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Wednesday, September 23, 2009

Cap-and-Trade

Following up on last week’s article about tort reform, I thought I’d address yet another misunderstood and confusing topic currently ballyhooed in the arena of political speechifying: Cap-and-Trade. Somehow you and I on Main Street America are supposed to know what all this stuff is. Most of us do not have the time or the inclination to research these topics being deliberated primarily within the hallowed halls of Congress.

Here’s my non-partisan, apolitical, reasonably unbiased, and thinly researched opinion on cap-and-trade.

To begin with, opponents of cap-and-trade have a name for this that is more descriptive to their position. They refer to this as “cap-and-tax.” So, right away you can see that each side has drawn their own conclusions as to the direction this bill might take us.

A definition of Cap-and-Trade I found (www.whatis.techtarget.com) says, “A cap-and-trade system is a market-based approach to controlling pollution that allows corporations or national governments to trade emissions allowances under an overall cap, or limit, on those emissions.” The goal of cap-and-trade is “to steadily reduce carbon dioxide and other greenhouse gas emissions economy-wide in a cost-effective manner” (web site for Center for American Progress).

This all sounds real good, and most people would be in favor of reducing harmful emissions, particularly of man-made emissions, such as bio-fuels (oil and gasoline products, typically), but there are some underlying issues here that need to be considered before a final decision is made. Principal among these is the issue of Global Warming. To buy into the cap-and-trade approach to resolving the problem, you have to have bought into the argument that man is causing global warming, if in fact there is even any global warming going on. Because we have automobiles, trucks, trains, factories, etc., we are polluting our environment, which is having an adverse effect on the world’s temperatures.

I remember flying into Los Angeles in 1965, leaving my beloved New England for a state that all of us back in the east were convinced was about to experience the mother of all earthquakes and slide off into the Pacific Ocean. Little did I realize that I would be completing my senior year in high school nine months later in Los Angeles, California. O, the ignominy of it all! The day I flew in to LAX it was raining. After the plane had rolled to a stop at the gate and I along with the other passengers were standing ready to de-plane, I became aware of a slight, but growing, burning sensation in my throat, and my eyes were watering from a stinging sensation. I thought, “What in the world is going on here?” Then I remembered the problem L.A. had with something called smog. Even with the rain, the smog managed to do its worst. Two years later I was playing football for a local college in L.A. It was brutal during practice sucking in this brown air. It was not uncommon for a player to be retching on the sidelines from being poisoned by smog. In 1974, after my stint in the Marine Corps, I was back in college, only this time at San Jose State University. San Jose also had a terrible smog problem. It is nasty and unhealthy, make no mistake. California took strong measures to reduce and practically eliminate this problem. But the question is, “Did this smog create global warming?” This is something I’m not convinced of. I also remember back in the late 70’s that the scientists were all telling us that we were on the verge of a new Ice Age. So my question is, “Is it that the planet is getting colder, or warmer? Could it be that we have had that much of a change in only thirty years when we’ve been working so hard to reduce emissions?” During this time we’ve introduced unleaded gas, and placed stringent regulations on factories and businesses that were the main culprits in coughing out pollutants. We have cleaned up our air, and rivers and lakes. There’s still more to be done, but which is it – cooling or warming? You can’t have it both ways!

Once you accept the premise that this is all about global warming, then you can see where cap-and-trade comes in. You’ve heard of the “carbon footprint.” This is the calculated amount of carbon dioxide emitted by an individual, a business, or a country. The intent is to reduce this emission. Ultimately, we would be returning to a pristine condition on earth where man no longer interferes with the ecology. Ah, but that invites me to address this topic from a biblical and theological perspective. I’ll save that for another day. In the space I have left, allow me to draw a conclusion to the cap-and-trade issue.

Cap-and-trade is a tax on those businesses that cannot effectively reduce their emissions to meet a certain set of standards established by bureaucrats. A limit on emissions (the “cap” part of cap-and-trade) is set for companies to meet. Some companies will do so easily, while others will find this difficult – not because they are not willing to go along, but because they produce a product that is more likely to generate excessive emissions. Over time, each of these companies will be required to lessen their emissions. The “trade” part of cap-and-trade is allowing a company which is having difficulty meeting its cap to borrow (trade) from a company that is meeting its cap easily. If you fail to either meet the cap (or trade with those who do), bureaucrats will place levies on these companies which will economically destroy them.

There is a huge amount of money at stake here. My question is, “With this much money involved, do we really want big government to control cap-and-trade?”

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