Energy+-+Cap+and+Trade

Brandon Smith Paper 2 Dramatic climate change is an issue every person on the planet should be interested in. Scientists from around the world agree that the Earth’s temperature is increasing at an alarming rate and if not corrected will lead to the eventual melting of the polar ice caps, which will cause the level of the sea to increase by as much as 20 feet around the globe. This, needless to say, would completely change the make-up of our planet. The reason for this is where things start getting a bit hairy and the solutions for how to stop it are even more controversial, but the main problem does not ever change. Let’s just assume for the sake of this paper that the reason for Global Warming is the release of Carbon dioxide into the atmosphere which is the result of the burning of fossil fuels. Recently the United States of America has begun to see itself as the worldwide pioneer into environmental reform. The Senate is now debating a bill widely known as “the Waxman-Markey Bill” because of the bills’ authors who are both from Massachusetts and both Democrats. The bill would likely implement a system known as “cap and trade”, which in its nature is designed to reduce the amount of fossil fuel emissions each company in the United States can release by 17% over the next decade and by as much as 80% by 2050. The plan calls for issuing permits with each permit acting as a voucher for one ton of Carbon emissions released into the atmosphere. Smaller or more efficient companies can then sell excess permits to larger or less efficient ones and make a nice profit. It also calls for electric companies that supply 4 million watts or more to obtain one or more sources of renewable energy such as wind or solar power. One idea suggested was to allow the federal government to auction off the permits which would create quite nice revenues which could maybe be used to pay down our national deficit. The overall idea is to decrease the amount of permits given out over time so that, theoretically you can eventually do away with the practice altogether. This bill, which is being supported by President Obama as well as the EPA, has become quite an issue among Democrats, largely due to critics from both sides of the aisle who have been quick to point out the plans’ flaws. The EPA’s website is full of information promoting the system calling it “a valuable environmental tool”, while other environmental groups such as “Greenpeace” and “Friends of the Earth” oppose it saying that it is simply not going to do any good. The United States is currently in the midst of the largest economic recession since the Great Depression and there are those in Washington who would place further restrictions on large businesses when the unemployment rate is somewhere around 15%, which is also at its worst since the Depression years. Republicans actually tried to put a clause in the law making it void if the unemployment rate continued to rise to 15% as a result of this bill but were defeated. The Wall Street Journal also came out against the bill. The other huge problem with this system, according to most Republicans is that the cost of lost jobs is not going to be outweighed by the benefits, as some proponents of the bill urge, because unless China and India are on board to solve this problem, the only people that will be sacrificing anything will be us. India’s Prime Minister has come out and said repeatedly that his country will have no part in a pledge to reduce fossil fuel emissions. The Prime Minister of India knows that if he starts that, then all of the jobs created by American manufacturing companies who have taken root there, would simply go somewhere else and take their jobs and their huge tax revenues with them. The United States is already losing millions of jobs to countries with far less restrictions upon the oil business and this is not going to make us any more attractive of a market. Not to mention that if electric companies are required to bring in one or more sources of renewable energy, the average cost of electricity is going to skyrocket. Republicans also tried to add in an amendment to the bill making it void if the average price of a gallon of gas hit 5$ but were once again defeated. Even the President’s Energy Secretary, Steven Chu, has been quoted saying that the cap and trade system would “likely cause energy prices to rise” and that “a lot of money might flow to developing countries in a way that might not be completely politically sellable.” Well he definitely hit the nail on the head with that last part. If Democrats in the Senate begin to debate this bill in September, as is planned, then the month long break in August, during which many have vowed to visit their constituents, should be enough to effectively sink this particular piece of legislation. The recent polls released by USA today and many others show the political support for the President and his policies is rapidly declining and if this trend continues then the political support needed to pass this bill will no longer be there.  The overall goal of cap and trade is no doubt a good one. I am completely in favor of reducing green house gasses so that my grandchildren and their children after them can enjoy all of the rich beauties this planet has to offer. However, the timing of this bill could not be any worse. With the economy being what it is, I simply cannot justify putting into place a piece of legislation that would send jobs overseas, increase the price of electricity, and probably make the price of gas go through the roof again. It is also insane to discourage billion dollar oil companies who have largely employed the entire middle class here along the Texas coast, from conducting business here.