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A Hole in the Cap
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The “American Clean Energy and Security Act” is the name of Cap and Trade legislation now being considered in the Senate whose goal is to reduce carbon emissions 17% by the year 2020. This is a bad bill that needs to be rejected by the Senate.
First, consider if this size of reduction is feasible. 17% over 10 years is a 1.7% reduction each year. Add to that an assumption that our economy continues to grow and we need another 1% increase in energy production each year for a total increase in our renewable energy output of 2.7% of total energy each year. Now consider that less than 2% of our total energy comes from renewable energy. So this would require us to produce new renewable energy resources each year equal to about 150% of what we produce now.
How are we doing on new renewable energy development? T. Boone Pickens recently announced a delay in his large wind farm project in Texas because he can’t build the electric transmission lines to take his energy to large markets. Development of transmission lines from Wyoming to California are running into problems that could delay that project for years. The wind farm development off Cape Cod has been 8 years in planning and regulatory review and is still not built.
What makes anyone think we can increase our renewable energy supplies by 150% each of the next 10 years?
The Cap and Trade Bill takes this into consideration by allowing companies to exceed the cap by buying credits overseas. For example, a company could plant trees in Brazil and receive a credit to increase their emissions of carbon dioxide (CO2). Some European companies have bought credits in China by helping Chinese manufacturing companies make their manufacturing processes more energy efficient. This scheme does not reduce global emissions. It basically allows companies to create new credits over the cap by sending money overseas.
Democrats are calling the cap and trade legislation a way to drive a clean energy transformation that will create lots of new “green” jobs. How does sending money overseas to improve the energy efficiency of foreign economies create jobs in this country? It might create jobs in Brazil and China, but will likely cost us jobs in the United States. Businesses might also be able to sell emission credits in this country and move their production to a non-capped country. They essentially will be paid to move US jobs overseas.
When you sum this bill up, it really amounts to a large tax increase on American consumers, destroys American jobs, and rewards large multinational corporations. We should do something about carbon emissions like investing and building renewable energy supplies in this country. This Cap and Trade legislation is not the way to go about doing it.
