What is Cap-and-Trade? Cap-and-Trade is a political scheme ostensibly aimed at reducing greenhouse gas emissions with the goal of reducing the global temperatures.
With a Cap-and-Trade law in place, the government would set a yearly greenhouse gas emission target (carbon dioxide is the most common man-made greenhouse gas, you are exhaling right it now) and would reduce that yearly ceiling over time. This is the “Cap” of Cap-and-Trade.
The “Trade” part of this scheme comes in when the government (read: politicians) gives out greenhouse gas emission credits, valued at billions of dollars, to favored industries. So, industries with greater credits than emissions would be able to sell their valuable credits (basically, a right to emit greenhouse gases) to those industries (such as the coal industry or the oil and gas industries) which would need the credits to stay in business.
Over time, the government makes money, commodities traders make money, such as those on the Chicago Climate Exchange (yes, it exists, they make money trading carbon dioxide credits), politically favored industries make money (such as those former Vice President Al Gore has invested over $100 million in), and the rest of us get hit with the bill – up to $2,000 per family per year of higher energy costs. Thus, Cap-and-Trade is actually a huge energy tax on working Americans.
Senator Barbara Boxer is in charge of pushing the Cap-and-Trade energy tax scheme through the Senate. She says that Cap-and-Trade will create American jobs and reduce global greenhouse gas emissions. She is wrong on both counts.
Let’s take jobs first. Recent studies from Spain show why. In March of 2004, an al-Qaeda affiliate launched a terror attack on the Spanish transit system, killing 191 people. Days later, the conservative Spanish government was defeated by the Socialists who pulled Spanish troops out of Iraq and launched an aggressive “green jobs” program. The results of this experiment are now in and it doesn’t look good for Sen. Boxer and her allies. Juan Carlos University in Spain completed a study in March, 2009 of the effectiveness of the effort to create a large amount of solar and wind energy green jobs. Their findings: each “green” job created with a government subsidy caused the loss of 2.2 regular jobs; each “green” job cost about $800,000 to create; while 110,000 other jobs were lost due to higher energy costs in metallurgy, mining, and other industries. The net result: some 60 percent of the Eurozone’s newly unemployed are Spaniards. This makes sense: increasing the cost of energy makes any energy-intensive industry less competitive with companies located in lower energy cost areas such as coal-powered China.
Now, let’s examine emissions, will they be reduced under a Cap-and-Trade scheme? They might be – in America only. To the extent that politicians reduce the emissions cap and don’t give out too many credits, the cost of emitting greenhouse gases will go up in America. As this cost of doing business soars, energy-intensive industries will be under increasing pressure from their lower cost competitors overseas. The net result will be a shifting of jobs from the U.S. to China, India and other low-cost regions. The irony here is that these nations will produce the same products we used to, but will do so with less efficiency and with far higher emissions because they are more reliant on coal to produce energy. The net result will be a drop in U.S. emissions, but an overall rise in global emissions.
The bottom line: Sen. Barbara Boxer’s Cap-and-Trade energy tax will cost your family up to $2,000 per year, will destroy about 2.4 million American jobs and will actually increase global greenhouse gas emissions.
If we were really serious about reducing emissions and creating jobs, we would look to modern nuclear power as the best way to achieve both.