Two Must Reads to Start Your Cap-and-Trade Day

By June 2, 2008Global Warming

Robert J. Samuelson, writing in The Washington Post, “Just Call it Cap and Tax“:

The chief political virtue of cap-and-trade — a complex scheme to reduce greenhouse gases — is its complexity. This allows its environmental supporters to shape public perceptions in essentially deceptive ways. Cap-and-trade would act as a tax, but it’s not described as a tax. It would regulate economic activity, but it’s promoted as a “free market” mechanism. Finally, it would trigger a tidal wave of influence-peddling, as lobbyists scrambled to exploit the system for different industries and localities. This would undermine whatever abstract advantages the system has.

And the basic truth that too many policymakers want to avoid addressing: “If we suppress emissions, we also suppress today’s energy sources, and because the economy needs energy, we suppress the economy.”

And The Wall Street Journal, “Cap and Spend,” which does a great job of detailing just how this vast wealth transfer would be parcelled out by politicians.

When cap and trade has been used in the past, such as to reduce acid rain, the allowances were usually distributed for free. A major difference this time is that the allowances will be auctioned off to covered businesses, which means imposing an upfront tax before the trade half of cap and trade even begins. It also means a gigantic revenue windfall for Congress.

Ms. Boxer expects to scoop up auction revenues of some $3.32 trillion by 2050. Yes, that’s trillion. Her friends in Congress are already salivating over this new pot of gold. The way Congress works, the most vicious floor fights won’t be over whether this is a useful tax to create, but over who gets what portion of the spoils. In a conference call with reporters last Thursday, Massachusetts Senator John Kerry explained that he was disturbed by the effects of global warming on “crustaceans” and so would be pursuing changes to ensure that New England lobsters benefit from some of the loot.

Here’s today’s Senate program:

Senate will resume consideration of the motion to proceed to consideration of S. 3036, Climate Security Act, and vote on the motion to invoke cloture
on the motion to proceed at approximately 5:30 p.m.

Perhaps the most straight-forward thing you’ll hear from the Senate this week.

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