Cap and Trade: Trading One Problem for Another

On Friday, barely noted by the media amid all the hubbub about the death of Michael Jackson, the U.S. House of Representatives passed sweeping “cap and trade” legislation that, over the next forty years, will slowly but profoundly change our way of life in America. 

The main goal of the legislation is to address global climate change by reducing CO2 (and other “greenhouse gas”) emissions by 83% from 1997 levels by the year 2050.  It establishes an all-encompassing energy policy and, though not stated in the legislation, also offers the added benefit of dramatically reducing our dependence on foreign oil (or so I had hoped).  The top link provided above will take you to a summary of this 1200 page bill.  (Just enter “H.R.2454” in the search window to get to the bill.  The 2nd link will take you to a Reuters article reporting on the passage of this legislation by the House.) 

I applaud the administration for tackling this urgent issue.  But, based upon my reading of the summary, I have two major concerns.  First, upon hearing that the major goal of the legislation was to reduce greenhouse gas emissions by 83%, I jumped to the conclusion that this would translate into an 83% reduction in our use of fossil fuels – eliminating our dependence on foreign oil and, with it, a big percentage of the trade deficit that has driven us to the brink of financial ruin.  But that’s not the case.  Since the law would only require that 20% of our electricity come from renewable sources by the year 2039, it’s clear that the bulk of the reductions in greenhouse gas emissions will be achieved by capture and underground sequestration.  That is, the CO2 will be removed from the by-products of combustion of fossil fuels, stored and then eventually be pumped underground. 

In fact, the legislation calls for programs to incentivize the development of the technology and even a corporation for the management of the underground storage facilities.  In other words, our strategy is to continue extracting fossil fuels from the ground, filling the voids with CO2 and other greenhouse gases, and hoping to God that it never leaks.  This is the same strategy for dealing with waste from nuclear power plants that has been such a source of concern that it has prevented any such new plants from being built in the U.S. in decades.  I think that most people, when they come to understand the strategy, will be very disappointed in this legislation.

But secondly, my bigger concern is that, as far-reaching and sweeping as this legislation is, it has a hole big enough to sail a super-tanker through it.  That is, it does absolutely nothing to address the government’s plans to increase our population by 50% by the year 2050 and indefinitely beyond.  The bill addresses total emissions but, since that’s simply a function of only two variables – per capita emissions and population – it means that if we allow the size of our population to drift higher by 50%, then per capita emissions will have to be cut not by 83% by 2050, but by 92%.  And the underground gas bubble, just waiting to explode to the surface following an unexpected catastrophe or good old corporate mismanagement, will be 50% bigger than it needs to be. 

Opponents of this legislation warn that it could dramatically lower our standard of living, cut consumption and lead to staggering job losses.  They may very well be right.  (Although the alternative of extinguishing life as we know it doesn’t seem a viable alternative.)  It doesn’t have to be this way.  By 2050 we could make dramatic progress toward cutting our population in half.  Greenhouse gas emissions would be reduced by 50% – without spending a single dime, without creating massive new government agencies requiring more taxes to fund them.  The remaining 33% reduction in emissions could easily be achieved through the conversion to renewable energy. 

Obviously, Obama’s economic advisors – avid followers of primitive, 18th century economics that relies upon population growth as an engine for economic growth – had a heavy hand in crafting this legislation.  Even when population growth has brought us to this – relying upon the creation of giant, high-pressure, underground CO2 gas bubbles to avoid cooking ourselves in our own atmosphere, they cling desperately to the mantra of economics that mankind is smart enough to overcome any obstacle to growth. 

This isn’t responsible leadership, it’s creating the illusion of action while actually kicking the can down the road, transforming today’s obstacle to further growth – global warming – into a different obstacle to further growth to be dealt with by future generations and their economists – how to deal with the threat from the rapidly growing, high-pressure, underground CO2 gas bubble.  I suspect that, if they had the opportunity to question their ancestors, they’d grab them by the throats and, barely containing their anger, would shout  “What in the hell were you thinking?!?!?”

Waving a wand and crossing our fingers, hoping that future generations can come through with technologies to comply with mandates,  isn’t the kind of serious, sober handling of issues that we expected from Obama and his administration.  Is this what they teach at Harvard, that the earth beneath us is an infinite trash can into which we can just dump our problems – out of sight, out of mind?  Come on, President Obama, get real.  We want real, permanent solutions, not dodges.

5 Responses to Cap and Trade: Trading One Problem for Another

  1. mtnmike says:

    Excellent article today with all the nasty truths that totally debase the context which the bill was sold under.
    I have yet one more issue. The world supply of oil will have declined by around 50% in 2050 through permanent depletion. And, since it’s not our oil, reaching 83% of emissions in the U.S. should be no problem. No oil, no emissions. Brilliant work on the part of our leadership.

  2. ClydeB says:

    One of the most puzzling and perplexing thoughts coming out of this whole insane cap and trade tax increase scheme is that our leadership is no less gullible when listening to the so called scientists decryng ‘global warming’ as they are the economists when describing the need for economic growth. One is a bogus as the other. In reality, the basis for the solution is recognizing some of those natural laws that Mike Folkerth likes to quote. Exponential growth can not continue – it is the law. Climate change will continue – it too is the law. Always has and always will. Man’s feeble effort can not alter nor repeal either. All we can do is scheme to delay the day of reckoning. The cost of our schemes will finally become too high and we will collapse under the combined weight of the tax burden and the devalued currency.
    In my reading, I’ve seen as much credible evidence that high levels of CO2 cause cooling to a greater extent than warming. There are geologic records of that happening. CO2 causing warming is still theory.

    Of the things I feel a need to be concerned about, the cost of the Obama administration’s legislation far exceeds everything else.
    An economy in a decades long collapse, borrowing from foreign sources at a record pace and printing the balance of the money needed spell disaster.

    • Pete Murphy says:

      Clyde, I happen to disagree with you on climate change, but that’s not what this blog is about and my opinion on the subject is of no more value than yours. However, I do see the issue as one that’s likely to accelerate the day of reckoning when our leadership has to confront the overpopulation issue – when they realize that the goals for reductions in emissions can never be met while continuing to grow our population.

  3. ClydeB says:

    It has been clear that we disagree on the issue of the cause of climate change. There is as broad a range of positions on the subject as any I can think of, and I’m no more in doubt about the validity of the administration’s position on this subject than I am on economic policy or population policy or immigration policy. I can not so precisely compartmentalize the various intertwined elements that is possible for me to give a pass on this issue and not the others. There is far less pertinent data proving the cause and effect of climate change than there is of population density driving trade balance, for instance, yet we don’t hear anywhere near the outcry to make drastic changes in trade policy as we do the panic call for cimate change. To the contrary, we are preached to about maintaining the status quo on trade. Our economic health is bordering on terminal, yet we continue to follow the the worn out mantra of we must just be competetive in the world market place.
    The current administration and the previous one as well have been terribly wrong on economic policy. What magic potion do the climatologists have that make them any better or more reliable?
    I appreciate that you have diligently maintained your focus on the principal issues of population, trade imbalance and quality of life and I’ll try to limit my range of commentary.

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