AP Photo - The Canadian Press, Frank Gunn
Related Articles
The basic idea behind cap and trade is similar to that of the clean air act enacted in 1990 which was designed to reduce greenhouse gas emissions by American manufacturing corporations.
Under cap and trade, American manufacturing industries must reduce carbon emissions dramatically paving the way for a cleaner output and environment.
It’s no secret that for those manufacturers, compliance costs will force them to increase pricing, risking becoming less competitive with foreign manufacturers or be forced into bankruptcy and cease operations.
California has decided to enact their Low Carbon Fuels mandate leading the way for the similar Washington legislation. The state is enacting direct regulation of industry forcing companies to reduce carbon emissions by 12%.
President Obama has requested that congress create legislation that enacts an economy-wide cap-and-trade system that will cut greenhouse gas emissions 14 percent below 2005 levels by 2020, and 83 percent below 2005 levels by 2050.
One cement manufacturer in Colton California was told by the state that the costs to retrofit their manufacturing facility will run around $20 million, but upon research by the company, they discovered that the retrofit will cost roughly ten to fifteen times that amount or about $200 to $300 million. The manufacturer has acknowledged that this will add 40 – 50 % to their cost structure, rendering them unable to compete against cement imported from China and Mexico. The plant will be unable to operate and be forced to shut down.
So what - You may say. If they can’t compete with foreign interests under these new guidelines, then allow the company to fall to the premise of survival of the fittest or any of several Dow theories. But, here’s the rub, and this is where this gets to be feel good legislation; The American cement manufacturer collapses reducing carbon emissions proportionately to their output, and the free market responds by giving that business to the more-able-compete companies in China and Mexico.
China and Mexico have no environmental regulations governing industrial toxin or greenhouse gas emissions, so as their capacity increases to provide the cement which used to be provided by American companies so does their carbon output in similar amounts to the overall reduction form the American plant shutdown. Spread the wealth, spread the environmental damage.
In the end, exposure to global greenhouse gasses and toxic byproducts increase. Cap and trade makes the world a dirtier place and if you subscribe to the theory of climate change, it increases the environmental damage that unregulated industry produces on a global scale.
Former Vice President Al Gore, and former congressman Newt Gingrich among others will testify at hearings this week in the House Energy and Commerce Committee on drafting a Cap and Trade/Climate and Energy package.
Let us, as American citizens, living in the greatest country ever to grace the planet, hope that the Democrat led congress wakes up and realizes the detriment to our economy and our way of life that this legislation will be.
Any way you slice it, this legislation will overburden American commerce, redistribute wealth to non-American interests and will add, yes add, to global greenhouse gas emissions for years to come.
Comments