HURTING US FOR NOTHING
March 26, 2008
Congress should pause before doing real economic damage in the name of saving us from Al Gore's hallucinations, says Steve Forbes, editor of Forbes Magazine.
One of the most damaging proposals to combat "global warming" is a cap-and-trade system to limit greenhouse gas emissions, says Forbes:
- The idea is that each year the government will mandate an overall amount of permissible emissions.
- This cap will gradually be reduced, which, in turn, will pressure businesses to reduce their output of greenhouse gases.
- A company, such as a utility plant, that cuts back its emissions could sell its credits to an outfit that wants to build a facility that would emit the gases.
Apart from the fact there's no proof carbon dioxide has any impact on global temperatures, a cap-and-trade system will create an economic disaster, says Forbes. The government -- i.e., politics -- will decide how quotas are allocated. The artificial scarcity cap-and-trade creates will increase the cost of energy and electricity, making U.S. companies less competitive at a time of intensifying global competition.
- The European Union (EU) has had a cap-and-trade system since 2005, and it has already boosted power prices between 5 percent and 10 percent.
- Fraud will become a fact of life; plants in developing countries that claim they've reduced emissions are selling credits, but in many cases the reductions are fictions.
Moreover, a cap-and-trade program doesn't work, explains Forbes:
- In 2006 emissions in EU countries participating in the cap-and-trade program went up while U.S. emissions went down.
- In other words, free-market pricing leads to fewer outputs of carbon; EU bureaucrats are busy revising their scheme since it turns out they set their cap too high.
Cap-and-trade is one European import we should do without, says Forbes.
Source: Steve Forbes, "Hurting Us for Nothing," Forbes, March 10, 2008.
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