Cap and Trade

This is one of those things that should scare us. Not to sound like columnist Jeff Jacoby in today's (Sunday's) Boston Globe but the mere size of the new "Cap and Trade" bill is scary.♠ 

Thanks to reporters David A. Fahrenthold and Steven Mufson of The Washington Post we have a discussion of the "Cap and Trade" bill recently passed by the US Congress. Here is the scary quote:

It runs to more than 1,400 pages, swollen with loopholes and giveaways meant to win over un-green industries and wary legislators.

How can anything that the 535 (536 if you count the VP) couldn't have read before they voted for it be a good piece of legislation.♥  Granted, it is double spaced and single sided, but still, if shrunk down onto their Kindles it would still be a hefty read.

The question of interest to all inquiring mines is "What will all this change cost, and who will pay?"

Per the reporters the Environmental Protection Agency and the Congressional Budget Office are saying that it will be less than 50¢ per household per day. In English, that is just under $183 per year. The conservative Heritage Foundation is doing with $11.78 per day, but that includes the escalation in cost as the law tightens its grip on emitting industries as time goes by. That works out to about $4300 per annum. OK, lets go to the CBO letter to Congress:

On that basis, the Congressional Budget Office (CBO) estimates that the net annual economywide cost of the cap-and-trade program in 2020 would be $22 billion—or about $175 per household. That figure includes the cost of restructuring the production and use of energy and of payments made to foreign entities under the program, but it does not include the economic benefits and other benefits of the reduction in GHG emissions and the associated slowing of climate change. CBO could not determine the incidence of certain pieces (including both costs and benefits) that represent, on net, about 8 percent of the total. For the remaining portion of the net cost, households in the lowest income quintile would see an average net benefit of about $40 in 2020, while households in the highest income quintile would see a net cost of $245. Added costs for households in the second lowest quintile would be about $40 that year; in the middle quintile, about $235; and in the fourth quintile, about $340. Overall net costs would average 0.2 percent of households’ after-tax income.

19 June 2009 letter from CBO Director Douglas W. Elmendorf to Congressman David Camp, Ranking Member of the House Ways and Means Committee.

On the plus side, we will reap the benefits of a cleaner environment. On the negative side, this might well drive jobs overseas. Jobs that go overseas are jobs that our relatives, friends and neighbors are not working at.

Here is the "off the wall" quote for the article:

Who loses in these compromises?

The federal government.

Does anyone in the MSM understand that the Federal Government is merely an entity of the People? Does anyone in the MSM understand that if "The People" all said "we want a new Federal Government, now" the current one would cease to exist? For sure there would be a mad scramble to create a new one (and a lot of people would get hurt in the process). I am NOT advocating that we all stage a sit-down strike against Washington. I am, however, pointing out that who gets hurt is "The People." The Federal Government is merely a machine for getting our collective work done at the national level (and too often the local level).

When our Senators and Representatives trade away some aspect of a bill to get votes from some particular Senators and Representatives (in order to get a majority), it is the rest of us who suffer. In the end, with a bill this size, we probably all get stung to some degree. One of the ways we get stung is that a herd of lawyers (or is that a horde of lawyers?♦) is turned loose to figure out how to extract the most benefit for those who can afford lawyers.

The other side of the coin is that the accountants will also be turned loose and in those industries where there is forward thinking leadership the accountants will e made to find good investments in Research and Development that will yield new processes and new industries and we might all benefit from that. On the other hand, I am an optimist.

Here is the "good news" from the Wash Post article:

How will the world view this?

This might be the most surprising answer of all: A bill swimming in bureaucratic minutiae might make its biggest impact as a broad-stroke idea, a symbol that the United States is serious about climate change.

"It really sends a signal to the international community that one of the largest emitters means business," said Elizabeth Perera of the Union of Concerned Scientists, an environmental group. If that persuades other large-scale polluters such as China to set their own emissions standards, Perera said, the world might get the major reductions that scientists say are needed.

We can hope, since nations like India and China are big pollutors.

Regards  —  Cliff

♠  In reporter Jacoby's article he quotes US House Majorty Leader Steny Hoyer (D-MD) saying:  "If every member pledged to not vote for it if they hadn’t read it in its entirety, I think we would have very few votes."  The best we can hope for is that the syndicate that is the office of each Congressperson is going over this stuff and advising the principle as to what it says.
♥  Which is why, I believe, all legislation needs to have a sunset clause. It it is important enough to pass it is important enough to relook in five or ten years and repass.
♦  My son, the lawyer, says it is "school of lawyers," like it is a school of sharks.