Oregon legislature plays Cap-n-Trade shell game

Brent Wojahn/The Oregonian  The Boardman Plant

If you thought Cap and Trade was just a federal government tax scheme, think again the Oregon Legislature is playing this shell game too.

Senate Bill 80 (SB 80) is part of Gov. Ted Kulongoski’s legislative Climate change package which will authorize Oregon State Environmental Quality Commission to establish Cap and Trade here in Oregon. In a White Paper Titled “Green State confronts climate controversy”  by Tyler Evilsizer for the National Institute on Money in State Politics, gives the full breakdown of who is supporting this legislation, who isn’t, and the money involved. Kulongoski’s legislation would set a declining cap on greenhouse gas emissions on power plants, fuel use, and major air polluters. Because it is based on the Western Governor’s Climate initiative, it can easily be incorporated into a regional plan should those states also adopt these policies.

Evilsizer reports that the Agricultural sector is solidly against this legislation, which is not surprising as the Timber industry associations and companies are included with in this group. Also included are Electric Utilities the Oregon Forest Industries Council near the top of the list. These are major employers in Oregon, and by far they are against Cap and Trade. Not surprisingly because it is a massive tax, which in Oregon is not something we can afford given our current 12% unemployment rate.

Cap and Trade is a complex bait and switch game. It requires industry to buy and sell its pollution. Let’s oversimplify just for example’s sake. Company A has a limit of 100 Tons of pollution it is legally allowed to produce. It creates only 80 Tons, it therefore can sell its remaining 20 ton limit to Company B, which had a limit of 50 tons, but is going to produce 70 tons. So company B has to buy from company A its Air pollution allotment, and (this is the kicker) the State then taxes that transaction. A more fantastic racket has yet to be devised by government to tax the air we breathe out, trees breathe in, and is an essential and natural component of the earth, CO2. The effect is this: Company B has to pay to get a larger CO2 allotment, reducing its overall funds with which to do business, which means firing employees to stay in business. Company A has to pay taxes on the funds that it got for the allotment it sold, to a great degree washing out any profit it might have stood to gain from it, both in taxes, and in administrative costs associated with following this insane law. There is also an inherent built in corruption in this system, the company who lobbies the most (Read that as campaign contributions) will find itself with greater and greater Cap and trade allotments with which to sell, and or drive competition out of business.

Another point to consider, Oregon gets about 40% of its power from Coal according to OPB’s April Baer, which is more or less confirmed by the Oregon Department of Energy's 2007-2009 Energy Plan. That report states coal provides 41% of Oregon's electrical power supply, just behind hydropower (at 42%). Oregon has just one Coal power plant, the Boardman plant near Hermiston Oregon in Morrow County. Morrow County  in 2005 had a population of 11,666 and the Boardman plant is a major employer in this otherwise very rural and sparsely populated county. The rest of Oregon’s Coal produced electricity comes from Washington State, at the Transalta plant in Centralia. The loss of jobs at Boardman will have a particularly heavy impact there.

This idea has been tried in Europe already. The end effect so far has been a 5 to 10% drop in the standard of living in those countries who implemented it. The effect on the amount of pollution: Zero. That’s right; there has been zero effect in reducing pollution. Cap and Trade is not designed to reduce pollution, it is designed for the government to tax it. It has the effect of increasing the cost of just about everything for everyone, because a great percentage of those costs are passed down to consumer in the form of higher prices. Whether it is electricity, natural gas, or food, the prices for all of them will skyrocket as the producers of these goods are forced to pass the cost onto the consumer, as well as reducing the funds available for continuing to maintain their current employment levels. So quite literally it also equals a further loss in jobs, a higher unemployment rate, and a further drain on state unemployment and welfare coffers as industry attempts to mitigate the costs to consumers by letting go employees.

So literally, Cap and Trade = Government taxing Pollution = Higher prices for goods and services = higher unemployment = greater dependence on State and Federal Government services for Oregonians.

It does not equal any reduction in Pollution.

This needs to be understood at the Federal level as well as here in Oregon. Congress is currently holding hearings on this very subject with such “stars” of the environmental movement as Al Gore. More on Al’s Testimony here.

Fortunately here in Oregon the stiff opposition to this bill has had the effect of removing the cap and trade component of the plan. In Hearings in mid April, that portion of the bill was removed, though a cap on Carbon emissions did remain in place, and so the opposition to this proposed state law remains, as it still has the effect of the State taxing emissions. As of April 17th the Eugene Register Guard http://www.registerguard.com/csp/cms/sites/web/updates/11979633-55/story.csp reported that the bill was dead in Salem, however lobbyists there report that the bill never seems to die. At least not until the gavel falls to end the session. More on that in a moment.

Are we going to allow this bait and switch scheme in Oregon? Are we really going to allow it on a National level? Are we so far down in the tank of numbly following pied piper Democrat/environmentalist/Socialist scam artists that we can no longer see the forest for the trees? Is it worth it to us to push a 12% unemployment rate closer to 20%?

When one considers the new technology of Carbon Capture and Storage, and the potential revenue generated by this sub-industry would be a far better idea than another tax. However, this brings up another boondoggle for the Environmental cabal, in order to create Carbon Capture and Storage facilities, power utilities would have to build new facilities, which they are steadfastly opposed to. Britain is currently debating this very same issue. It comes down to this, are we going to tax ourselves into oblivion as the Environmentalist/Socialists demand, or are we going to actually address the issue in a way that is not only profitable, but creates jobs instead of taxing them out of existence? Now is not the time for these types of laws. Now is the time to encourage business and innovation to get people working through long term jobs instead of meager handouts from government and the unemployment line. As a bonus, you will be able to leave the heat on in December.

Tomorrow we will look at an equally insidious bill HB 2186, which includes such provisions that will eliminate the Car modification business in the State of Oregon. 2186 which if it moves out of committee today has language in it that could be used as a vehicle for SB 80 should SB 80 fail to leave Committee. It all depends on how 2186 gets written up this afternoon. It should be available tomorrow as 2186A engrossed. Boy is there going to be a cat fight on the floor of the legislature on this. Better get that Mustang modified now.