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Cap and Trade, or smoke and mirrors?
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The House in Washington on Friday passed by a vote of 219-212 a bill that addresses global warming. At the heart of the bill is a system of caps and trades that will enable pollution emitting businesses to purchase credits and trade them on an exchange. The estimated opening price for a permit to emit a ton of carbon dioxide is expected to be $13.00. Experts believe that price should rise in future years as pollution limits are decreased. But, the bill contains a provision to keep the cost from rising too quickly in any one year.
The bill would grant a majority of the permits free in the early years of the plan to keep costs low and prevent users such as utilities, industrial companies and others from passing on too much of the cost to consumers. Estimates from the Congressional Budget Office put the cost for the average American household at $175.00 per year by 2020, while the poorest households would receive credits of up to $40.00 a year.
Republicans were joined by 44 Democrats in opposing the legislation. Republican Congressman Joe Pitts of Pennsylvania said, “No matter how you doctor it or tailor it, it is a tax." Nevertheless, eight Republican congressmen supported the measure.
The challenges for Americans are several. First, most are not experts in pollution, merely victims of it. Second, a majority are well aware that something needs to be done and that we have lost precious time on the sidetrack on which the previous presidential administration put the issue.
Travel to many first and second world countries show that Americans have been well aware for decades of the importance of preserving the quality of the nation’s environment when President Woodrow Wilson signed the Rocky Mountain National Park Act in 1915. But, that was a sweeping gesture of the national will, something that today might be criticized as “socialist.” Since the nation’s founding the balance between the public welfare and private capital interests has led to a national government that, depending on who’s footing the bill, swung the pendulum first in favor of business, then back the other way.
Today, there are practical as well as aesthetic reasons for preserving the environment. Witness the collective shock when one of the first acts of the former administration was to abandon the Kyoto Protocol regarding global warming in 2001. Here in Colorado, where tourism is the state’s second largest industry and coal generates the bulk of our electricity, voters endorsed Gov. Bill Ritter’s energy policy by sending him to the state’s highest office on, among other things, his promise that 20% of the state’s energy should be generated from renewable sources by the end of his first term.
So is cap and trade the answer? Industrial interests seem to favor it because it buys them time, literally, to spend the real money that reduces the real pollution, or perhaps avoid it altogether by figuring out how to trade off their liability. Government, meanwhile, seems willing to take the matter in small steps that preserves industry’s competitiveness while still showing constituents its commitment to finding solutions to a problem that exists, but has no obvious solution.
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