The case for a revenue neutral carbon tax

In today's Tennessean in an editorial Healthy future may lie with carbon fee writers Teresa Campbell and Pam Jones make the argument that climate change "brings drought that decreases crop yields and shrinks glaciers that provide water for millions of people. It also intensifies disasters that create “climate refugees,” and it turns the oceans more acidic, threatening the base of the aquatic food chain." And, they say, "America’s carbon energy tab is paid for with lost work days, premature deaths, property damage from violent storms and fires, failed crops and droughts."

To combat climate change, they say, "We need a market-based solution that will help our economy, protect American businesses from foreign competition, be simple and transparent enough for all to understand, and encourage other countries to follow suit."

That solution they say is the carbon tax. Now, I know that many on the right are going ballistic and pulling out their hair denouncing "junk science," "Agenda 21," and Al Gore.  If you really believe that global warming is conspiracy of the overwhelming majority of the world's scientist designed to usher in a one world socialist government then I can understand your reluctance to support a carbon tax. However, if you believe that the majority of scientific opinion may actually be correct and that climate change may be occurring, then please carefully consider a carton tax.

A carbon tax is a market approach to applying a cost to a  detrimental externally. I have taken a strong stand in opposition to a carbon cap and trade system because it can be manipulated to pick winner and looser and lacks transparency, will inevitably be subject to corruption, and will drastically increase the scope and size of government. A cap and trade system would reward people for doing things they might have done anyway or reward them for doing things they might have not done anyway. 

I offer the example of saying I would sell you my carbon credits for trips I will not take to Knoxville and I will agree to not take two trips a day.  You can buy my credits and then take a trip and not feel guilty. That is cap and trade. It is bound to be corrupt.

A carbon tax is not subject to such manipulation.  While the details of how the revenue generated from the carbon tax is off set by  a reduction in other taxes or returned to the consumer is an important detail, the concept is one that conservatives should embrace. Many conservatives have embraced the carbon tax, including America's leading conservative economist Aurthur Laffer, Reagan's chief economic advisor and creator of the Laffer Curve, and the free market think tank The Cato Institute.

It is disappointing that so few committed environmentalist have endorsed the carbon tax, preferring the cap and trade instead. For many, their liberalism and support for big government solutions out weights their support for reducing greenhouse emissions.

 

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More Bad News for the Global Warming Alarmist: Arizona quits the WCI.

There are more problems for the united front to support the settled science and solid consensus of global warming.

The Western Climate Initiative is an agreement between California, Montana, New Mexico, Oregon, Utah and Washington and the Canadian provinces of British Columbia, Manitoba, Ontario and Quebec to develop a regional target for reducing greenhouse gas emissions and develop their own system of cap and trade. The WCI was established in February 2007 and grew out of efforts in the western states to establish such a compact that date back to 2003. With the economic might of California as the anchor for this initiative, there was a view that these eleven jurisdictions could force a cap and trade system on the rest of the nation.

In establishing the WCI, then Arizona Governor Janet Napolitano said, “In the absence of meaningful federal action, it is up to the states to take action to address climate change and reduce greenhouse gas emissions in this country.”

This month, Arizona Governor Jan Brewer announced that her state would no longer participate in the WCI saying "Right now, given the economic downturn, given the complexity of the cap-and-trade scheme being developed, we're not going to be supportive of it."

Other jurisdictions are also going wobbly on the work of the WCI and showing less energy in moving forward. The WCI may fall apart or it may just become impotent, but the wind is out of the sail for a regional cap and trade.

What should the global warming community do? They need to shout even louder that the science is settled and the consensus is solid. They need to keep ignoring Climategate, and glaciergate, and the admissions of Phil Jones. They need more of that symbolic stuff like a big world-wide rock concert or turning off all the lights for an hour. That ought to do the trick.

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cap-and-dividend

As I have stated in other post on this blog, my faith in the science of global warming has been shaken by the exposed fraud of climategate, glaciergate revelations of IPCC scientist unable to do simple subtraction and division, and the emergence of responsible dissenting voices. Nevertheless, I am not sure. I am still waiting for the scientific community to purge crooks and incompetents and convince me the science is real.

Assuming however that the science is valid, what to we do about it? The most promising approach to combat global warming would be straight forward revenue-neutral carbon tax. There is no appetite for that. There is a proposal that would be almost as good.

Maria Cantwell, a Democratic senator from Washington has offered a cap and dividend bill. This except from an article appearing in The Economist, explains how it would work.

Under her bill, the government would impose a ceiling on carbon emissions each year. Producers and importers of fossil fuels will have to buy permits. The permits would be auctioned, raising vast sums of money. Most of that money would be divided evenly among all Americans. The bill would raise energy prices, of course, and therefore the price of everything that requires energy to make or distribute. But a family of four would receive perhaps $1000 a year, which would more than make up for it, reckons Ms Cantwell. Cap-and-dividend would set a price on carbon, thus giving Americans a powerful incentive to burn less dirty fuel. It would also raise the rewards for investing in clean energy. And it would leave all but the richest 20% of Americans—who use the most energy—materially better off, she says.

Ms. Cantwell's 40 page legislation is a lot simpler than the Waxman-Markey 1,440-page bill. There is no buying off the opposition, no special consideration for big campaign contributors, no special deals for friends, no micromanagement of the economy, no army of regulators and bureaucrats, no new work for lobbyist and lawyers, no massive expansion of the Federal Government, no picking of winners and losers, no new revenues for the government. It could actually reduce greenhouse emission. That is why I don't expect it to see the light of day.

If I can be reconvinced that global warming is a reality, this is a solution I could get behind.

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What do you think about global warming?

What I think about global warming can’t be put on a bumper sticker, not does it make a nice slogan. I think the issue is complicated with a lot of unknowns and there is a lot of components to the question. The question, “What do you think about global warming?” is really several questions. Do you think it is occurring? If that question is answered in the affirmative then that leads to other questions. If it is occurring, is it manmade? If it is manmade, what should we do about it? Assuming it is occurring, how severe is it? Do we have time to stop it? Can it be stopped? Below are my thoughts at this time.

(1) Climategate cast doubt on the theory of global warming. Climategate revealed data tampering, conspiracy and group-think. It showed that some scientist reached conclusions and forced the evidence to support the conclusions. Evidence that did not support the conclusions was doctored to show something it didn’t and then the raw data was destroyed. Scientist resisted efforts to comply with freedom of information acts and resisted efforts for others to see their research. Scientist who did not support the dominant theory were marginalized and silenced. For me, Climategate threw serious doubt on the validity the theory.

(2) Climategate does not negate the other evidence however. Despite the revelations of climategate there is still a large body of evidence that supports the climate change theory. There are hundreds of scientists throughout the world studying this issue. Many governments, organizations, and scientist all came to the same conclusion that climate change is occurring and it is manmade. I find it hard to believe that climate change theory is all a hoax and is a large enough hoax to encompass all of the individuals and agencies involved. Also, there is the physical evidence of shrinking glaciers and melting icecaps. I do not believe JFK was assassinated by elements of the CIA, or that 9-11 was an inside job, or that the moon landing was faked. I have a hard time believing in grand conspiracies. It is hard to get a large number of people to perpetuate a hoax or keep a secret. On balance, Climategate cast doubt on the theory of global warming but did not disprove it.

(3) The Consensus on global warming is less solid than has been presented. There are reasonable people and credentialed scientist who are critics of the theory or some aspects of the theory. These critics have been hushed and should be given a voice and platform. The science should not be considered settled.

(4) Climate change is occurring and has always occurred. The earth has always been cooling or warming. Climate has never been stable. That climate change is occurring and that there is a warming trend seems undeniable.

(5) We do not know the ideal temperature of the earth. Is one half of one degree less than it is today the ideal temperature? What should the temperature be? How do we know that what is occurring is not a natural fluctuation. The climate warmed in previous periods prior to man’s ability to impact it. If man’s production of global warming pollutants is causing global warming, perhaps it is even a good thing and is helping us avoid another ice age. How do we know that manmade global warming is not a countervailing force to global cooling? Maybe the scientist of the 60’s were correct after all and the world was heading for another ice age until manmade global warming reversed the trend. I have these doubts but will acquiesce and assume that global warming is a bad thing. I do wonder however how one determines that a degree less or a degree more is not really the ideal or natural temperature of the earth.

(6) Assuming climate change is global warming and it is manmade, I do not know that anyone knows what to do about it. Copenhagen accomplished virtually nothing and global warming emissions increased under Kyoto. Assuming global warming is occurring and assuming it is manmade; the prospects for stopping it are not very encouraging. Poor countries understandably are not willing to forgo the economic development that the prosperous countries enjoyed. I don’t blame them. In times of economic downturn, many in the developed countries are not willing to accept a curtailment of growth that would most likely be necessary to combat global warming and they are not willing to pay a fee to poorer, often corrupt, countries for those countries foregoing development.

(7) The current proposal for Cap and Trade will do virtually nothing to curtail global warming emission and will be detrimental to economic growth and simply expand government. In theory cap and trade could successfully curtail CO2 emissions. The cap and trade bill under consideration however, gives away too many credits and is in essence a tax on consumers. A revenue-neutral cap and trade with no give away of credits could possibly work, but has never been proposed. Another problem with proposed cap and trade is the use of carbon offsets. Carbon offsets are fraudulent and fictitious. A better method of reducing carbon emission would be a revenue neutral carbon tax.

(8) Carbon-based fuel should cost more. Even if global warming theory is incorrect we need to reduce our reliance on foreign oil. We need to do it for our national security. People will not conserve simply because it is a noble thing to do. If energy cost more, people would change their behavior. When gas was $4 a gallon people used less of it. If gas prices had stayed high we would have seen the popularity of smaller vehicles and carpooling. Over time high energy prices would cause people to choose to live closer to work instead of far-flung suburbs and houses with less square feet would be more desirable. Alternative fuels would flourish if only carbon based fuels cost more. Tinkering with CAFE standards and Cash for Clunkers programs and exhortations to combine trips and properly inflate your tires are going to have minimal impact on use of carbon fuels.

(9) Even if we had in place a workable cap and trade policy or a carbon tax and international treaties, I do not know that there is time enough to curtail carbon emissions sufficient to stop global warming. Assuming global warming is occurring, how fast is it occurring? I don’t know if the IPCC overestimates the danger from warming or underestimates it. According to Al Gore. the polar ice caps will be melted within five years. Other global warming alarmists likewise warn that the end is near. Even if we took immediate steps to radically reduce carbon emissions, it would take some years before the climate trend would be reversed. Reversing climate is like turning an ocean liner; it is not quick or easy. There may not be time to do it.

(9) Assuming climate change is real and it is global warming and it is manmade and the end is near, I think the solution for surviving it lies in geoengineering. I do not think we can save ourselves by abandoning technology. If I accept all of the above assumptions, then I think we need to pour money into efforts to use mankind’s ability to innovate and problem solve to combat global warming and in efforts to accommodate global warming. We need to move aggressively to manipulate the environment. We need to pursue ocean iron fertilization. We need to seed the atmosphere with reflective particles that will allow cooling of the earth while we have time to curtail harmful emission. We should aggressively pursue carbon sequestration. We should aggressively pursue replacing carbon-based energy with nuclear energy.

(10) Environmentalist may be the worse enemy of saving the planet. Assuming global warming is a reality and the survival of the planet is in danger, the environmentalist are likely to be the ones who will stand in the way of effective efforts to save it. I am not speaking of all environmentalists of course; I am myself an environmentalist. I love nature. I hike and birdwatch and I used to canoe and camp. I want clean air and clean water and I want to save beautiful vistas and natural waterfalls for future generations and I want endangered species to survive. I oppose mountain top removal and other practices that degrade the environment. I believe we should be good stewards of the earth. The most vocal of environmentalist, however, seem to have an agenda that goes beyond protecting the environment. Unfortunately, the most alarmist of the global warming theorist are also the people who think we need to live in harmony with nature rather than take dominion over nature and be good stewards of the earth. Rather than using clean nuclear energy to heat our homes they would prefer we shiver in caves. Much of the environmentalist movement is anti-human, anti-progress, anti-growth, anti-technology and anti-capitalist. Much of environmentalism is closer to an ideology and a faith than simply advocacy of policies that are protective of the environment. Instead of advocating practical solutions for combating global warming, many environmentalists are more concerned with changing people’s hearts and attitudes. Assuming global warming is real and the worst predictions are correct, the enemies of surviving it are the anti-technology and anti-market environmentalists themselves.

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The Story of Cap and Trade

I know there is a lot of news and talk about the pending cap and trade legislation but I suspect that many people do not really understand it. This cartoon presentation simplifies and explains how cap and trade works. I certainly don’t agree with the political perspective of this video, but even people with whom you disagree can tell a truth sometimes or help shed light on an issue. Try to watch this video without gagging over the left-wing rhetoric. It does a good job of explaining two of the majors defects in the current cap and trade proposal: give away of credits and off sets.

Since the climategate scandal revelations of scientific fraud, I am not now convinced we need to address global warming at all. Before we address it, we need to be sure it is a problem that needs to be solved. For me, Cliamategate threw into question the severity of the problem of man-made global warming. I need to again be convinced that man-made global warming is a problem before I am ready to support efforts to fix it.

If the theory of global warming is correct however, we must address it. If it is true, if can not be ignored simply because it is inconvenient. Assuming for a moment that the theory is correct, I think the preferred method of addressing the problem is a revenue-neutral carbon tax. Just as a subsidy can lead to the production of more of something by reducing the cost of that something to the consumer, a tax can result in less of something by increasing the cost of that something. If we put a tax on products that produce carbon people will choose to use less of those products and we will have less carbon emission. If gas cost more, people use less of it. If gas cost more, battery power and hybrid vehicles will comparatively cost less. To offset the cost increase in taxing carbon however, we should cut the income tax by every dollar raised by a carbon tax. I would prefer to tax carbon more and tax income less; this will produce less carbon and more income.

Unfortunately a carbon tax has never been given serious consideration and cap and trade has. In theory, cap and trade could work. Just like a carbon tax, cap and trade is also a tax but is not as direct. Like a carbon tax, a cap and trade system is designed to change consumer behaviour by attaching a cost to carbon emission. While I would prefer a carbon tax to a cap and trade system, cap and trade is much to be preferred over a system of regulation that mandates carbon levels for each producer of carbon emissions. Incentivizing desired behaviour is preferable to the use of force to change behaviour. I would much rather use the tax structure and markets to solve a problem rather than use the police. In theory cap and trade is sound. Cap and trade was the way we curtailed the pollutants that caused acid rain. Acid rain was a serious problem that was brought under control by the very same method we are proposing to address carbon emissions.

Cap and Trade can work in theory, but unfortunately the devil is in the details. Cap and trade will not work if we give away too many credits and if we have a fraudulent system of offsets. Also, to avoid cap and trade being a huge tax to simply grow government, cap and trade should be revenue-neutral. Revenue raised from the sell of credits should be used to reduce personal income taxes and in order to put more money into the hands of the people in order to help offset the increase energy cost and other cost of living that will follow cap and trade legislation.

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Regarding Cap and Trade

I opposed the recent cap and trade bill passed by the US House of Representatives. I think it was a disaster. Should it become law, it will do little to control carbon emissions. It will put Congress in the position of picking winners and losers in the economy. It will destroy jobs and slow the recovery and will be a massive tax increase and a massive transfer of power to the Federal Government.

The bill will require an army of bureaucrats to insure compliance. It will provide lots of jobs for lawyers and lobbyist who will fight to get or keep an advantage. Should the bill become law, those who were awarded credits will fight like hell to keep them. Those who were given an advantage over their competitors by this bill will invest heavily in elections to keep their advantage. It will institutionalize political corruption. Cap and Trade in Europe has generally proven to be ineffective in reducing carbon emissions and our version is no better.

So, while I am disappointed that this bill passed, I nevertheless part company with many other opponents of the bill. I accept the majority scientific opinion that global warming is a reality. I am not comfortable in an alliance with those who simply deny the science of global warming and think we need to do nothing. I accept that we must try to reduce carbon emission. I accept that in theory a cap and trade bill could reduce American emission of CO2.

What could make a cap and trade bill workable is if all of the credits were sold instead of simply given away. Another provision that would make cap and trade more effective is if the role of nuclear energy was recognized as an alternative to carbon-based energy. If a utility closes a coal-fired plant and builds a nuclear plant, they should earn the credits for the carbon reduction.

In crafting this bill carbon credits were given away simply to fashion a bill that could win enough votes to pass. If cap and trade had sold all of the credits instead of given them away and if the money raised by selling of credits had been rebated to the American people in the form of income tax reductions and tax credits to pay for the higher energy cost that will result from this bill, that would have made the bill more palatable.

Even if the bill had been constructed as I suggest above, there would still be a major obstacle to making cap and trade work. Many manufacturing jobs would simply be shifted to India and China where companies do not have to pay a penalty for emitting carbon. While a good cap and trade bill might reduce carbon emissions in America that would have increased carbon emission in developing countries. A unit of carbon is just as damaging to the climate if it is produced in China as if it produced in America. That problem seems insurmountable. Unless the growing economies of China and India can be enticed to participate in carbon reduction, we are wasted our time. To ignore that reality is irresponsible. Nevertheless, we cannot continue to ignore the problem of looming climate change.

I would have much preferred a revenue-neutral direct carbon tax, rather than the smoke and mirrors of cap and trade. A carbon tax would be much more effective and simpler to administer. I would actually prefer to tax carbon than tax income. If there were a dollar-for-dollar offset, a switch to taxing carbon rather than income would not have to be detrimental to the economy. It is my hope that the Senate will kill this cap and trade bill and consider a revenue-neutral carbon tax bill. In the absence of that happening, I would hope that the Senate could drastically modify this bill so that it is workable and revenue-neutral.

There seems to be lot of people, among both those who favor cap and trade as well as those who oppose it, who have strong opinions about cap and trade yet know little about it. Unfortunately it seems congress did not know much about what they were voting on when they passed the 1200 page bill either.

One of the best analyses of cap and trade that I have come across is from Ryan Love, editor of The Bowater Republican. In these two articles linked here, The Cap and Trade Bill Explained and The Cap and Trade Addendum, Love summarizes the bill and explains the issues involved.

Love links to the full text of the bill so you may read the full 1200 pages should you actually want to do so and presents arguments from both sides. These two articles by Love are lengthy but very readable and well-documented. Some issues just can’t be explained in 400 words. I encourage you to read these linked post if you want a better understanding of the issues involved.

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Cap and Trade: The Maxman-Markey Pay to Play

The Heritage Foundation, Wednesday, May 20, 2009

When Congress passed its last major energy legislation in 2005, a minor provision was added late in the legislative process that created a $1-per-gallon tax credit for “renewable diesel” fuel created through “thermal depolymerization.” The measure was included to benefit a single firm that produced boiler fuel from turkey waste, but in 2007 the Internal Revenue Service ruled that the tax credit also applied to other livestock waste. This led corporate giants ConocoPhillips and Tyson Foods to form a joint venture that turned chicken, cow, and pig fat into diesel fuel.
But just as ethanol mandates drove up the price of food, diverting Tyson’s animal fat into the energy market drove up the costs of manufacturing soap. So the soap lobby fought back and earlier this year Congress cut the thermal depolymerization tax credit in half. This made the Conoco/Tyson venture unprofitable, which they have since discontinued.

What does this have to do with the Waxman-Markey cap and trade legislation currently being debated in Congress? Everything. In order to win enough votes to pass cap and trade, Rep. Henry Waxman (D-CA) has given the corporate members of the United States Climate Action Partnership (which includes both private and government-controlled firms like General Electric, Duke energy, Chrysler, and General Motors) a front-row seat in writing the legislation. The motives of these major corporations are simple: if they cooperate with big government in drafting the legislation, they can cut deals to protect their bottom line. If they don’t play ball, then big government will just tilt the regulatory scheme in their competitors favor.

As the New York Times reports, this is exactly what is happening in the House now:

Cap and trade, by contrast, is almost perfectly designed for the buying and
selling of political support through the granting of valuable emissions permits
to favor specific industries and even specific Congressional districts. That is
precisely what is taking place now in the House Energy and Commerce Committee,
which has used such concessions to patch together a Democratic majority to pass
a far-reaching bill to regulate carbon emissions through a cap-and-trade
plan.

The Center for Public Integrity released a study today showing that lobbying on the Waxman-Markey bill has been dominated by just 10 major lobbying firms. And yesterday the United States Climate Action Partnership released a statement in support of Waxman-Markey explaining:

As USCAP has indicated, there are several key linked issues that must fit
together to ensure a climate protection program is environmentally effective,
economically sustainable and fair. In some instances, that does not occur in
this legislation. … Individual USCAP members will continue to work with Congress
to address these matters in a satisfactory manner.

Oh, we’re sure they will.

Comment: Unless all credits are sold, cap and trade is an ineffective sham and is nothing but a bazaar for buying and selling of political favors where congress picks winners and losers. I think we need to address global warming, but the proposed cap and trade bill will not achieve its objectives and will institutionalize the worse of government corruption.

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Energy deal clubs Obama tax hopes

Most carbon permits to be free

By Tom LoBianco, The Washington Times, Saturday, May 16, 2009

House Democrats touted a weakened global-warming package Friday, releasing a compromise plan that undercuts President Obama's hopes to raise nearly $650 billion from the climate bill to pay for middle-class tax cuts.

Democrats on the House Energy and Commerce Committee, who have been locked in debate over how to tax carbon-dioxide emissions while protecting American industries, said Friday that their revised plan would give away 85 percent of the plan's carbon permits for free. [full article]

Commentary

This is bill is worse than no bill

I depart from many of my conservative brethren in that I accept the majority opinion of the scientific community that global warming is a reality. This is not a position I came to easily. I started out a skeptic. (If you are interested you can read this post: My Conversion on Global Warming.)

The overwhelming consensus of the scientific community is that global warming is real and is caused by human activity. If I accept that global warming is real then I must also conclude that we must try to do something about it. While I opposed Obama’s candidacy and did not support him for president, I was nevertheless hopeful that he would address the issue of global warming. I was disappointed that George W. Bush and a Republican Congress had ignored it.

If President Obama allows this proposed bill to pass, he will be just as irresponsible as was the previous administration. A revenue-neutral carbon tax would be a much more efficient way to reduce green house gases. Unfortunately, a carbon tax has not gaining traction. In theory, a cap and trade system could have the same effect as a carbon tax, although less efficient and covering less sectors of the economy than a carbon tax. The reason cap and trade could have the same affect as a carbon tax is that it is in effect a hidden tax on carbon. Cap and Trade can only be effective if, like a carbon tax, it imposes a penalty on those who emit carbon and by comparison makes non-carbon-emitting energy less costly.

If credits are given away instead of sold, there is no cost to emitting carbon and no incentive to stop emitting carbon until some distant point in the future if ever. Giving away the credits completely destroys the purpose of having a system of cap and trade in the first place. If we don’t do it right we might as well not do it. If Congress passes this bill then the environmentalist will be off their back and everyone can be happy and can congratulate each other for addressing global warming and then ignore the issue. Passage of this bill will take the issue off the table and lull the public into complacency.

Even where cap and trade was structured with fewer give-away credits, it has been a failure. Countries with caps have failed to meet their carbon cap goals and the carbon credit system has been tainted by scandal. (See: The Great Carbon Bazaar) Even when on paper cap and trade has appeared to reduce carbon output, in reality it has often simply shifted emissions from European countries to Asian countries and the total carbon emissions have not really decreased.

This bill is not a bad bill because it does not raise revenue; it is a bad bill because it will not reduce carbon emissions. I hope Obama rejects this bill and tells Congress to present him with a bill that will actually do something.

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The Cost of Green

By INVESTOR'S BUSINESS DAILY, Wednesday, December 03, 2008 4:20 PM PT

Economy: Stimulating the economy with massive new investments in "green" infrastructure seems to be a popular idea, and President-elect Obama has made it a centerpiece of his program. Will it work? We doubt it. (link)

Comment
I accept the scientific consensus that global warming is occurring and is primarily caused by human activity. I believe we must address the issue. However, the claim that solving the problem will be easy or cheap, I have always thought was pure unadulterated propaganda and wishful thinking. To go green will take money. It will take lots of money. It will require making everything that emits CO2 more expensive by either a carbon tax, or a hidden carbon tax in the form of a system of cap and trade; or massive subsidies to make alternatives cheaper; or regulations to prohibit carbon emissions and thus forcing consumers to use more expensive sources of energy and buy more expensive products. Take your pick but no matter how we approach it, it will be very costly.

This article says that the claim that “investments” in green technology will create five million jobs is simply false. It is more likely that 900,000 more jobs will be lost than created. I think we must get serious about addressing global warming, but don’t start by telling fairy tales.

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Better Planet: Nuke Power is Earth's Friend

It’s time to replace coal power with wind and, yes, nuclear.

by William Sweet, Discover

Using coal to make electricity accounts for about a third of America’s carbon emissions. As a result, tackling emissions from coal-fired power plants represents our best opportunity to make sharp reductions in greenhouse gases.

Fortunately, we already have the technology to do that. Unfortunately, right now the United States is addicted to coal, a cheap, abundant power source. Burning coal produces more than half the country’s electricity, despite its immense human and environmental costs. Particulates and other air pollutants from coal-fired power plants cause somewhere between 20,000 and 30,000 premature deaths in the United States each year. Fifty tons of mercury—one-third of all domestic mercury emissions—are pumped into the atmosphere annually from coal plants. In addition, the extraction of coal, from West Virginia to Wyoming, devastates the physical environment, and its processing and combustion produce gigantic volumes of waste.

For the last decade, coal-burning utilities have been fighting a rearguard action, resisting costly antipollution measures required by environmental legislation. At the same time, they have been holding out the prospect of “clean coal”—in which carbon is captured and stored as coal is burned. But clean-coal technologies have yet to be demonstrated on a large scale commercially, and by the admission of even the president’s own climate-technology task force, clean coal doesn’t have any prospect of making a big dent in the climate problem in the next 15 to 20 years.

By comparison, nuclear and wind power are proven technologies that emit no carbon and whose environmental risks and costs are thoroughly understood and which can make an immediate difference for the better. (link)

Commentary
For those of us who accept the science of global warming and think we must find a way to curtail greenhouse emissions, we have reason to be disheartening. Meaningless, ineffective measures such as higher CAFE standards and ethanol mandates have been passed which do next to nothing to solve the problem. Our President for the last 8 years has shown no leadership on the issue and has silenced those who wanted to warn us of the seriousness of the issue. Cynical Democratic leaders advocate combating global warming and advocate lower gas prices in the same sentence. A terribly flawed Cap and Trade bill, which would have transferred vast amounts of wealth, perhaps destroyed our economy and done virtually nothing to curtail greenhouse emissions, was wisely defeated but promises to be brought up again next year. "Green" has become a chic identity, a lifestyle, and a fashion statement but not a call for action.

Yet, the solution is at hand, if only there was the political will. The three most important things we could do are (1) pass a carbon tax, (2) embrace nuclear energy, and (3) promote wind power. By most accounts we have 10 to 15 years to solve the problem but time is running out.

Wind power alone, the most popular of the options, will not solve this problem. Nuclear energy is a major part of the solution, yet is opposed by most environmentalist and we lack political leaders who will advocate for it.

New nuclear power plants are much safer than the generation of power plants of the past. Opponents of nuclear energy always trot out Chernobyl as a reason not to build nuclear power plants, when Chernobyl was a plant that would never have been approved anywhere except Russia. The problem of nuclear waste disposal is exaggerated and is offered as another reason not to pursue nuclear energy. Many opponents of nuclear power cite nuclear proliferation as a reason to oppose nuclear energy. Does anybody honestly think that whether Tehran or Pyongyang produces atomic bombs depends on how many reactors the United States decides to build in the next 10 to 20 years?

The best friend global warming ever had may be the environmentalist. However, they are wasting valuable time and energy preaching the virtues of properly inflating your tires and turning down thermostats, while standing in the way of real solutions. The environment is too important to be left up to environmentalist. Those of us who take the challenge of global warming seriously must not let the environmentalist stand in the way of policies that can save the planet. It is time to go nuclear.

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Is Nuclear Energy Our Best Hope?

by Gwyneth Cravens, Discover

Despite its negative image, nuclear energy may be the most efficient and realistic means of meeting the rapidly-growing demand for power in the United States. by Gwyneth Cravens

Four years ago this month, James Lovelock upset a lot of his fans. Lovelock was revered in the green movement for developing the Gaia hypothesis, which links everything on earth to a dynamic, organic whole. Writing in the British newspaper The Independent, Lovelock stated in an op-ed: “We have no time to experiment with visionary energy sources; civilisation is in imminent danger and has to use nuclear, the one safe, available energy source—now or suffer the pain soon to be inflicted by our outraged planet.”

Lovelock explained that his decision to endorse nuclear power was motivated by his fear of the consequences of global warming and by reports of increasing fossil-fuel emissions that drive the warming. Jesse Ausubel, head of the Program for the Human Environment at Rockefeller University, recently echoed Lovelock’s sentiment. “As a green, I care intensely about land-sparing, about leaving land for nature,” he wrote. To reach the scale at which they would contribute importantly to meeting global energy demand, renewable sources of energy such as wind, water, and biomass cause serious environmental harm. Measuring renewables in watts per square meter, nuclear has astronomical advantages over its competitors.”

All of this has led several other prominent environmentalists to publicly favor new nuclear plants. I had a similar change of heart. For years I opposed nuclear power, but while I was researching my book Power to Save the World: The Truth About Nuclear Energy, my views completely turned around. (link)

Commentary

If one accepts the scientific consensus, as I do, that global warming is a very serious problem and must be addressed and be addressed soon, there is little to be encouraged about. Kyoto has been a dismal failure. The world's output of greenhouse gases continues to increase rather than decrease. The carbon trading and carbon off-set mechanisms are scandal-ridden and are ineffective. In 2007 the US passed new CAFE standards, which will take years to have any impact and then, only minimal. In 2008 the US Congress considered, and wisely rejected, a seriously flawed Cap and Trade bill. If the next Congress should revive and pass the bill, it will enrich some, at the expense of others. It may also very well destroy the economy, while having minimal impact on our carbon output. The G-8 summit passed a very weak declaration to do something about global warming, someday and even that was rejected by India and China. The promise of ethanol turned out to be false. Ethanol has led to higher food prices, increased starvation in the undeveloped world, and has done little to curtail greenhouse gases.

Looking for bright spots in a gloomy picture, gas prices have increased, which for the first time ever has resulted in Americans reducing the amount of driving they do. The bad news is that politicians of both parties are pandering to a public which wants lower gas prices. Another piece of good news is that, thanks to the efforts of oilman T. Bone Pickens, there is a major push to promote wind power. This renewable resource looks like a viable, alternative energy source. Wind power alone, however, can not meet our energy needs.

Nuclear energy may be our best hope. Nuclear energy may be able to curtail global warming in time to avoid a calamity. This energy source would definitely have to be coupled with other alternative sources of clean energy; policies that curb carbon consumption, and futher investment in some promising new technological developments in carbon sequestration. Nuclear is not without its problems, but not using nuclear energy is more threatening than using it. In the above article, the author makes this argument. Unfortunately, many of the people who are most passionate and proactive about global warming are also the same people most passionate about stopping nuclear energy development.

James Lovestock, one of the world's most prominent environmentalist, has gone from being an opponent of nuclear energy to a proponent. This article explains why Lovestock and other rational environmentalist are now supporting nuclear energy as an important part of the strategy for stopping global warming.

Nuclear energy supplies only 20% of America's energy needs. That percentage is constantly slipping, and no new nuclear plants have been built in America in 30 years. America's energy demand continues to increase, and the US is the world's greatest contributor to global warming. If we are serious about combating global warming, we need to embrace nuclear energy.

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The great carbon bazaar

By Mark Gregory Business correspondent, BBC World Service, India

Evidence of serious flaws in the multi-billion dollar global market for carbon credits has been uncovered by a BBC World Service investigation. The credits are generated by a United Nations-run scheme called the Clean Development Mechanism (CDM).
The mechanism gives firms in developing countries financial incentives to cut greenhouse gas emissions. But in some cases, carbon credits are paid to projects that would have been realized without external funding.

The BBC World Service investigation found examples of projects in India where this appeared to be the case. Arguably, this defeats the whole point of the CDM scheme, set up under the Kyoto climate change protocol, as these projects are getting money for nothing. The findings reinforce doubts that the CDM is leading to real emission cuts, which is not good news for the effort to combat climate change. (Link)

Commentary:

The Kyoto Protocol has been the world’s most ambitious effort to combat global warming and unfortunately it has been a dismal failure. The Kyoto Protocol was adopted in 1997 by the United Nations Framework on Climate change and since then 187 countries have ratified the treaty but not the United States.

The Kyoto treaty requires each industrialized county that is a party to the treaty to reduce greenhouse gas emissions to a level specified for each of them. Collectively they must reduce their greenhouse emissions to 5% less than the 1990 level of emission. While some countries are on track to reduce their emissions to their treaty obligated level, many others are not and with China and India exempt from emission reduction requirements, greenhouse gas emissions continue to rise.

Unfortunately even for some of those countries that are meeting their treaty obligations on-paper, their is reason to doubt that they are in actuality having any impact on greenhouse gas emissions. That is because many of them are meeting their reduction level by purchasing carbon offsets.

The logic of this ability to purchase offsets, is that whether you reduce emissions in your own country or you help another country reduce their emissions, the effect is the same. Unfortunately, the Clean Development Mechanism has been riddled with scandal. If you will read the above article, it gives examples of how the program is working in reality.

Carbon offsets sound good in theory. In practice most carbon offsets, whether the foreign CDM offsets or private sector carbon offsets, are a shell game, a scam and a con.

When Congress was debating the recently defeated Cap and Trade legislation, Senator Bob Corker offered an amendment that would delete foreign offsets from the bill. Unless there is a major reform of the CDM, then any American Cap and Trade system must not allow foreign offsets. Before the US considers ratifying Kyoto, the CDM must be reformed.

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Environmentalist who Oppose Cap and Trade

I followed closely the arguments about the Lieberman-Warner Cap and Trade bill which was defeated in the U.S. Senate today. One of the things that surprised me was the lukewarm support from environmentalist and liberal activist for this legislation. I would have assumed they would have made a big push to get this bill passed and would have rallied the troops. Instead, what I found was, at best, a half-hearted support. I did not see much passion.

While most of the environmental and liberal organizations did half-heatedly endorse the Lieberman-Warner Cap and Trade bill, not all did so. Among environmentalist there are some who oppose nuclear energy more than they oppose CO2 emissions and do not want any bill passed that would make nuclear energy more attractive as would be the case with a Cap and Trade bill.

Some environmentalists opposed Lieberman-Warner cap and trade because they think the greenhouse emissions cap is not sufficiently stringent. Some liberals opposed the bill because they perceive that the burden of curtailing global warming would fall heaviest on the poor, and their concern for “economic justice” out weighs their concern for the environment. Other environmental groups had the same criticism as did some conservatives and opposed the bill simply because it was a bad bill.

Among the environmental groups opposing the bill were Friends of the Earth, MoveOn.org, CREDO Mobile, Greenpeace, and Public Citizen.

Creedo Mobile is an organization that funds liberal causes by providing cell phone and other services and giving a share of their profits to liberal causes. Since 1985 they have distributed over $60 million dollars to various organizations. Consider the following from Creedo Mobile on why they are opposing Lieberman Warner:

In the end, the goal of a cap and trade system is similar to that of a carbon tax - raise the cost of activities that generate CO2 relative to other activities so that producers and consumers choose to generate less. Many who advocate for a cap and trade system do so over a tax on two grounds - a majority of CO2 emissions come from a relatively small number of producers or companies, and in the American political climate, the notion of imposing taxes is thought to be toxic. But rest assured, a successful cap and trade system only works if it has the economic impact of imposing a tax on CO2.

One of the reasons that many companies like the cap and trade system is that setting it up is a fundamentally political act, subject to all the good and bad that is decision making in Washington, D.C. Coalitions are formed, front groups created, lobbyists hired, Senate campaigns funded. All to ensure that someone else has to pay the tax, or, in the case of cap and trade, to argue over the cap (the lower the cap, the lower the implicit tax, and vice versa). Also to fight over whether or not the initial allocation of CO2 permits are distributed based on current pollution or auctioned off, and if auctioned off, who gets the revenue (the equivalent of who gets to spend the tax revenue). (link)

Creedo is exactly right. A cap and trade is essentially a tax and the Congress picks the winners and losers who pay it. In addition, it creates a massive bureaucracy and may be devastating to the economy. Despite grave misgivings about the efficacy of cap and trade, I was willing to swallow hard and accept it, if the cap and trade could be modified along the lines proposed
by Senator Bob Corker.

I am pleased to see that the environmental community did not all fall in lock-step in support of this flawed proposal. With even liberals agreeing that a carbon tax is superior to a cap and trade, I am thinking that a gas tax may actually be a possibility. Perhaps it is time to hold firm for a gas tax and pull the plug on cap and trade.

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Bob Corker on Lieberman-Warner:

"This bill misses the mark."

The 500-plus-page Lieberman-Warner Cap and Trade bill that was defeated in the U. S Senate today was a very complex bill and was fatally flawed. If you are unsure of the features of the bill and what was wrong with it, I urge you to watch this 16 minute clip of Senator Bob Corker’s Senate presentation.

Cap and Trade is dead for this session of Congress, but unless Congress develops the wisdom to offer a Carbon Tax, a Cap and Trade in some form is probably in our future. Everyone who cares about the issue of global warming needs to become conversant about the features of cap and trade. We can only hope that the next version of Cap and Trade is cured of the defects of the Lieberman-Warner bill.

Corker accepts the science of global warming. He does not demigod the bill, but calmly and clearly explains how cap and trade would work and what is wrong with the Lieberman-Warner bill. He explains that, “27% of the allocations in this bill go to entities that nothing to do with emitting carbons.” And, he says, “This bill transfers 6.7 trillion dollars in wealth.”

He argues that the foreign carbon offsets are fraudulent and should be deleted from the bill. “I am open to discussing cap and trade legislation that takes the country in the right direction,” says Corker. “This bill misses the mark.”

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CORKER ANNOUNCES AMENDMENTS TO CLIMATE SECURITY LEGISLATION

Corker Seeks to Return More Money Directly to American Citizens, Prevent Massive Government Expansion, Keep More U.S. Dollars at Home

May 28, 2008, JASPER, TN – U.S. Senator Bob Corker (R-TN), a member of the Senate Energy and Natural Resources Committee, today announced his plans to introduce three amendments to the Lieberman-Warner Climate Security Act of 2008, S. 3036, when it comes to the Senate floor for debate next week. The crux of the Corker amendments is to get more money returned directly to the pockets of the American people who will bear the brunt of the costs associated with cap-and-trade.

“I believe we should return more money directly to the pockets of American citizens, prevent massive government expansion, and keep more U.S. dollars at home rather than sending them overseas,” said Corker.

Specifically, the Corker amendments would (1) provide direct relief to American consumers bearing the brunt of the cap-and-trade program’s costs; (2) increase direct reimbursement to the American people by eliminating free allowances—worth over a TRILLION dollars—to entities that have nothing to do with reducing carbon emissions; and (3) eliminate the use of international offsets to meet emissions reductions.

“Since day one, my goal has been to support a bill that addresses climate security AND energy security in a balanced way. This bill is not that and, in my opinion, is not ready for prime time,” said Corker. “While it does focus on climate change, unfortunately it is also a huge spending bill that uses non-discretionary spending—funded in essence by a tax on the American people—to spend TRILLIONS of dollars on new and existing government programs.

“If a cap-and-trade bill becomes law, every single American will pay more for gasoline, more for electricity, more for food, more for everything they buy as a result. I believe that any money generated from a cap-and-trade system should be put back in the pockets of American citizens burdened with these additional costs. Additionally, I believe we need to increase the amount of allowances that are auctioned, rather than giving them away for free to other entities who are supposed to use the value of those allowances to benefit the public. In my view, American citizens would be better served receiving relief directly rather than relying on middlemen to provide that relief through a massive government expansion."

Corker has joined with U.S. Sen. Bernie Sanders (I-VT) to offer a third amendment which will eliminate the use of international offsets to meet emissions reductions. “We should eliminate all international offsets as a way for emitters to comply with the U.S. carbon cap,” said Corker. “There are serious questions about the integrity of many of these projects, and it is difficult to determine whether these projects would have occurred anyway. In addition, these offsets would have a distorting affect on the U.S. cap-and-trade market and would lead to even more American dollars being spent overseas in countries like China, instead of in America.”

Noting that climate change and cap-and-trade would be significant issues facing Congress, Corker has spent his first 16 months in office delving into the complexity of the policy. Last May 2007, he traveled to Europe with Energy Committee Chairman Jeff Bingaman (D-NM) to meet with European Union officials, carbon traders, representatives from the utility industry, and cement manufacturers. In July, Corker went to Greenland with Environment and Public Works (EPW) Committee Chairman Barbara Boxer (D-CA) to view the effects of climate change. He has also spent countless hours with Tennessee-based industry, conservation groups, and experts discussing the impacts of climate change legislation, and in April, Corker began making presentations to his colleagues outlining his concerns with the bill.

Commentary
Congratulations to Senator Corker for proposing these common sense amendments to the Cap and Trade bill. Maybe you can make a purse out of a sow's ear.

It is clear that a Cap and Trade bill will not pass this year. The House has not even taken up the measure and President Bush has said he will veto a Cap and Trade bill if it does pass Congress. At this time, their does not appear to be 60 votes in the Senate to bring any Cap and Trade bill to a vote. With gas approaching $4 a gallon and politician talking about cutting the gas tax and with general concern about the economy, we cannot expect politician to have the courage to pass a bill that will acutally increase energy cost. Also, we can expect an outpouring of opposition once the public becomes aware of the pocketbook impact of a Cap and Trade bill. In addition, the environmentalist community has not been aggressive in selling the concept or rallying the trooops.

Despite the grim outlook for this session of Congress, a Cap and Trade bill may very well be in our future. McCain, Obama and Clinton are all supporting some version and Democrats, who have been more friendly to environmental causes, will more than likely gain seats in the next Congress. Working on the bill now, even though it will not pass this year, is an extremely important part of the process so that the final bill is a bill that will actually achieve the goal of reducing greenhouse emissions without destroying the economy.

Cap and Trade as now drafted is not a bill worth passing. It would be extremely costly and probably accomplish little. Also, there are numerous amendments pending which, if passed, would weaken the bill and benefit special interest and actually make this bad bill even worse. One of the major problems with the bill is that it gives away too many credits rather than selling them. Corker's amendmends will correct some of the major defects of the Cap and Trade proposal. It is my hope that the final bill is a bill that is worthy of supporting.

Keep up the good work, Senator.

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Five Myths About the Lieberman-Warner Global Warming Legislation

Starting tomorrow the United States Senate will begin debate of the Lieberman-Warner Cap and Trade bill. It is my hope that a good Cap and Trade bill emerges and is passed. Unfortunately, I have doubts that a good bill will emerge. There are too many interests who will want the bill drawn in such a way as to benefit them that I suspect the final product will be flawed. When Congress must pick winners and losers, the pubic usually looses. A simple carbon tax would be much less costly and much less subject to special interest manipulation. Unfortunately a Carbon Tax bill is not before us and a Cap and Trade bill is.

The Heritage Foundation, a respected Conservative think-tank has come out against the Lieberman-Warner bill. Ben Lieberman, a Senior Policy Analyst for Energy and Environment in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation has produced a short analysis of the bill called Five Myths About the Lieberman-Warner Global Warming Legislation. You can expect this study to be the talking points that will be repeated over and over again by the bills opponents. I am posting that report and responding:

Myth #1: LW would not be expensive.

Fact: Simply put, LW works like a massive energy tax. By restricting carbon dioxide emissions from coal, oil, and natural gas--with a freeze at 2005 levels beginning in 2012, to a 70 percent reduction in 2050--the bill forces down supply and thus boosts the price of energy. In fact, if energy prices did not go up, then the targets in the bill would not be met. As energy is the economy's lifeblood, and 85 percent of it comes from these fossil fuels, the impact will be substantial. Cumulative gross domestic product (GDP) losses could reach $4.8 trillion by 2030, according to an analysis conducted by the Heritage Foundation. The Massachusetts Institute of Technology, the Environmental Protection Agency, Charles River Associates, and the National Association of Manufacturers have all conducted studies predicting significant economic burdens on consumers should the bill be enacted.

Response: I think this is exactly correct. Any effective effort to combat global warming is going to be expensive. Also, it does work like a massive energy tax. One of my criticisms of the environmentalist is that they have soft-pedaled the sacrifice and cost that it will take to address the problem.

Myth #2: The costs fall on industry, not consumers.

Fact: Virtually all the burden imposed by LW falls upon consumers. The bill will spur net job losses well into the hundreds of thousands, and possibly nearing one million. Particularly hard hit is the manufacturing sector where over one million jobs will be lost by 2022 and two million by 2027. The losses in household incomes could reach $1,026 per year by 2015. Annual household energy-price increases could hit $1,000 by 2030, including a 29 percent increase in the price of gasoline from 2008 levels.

Response: This is true. Anytime government puts an additional burden on industry, the burden is born by consumers. I do not know the accuracy of the cost to the economy of the bill, but will assume the estimates are correct.

Myth #3: Global warming is a crisis that must be addressed at all costs.

Fact: Global warming is a concern, not a crisis. Both the seriousness and the imminence of the threat are overstated. For example, the recent United Nations Intergovernmental Panel on Climate Change report estimates 7 to 23 inches of sea level rise by the end of the century--far less than the widely popularized claims of 18 to 20 feet and little more than ongoing trends over the past several centuries. The attempt to link Hurricane Katrina with climate change is directly contradicted by the World Meteorological Organization and many scientists. Overall, current and expected future temperatures are far from unprecedented, and are highly unlikely to lead to catastrophes.

Response: Not true. Global warming is a crisis. While there are dissenting voices, the overwhelming consensus of the scientific community is that it is a serious and imminent threat. Read the Intergovernmental Panel on Climate Change Report. That report clearly says global warming is a serious threat and we have only a few years to do something about it. Global warming is real, and by the time the worse effects occur it may be too late to reverse them. It is only because the consequences of doing nothing are so serious that a costly undertaking like cap and trade or a carbon tax should be contemplated.

Myth #4: LW effectively addresses the threat of climate change.

Fact: Even assuming the worst of global warming, LW reduces the threat by a minuscule amount. The bill reduces emissions of carbon dioxide and other greenhouse gases in the United States only. China has overtaken America as the world's largest emitter, and its emissions growth is several times greater than that of the U.S. India and other fast-developing nations are on a similar trajectory. Thus, the unilateral impact of the bill on global emissions would be inconsequential. At most, it would reduce the earth's future temperature by one or two tenths of a degree Celsius--too small to even verify. In other words, LW is all economic pain for no environmental gain.

Response: This is a legitimate problem. If we reduce our own emission, that will do little to curtail global warming unless we can get China and India on board. However, if the US acts responsibly to curtail its global warming emissions, then we can speak with moral authority and attempt to negotiate treaties that will bring China and India on board.

Myth #5: LW's cap-and-trade approach is a proven success.

Fact: Critics of the cap-and-trade approach in LW, in which emissions are capped and regulated entities may trade their rights to emit, point to the European Union's substantial difficulties since initiating its own cap-and-trade program in 2005. Most E.U. nations are not on track to meet their targets, and many are seeing their emissions rise faster than those in the U.S. The program is furthermore plagued by accusations of fraud and unfairness. LW essentially adopts the European approach wholesale.

Response: This is true regarding the European Cap and Trade but not true about Cap and Trade in general. Just because Europe got it wrong does not mean that we cannot get it right. It is not the concept that is flawed, but the design of the final product. We know that a Cap and Trade system can work. If you recall when Acid Rain was a problem, it was solved by the use of a system of Cap and Trade. In addressing the problem of Acid Rain, Cap and Trade was a proven success.

Conclusion: Overall, the Lieberman-Warner bill promises substantial hardship for the economy overall, for jobs, and for energy costs. Given current economic concerns and energy prices, this is the last thing the American people need. At the same time, the environmental benefits would likely be small to nonexistent. The Lieberman-Warner bill fails any reasonable cost-benefit test.

My Conclusion: If passed into law the Lieberman-Warner bill will cause substantial hardship. If the final product has so many loopholes that it is ineffective then it does not deserve to be passed. However, if the final proposal is a good bill that substantially curtails global warming emission then the benefit of avoiding the consequences of global warming makes the cost acceptable.

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Dear Senator Alexander, Hang tough.

Dear Senator Alexander,

I read in today’s Tennessean that TV ads would start airing today to pressure you to vote to scuttle the Lieberman-Warner Cap and Trade bill (Climate bill foes press senator). According to the article you, along with Republican Senator Elizabeth Dole of North Carolina and Democratic Senators Robert Byrd and Jay Rockefeller of West Virginia and Max Baucas and Jon Tester of Montana were being targeted. The Club for Growth is spending a quarter of a million dollars for this ad campaign.

I admit, I myself have strong reservations about Cap and Trade legislation. In theory it should work but it is costly and hard to get right. The European Union did not get it right, and emission actually increased under the European Cap and Trade. Nevertheless, we should work on it and try to get it right. We should not give up until we see the final product.

I would much prefer we had a carbon tax but I guess we have no leader willing to advocate any “tax.” I think a carbon tax bill could be sold to the American people, if it was revenue neutral. The pitch could be that we are going to tax carbon emissions which we want less of, and that for every dollar generated by the carbon tax we will reduce the tax on income, which we want more of. Unfortunately, a Carbon Tax is not on the table and a Cap and Trade is.

In the Club for Growth ads they are going to allege that a Cap and Trade bill will impose massive new taxes, regulations, and wealth redistribution. Unfortunately, this is hard to deny. While it is not a tax per se, it mandates new cost to greenhouse-emitting industries and the cost will be passed on to consumers. The effect is the same as a tax. A new regulatory mechanism will have to be created to allocate and sell carbon credits and monitor compliance. The bill will drive up energy cost, just as would a carbon tax, so to help the poor deal with this higher cost, the bill contains a provision to lower taxes for the lower income. They also allege that it will harm the economy. As a conservative myself, I don’t like any of that.

Unfortunately, the things they say about a Cap and Trade bill are all true. Whether it is a Cap and Trade approach, a Carbon Tax, or a hodgepodge of Command and Control and Subsidize, solving the problem of global warming is going to be costly and painful. But, we must ask ourselves what is the alternative. If the science is to be believed, we are talking about more than some drowned Polar Bears. We are talking about the submersion of all low-lying coastal areas, increased refugees from low-lying areas and arid regions of the world, famine, wars, and massive mortality and economic losses. By the time the worst effects occur, it will be too late to reverse them. We cannot afford to do nothing. The real inconvenient truth is that we cannot solve the problem of global warming without considerable pain and cost.

Senator, it is going to take courage to stand firm and seek a solution to this most serious problem. I do not expect you to pledge to support the current bill. It needs a lot of work. Please, however, do not take it off the table. We must find a solution to this problem. Global warming may be as important of a challenge as World War II or the Cold War.

When the alternative is horrible to contemplate, we must do what needs to be done. To counter the Club of Growth and others who will come after you, you must be bold in addressing the seriousness of the problem we are facing and convince the public that there is no easy solution. There are no “ten easy things you can do to stop global warming”. To solve this problem is going to require real statesmen who are willing to risk their own political future in order to avert a worldwide crisis of terrible proportions.

Please be strong. Do the right thing. Don’t buckle. May God bless you and give you strength.

Sincerely,
Rod Williams

CC: A Disgruntled Republican

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Corker: Cap-and-Trade Substitute Amendment is Far From Ready For Prime Time

Press Release from Tennessee Senator Bob Corker , May 22, 2008 , WASHINGTON, D.C.

U.S. Senator Bob Corker (R-TN), a member of the Senate Energy and Natural Resources Committee, said today that the latest version of the Lieberman-Warner cap-and-trade bill (Climate Security Act, S.2191) introduced this week is not ready for prime time.

“If a cap-and-trade bill becomes law, every single American will pay more for gasoline, more for electricity, more for food, more for everything they buy as a result,” said Corker. “We believe that any money generated from a cap-and-trade system should be returned to the American citizens burdened with these additional costs, and while we appreciate the step the bill sponsors have taken in this latest version–the bill is far from ready for prime time.

“This is a massive spending bill that uses non-discretionary spending—funded in essence by a tax on the American people—to spend trillions of dollars on new and existing government programs. Rather than using the revenue generated from this cap-and-trade system to fund new and existing government programs, would it not make more sense to return the revenue generated directly to the citizens who will be bearing the brunt of the costs associated with implementing this program?

Under the bill, credits would be freely allocated to entities, such as states, that don’t have to reduce emissions but are able to sell those credits and use that money to assist consumers through rebates or public programs.

“I believe we need to increase the amount of allowances that are auctioned, rather than giving them away for free to other entities who are supposed to use the value of those allowances to benefit the public. In my view, American citizens would be better served receiving relief directly rather than relying on middlemen to provide that relief through government programs.

“I also believe we should eliminate all international offsets as a way for emitters to comply with the U.S. carbon cap. There are serious questions about the integrity of many of these projects, and it is difficult to determine whether these projects would have occurred anyway. In addition, these offsets would have a distorting affect on the U.S. cap-and-trade market and would lead to even more American dollars being spent overseas in countries like China, instead of in America.

“If cap-and-trade legislation is done properly, we see an opportunity to marry the tremendous passion for the environment with the need to have energy security in our country, and we look forward to the debate on the floor and continuing to work constructively with the bill sponsors.”

Noting that climate change and cap-and-trade would be significant issues facing Congress, Corker has spent his first 16 months in office delving into the complexity of the policy. Last May 2007, he traveled to Europe with Energy Committee Chairman Jeff Bingaman (D-NM) to meet with European Union officials, carbon traders, representatives from the utility industry, and cement manufacturers. In July, Corker went to Greenland with Environment and Public Works (EPW) Committee Chairman Barbara Boxer (D-CA) to view the effects of climate change. He has also spent countless hours with Tennessee-based industry, conservation groups, and experts discussing the impacts of climate change legislation.

In April, Corker began making presentations to his colleagues outlining his concerns with the bill.

Commentary

Bob Corker is quickly emerging as one of the best informed U.S. Senators on the complex issue of energy policy and global warming. I am proud of the work he is doing in this regard. I wish however that Corker, or someone, would introduce a revenue-neutral Carbon Tax instead of relying on Cap and Trade. A Carbon Tax is much less subject to manipulation, and is more immediate and direct. While many pundits and economist have expressed support for a Carbon Tax as the best way to combat global warming, no elected official has stepped forward to propose it.

Cap and Trade is the next-best approach for addressing the issue of carbon emission and is much preferred to the approach of subsidizing favored technologies and attempts to regulate emission by mandating reductions. Both a Carbon Tax and a Cap and Trade rely on market forces to achieve results. Since a Cap and Trade Bill is what is before us and a Carbon Tax is not, I am reluctantly supporting Cap and Trade.

Cap and Trade can be very complex. If it is done wrong, it can put distortions in the economy and be ineffective. If done wrong, then it will take a while to discover it is not achieving the desired results and increased greenhouse emissions will, in the meantime, continue. Congress will probably be very reluctant to revisit a Cap and Trade bill once one is adopted so it is very important that they get it right the first time.

A workable, effective Cap and Trade policy is going to have two groups of enemies: Those who don't want to do anything, and those who are so passionate about the issue they will support anything, even if it is a poorly designed program. Those of us who believe the issue of combating global warming is important, must hope that Congress gets it right and passes a good Cap and Trade bill. Making sure Congress passes a good Cap and Trade bill must be the the goal; not just passing a Cap and Trade Bill.

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Who Wants Gas Tax

I do. As we face the issue of a how to combat global warming and energy dependency, there are many who say we must “do something” but offer no solutions. Some call for conservation or switching to ethanol or other fuel alternatives, but offer no explanation of how that should be achieved. There are essentially three method of achieving a reduction of greenhouse gases and reduced oil consumption: (1) a Carbon tax, (2) Cap and Trade, (3) Cajole and Control. The third option is a hodge-podge and includes everything from tighter CAFE standards to subsidizing alternative fuels to increase research and development and would be the least efficient and least effective method and the method that would take the longest time to show results. Some of the proposed Cajole and Control solutions may actually be detrimental to the environment and counterproductive to the goal of reducing green house emissions. While Cap and Trade is promising, by far the most efficient method of curtailing greenhouse emission and making alternative to carbon-based fuel affordable is a carbon tax. Below is a list of prominent people, across the political spectrum, who advocate a carbon tax or a gas tax. Some of these people have offered detailed explanations for their positions. In the list below, some of the names or publications have embedded links to articles where their position is stated. For those without embedded links, a quick goggle search combining the person or publication name and the words “Carbon Gas Tax” will result in finding the source materials.

Conservatives, Republicans, or Libertarians who Support a Carbon Tax or Gas Tax
Harvard economist Gregory Mankiw, former chairman of Bush's Council of Economic Advisers.
Economics Columnist Robert Samuelson: (Newsweek. Aug. 20-27, 2007 issue – Greenhouse Simplicities)
Columnist Charles Krauthammer
Columnist David Brooks
Theodore Roosevelt IV, Lehman Bros. executive
Former Bush (43) speechwriter David Frum
Libertarian Magazine Reason
Alan Greenspan, former chair, Federal Reserve
Andrew A Samwick, economist, Dartmouth; former chief economist, Council of Economic Advisors, Bush administration. (Raise the Gasoline Tax? Funny, It doesn’t sound Republican, New York Times, 10/8/06)
Weekly Standard contributing editor Irwin Stelzer
George P, Schultz, U.S. Secretary of Labor under Pres. Nixon (1969-70), Treasury Secretary under Presidents Nixon and Ford (1972-74), and Secretary of State under Pres. Reagan (1982- 89. How to Gain a Climate Consensus, Washington Post, Sept. 5, 2007

Liberals or Democrats Who Support a Carbon Tax or Gas Tax:
George Soros, Responsible Investor
Al Gore,
Andrew Sullivan of The New Republic,
Senator John Kerry
ABC’s Geroge Stephanopoulos advocates “Kind of Energy Tax You See in Europe”
Former Fed Chairman Paul Volcker
Columnist Thomas Friedman
Lester Brown, Earth Policy Institute:
Bill McKibben climate activist and author of The End of Nature
Columnist Nicholas Kristof
Columnist Paul Krugman
New York Observer Columnist Nicholas von Hoffman
John D. Dingell, Chairman of the House Energy and Commerce Committee
Sen. Christopher J. Dodd (D-Conn.) New York Times, July 24, 2007
Leon Panetta, former congressman; former budget director, former chief of staff, Clinton Administration. (Talk of Raising Gas Tax Is Just That,” Washington Post, 10/18/06)

Mainstream Press and Prominent People of Unknown Political Persuasion who Support a Gas Tax:
William Clay Ford Jr., chairman, CEO Ford Motor Co.
Robert H Frank, economist, Cornell University New York Times. (Gas Taxes: Lesser Evil, Greater Good,” New York Times, 10/24/05)
James Hansen, Director, NASA Goddard Institute for Space Studies: New York Review of Books, July 13, 2006, The Threat to the Planet
Edward Snyder, dean of the University of Chicago’s Graduate School of Business
James M. Surowiecki. Business and finance journalist, The New Yorker. (“Pump Pressure,” Financial Times, 9/26/05)
Paul Anderson, Chairman and CEO, Duke Energy
Christopher Farrel, Sound Money.
Mike Jackson, CEO, AutoNation Inc (largest national chain of auto dealers).
Kenneth Rogoff, professor economics, Harvard; former chief economist, IMF.
William Clay Ford Jr., chairman, CEO Ford Motor Co.
Robert H Frank, economist, Cornell University
A majority of economists polled by the Wall Street Journal during Feb. 2-7
Los Angeles Times Time to Tax Carbon,
L.A. Times editorial, May 28, 2007
Washington Post (Sorry Record - Waiting for breakthrough technologies is not the way to reduce greenhouse gases, July 11, 2006)
Christian Science Monitor, July 5, 2007.

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Soros slams emissions trading systems

by Hugh Wheelan October 18th, 2007, Responsible Investor

George Soros, the billionaire currency trader, has slammed the use of cap and trade carbon emissions trading systems, claiming they are “ineffective” and do nothing to stop developing countries increasing their levels of pollution. Speaking last week at a high-level regional energy conference in Budapest, Hungary, Soros, said: “The cap and trade system of emissions trading is very difficult to control and its effects are diluted. It is pretty much breaking down because there is no penalty for developing countries not to add to their pollution. You count the saving but you don’t count the added pollution going on. As a world, I don’t think we are getting our act together on climate change at the moment.” (To continue: Sorus slams... )

My Comment: George Soros is a wealthy philanthropist, supporter of democracy in Eastern Europe and a major funder of liberal causes in America. In this article Mr Soros explains why the cap and trade system is failing in combating global warming and advocates a "flat rate carbon taxation system." It is gratifying to see Mr. Soros join the ranks of those who know that the only real solution to global warming is the taxing of carbon emissions.

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