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Archive for July, 2009

Cap And Trade

Posted by hanson807 on July 29, 2009

for what? The US oil consumption is down. Coal production and consumption is down. We are in a depression currently and even electrical use is down. So it appears that we are cutting back on our energy consumption. The cost of doing business is already limiting our energy consumption, so why do we need a cap and trade?

The European Union currently has a failed system. Although some analysts, those who are liberal and at universities at least, are saying it is a success. But what Success? Even the report from Pew Reports says that it was a failure from 2005 to 2008, but now from 2008 on its a success. Of course manufacturing is diving so the use of coal, gas and other power sources is dropping. Starting in 2008 the consumption has declined as the economy dropped. This should be solid proof that the only way the system will work is in declining markets. Other than that, it is a dismal failure. Also, it relies on member states to report actual quantities and has no means to measure them. So they can lie and aren’t caught.

Here is a best case scenario of what kind of corruption we will likely see. Senators and Congressman through friends and front companies purchase closed or out of business steel mill or other similar plants, receive their allotment of CO2 credits then sell them in the market and make millions. Secondly, it sets a new artificial low mark for the steel mills. The price of steel or any other material will have to pass what could be made by selling the credits. If the price of the commodity drops below what they could sell the carbon credits for, they close the doors and lay the off the workers. The credits and their value have now become an artificial floor for prices in the US. Foreign competitors now know how to kill our industry, price just under the Cap and Trade value and bankrupt us. A fake market will fool everyone but the dollar. It can never be fooled.

The only true answer to lowering the use of carbon based fuels is to have alternatives that are viable. The problem is, as alternatives show up and they are viable they price of the carbon based fuel goes down. The alternatives, by the nature of being alternative will be expensive. Third world countries won’t use them they will use the less expensive fossil fuels. Nuclear is viable but opponents can force the price of nuclear power up by unreasonable demands during the production of the plant. They can drive the price up by telling the nuclear plants they can’t store spent fuel on site, you can’t reprocess the fuel and use it again, and we will make sure there is no where to ship the waste. So we want to use less fossil fuels but we don’t want to use nuclear. Vote accordingly.

The cap and trade is being pushed by a bunch of folks who plan to benefit monetarily from the system. They can set up a bureaucracy and put the jobs in plum list for the incoming administrations. This will be another road block to get around to prosperity.

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