmentalist power base of the Democratic Party will rally behind such a bill. It will be joined by some odd bedfellows, e.g., powerful corporations like Goldman Sachs, eager to make fortunes by establishing a market for buying and selling CO2 permits (a role for which Enron had the inside track when this scheme first surfaced in the ‘90s). Also, nuclear-power companies and other utilities with no or low CO2 emissions would reap immense windfall profits from a C&T scheme. To the chagrin of anti-capitalist greens on the left and free-market economists on the right, C&T could end up being the most expensive corporate welfare bill in history.

On Oct. 2, The Wall Street Journal’s Kimberly Strassel reported that three CEOs of giant utilities expecting to profit from C&T legislation have withdrawn from the U.S. Chamber of Commerce in protest of the Chamber’s reasonable position that the government be transparent about the “science” used to justify C&T. While it’s no surprise that many CEOs have no compunctions about ambushing their competition, it is reprehensible that they are willing to sell out the freedom and prosperity of the American people.

As reported by the Financial Times on Sept. 14, some Britons are already being fined for having traveled “too far,” thereby exceeding government-mandated personal CO2 emission limits. That’s what Americans will eventually face if Uncle Sam gets the proverbial camel’s nose under the tent by passing legislation—however minimal at the outset—that incorporates the principle that the government may regulate our energy consumption and thereby regiment our lives.

The really bad news for the American people is that, even if we rise up in sufficient numbers to block draconian C&T legislation from being enacted, we will STILL be saddled with costly caps on CO2 emissions. That’s because the EPA is now required to regulate them, because CO2 was officially designated as a pollutant earlier this year. (See my “Opening Pandora’s Box”op-ed.)

The EPA recently announced that it intends to start by regulating only the 10,000 or so industrial companies (such as utilities and refineries) that emit over 25,000 tons of CO2. This would cost jobs and drive up the price of electricity and gasoline for the rest of us. The EPA’s target is arbitrary and illegal at the moment, since existing legislation mandates a threshold of 250 tons of emissions (a discrepancy that the Senate bill would eliminate by stipulating the higher figure).

There is a simple way out of this nightmarish mess. Instead of the Senate’s bloated 821-page proposal, Congress should enact a one-sentence bill: “For legal purposes in the United States, carbon dioxide shall not be regarded as a pollutant.” Sadly, with this Congress, we’re a million miles away from such enlightened policymaking.