PrintMay 12, 2009
The madness of cap and trade
Perhaps we should see what experience other countries have had with trying to implement cap and trade policies.
Take Australia, for example, and Prime Minister Kevin Rudd's signature plan to put in place a cap and trade scheme for Australian businesses. This Wall Street Journal article reports on what has happened so far:
It's turning out that the biggest problem with carbon taxes is political reality. Australian Prime Minister Kevin Rudd has just announced he will delay implementing his trademark cap-and-trade emissions trading proposal until at least 2011. Mr. Rudd's March proposal would have imposed total carbon permit costs (taxes) of 11.5 billion Australian dollars (US$8.5 billion) in the first two years, starting in 2010. This would have increased consumer prices by about 1.1% and shaved 0.1% off annual GDP growth until at least 2050, according to Australia's Treasury. Support has fallen among business groups and individuals who earlier professed enthusiasm for Aussie cap and trade. Green gains were negligible; Australia accounts for only 1.5% of global greenhouse gas emissions.
The reversal, or "backflip," has caused Mr. Rudd much embarrassment. He may still push ahead with legislation in some form, as he promised when running in the 2007 election. But it's becoming clear the proposal won't be a shoo-in despite all the votes Mr. Rudd won when he campaigned as an anti-carbon apostle.
This is yet another example of politicians elsewhere cashing in politically on the current anti-carbon enthusiasm, only to discover that support diminishes as the real-world costs become clear.
This won't stop Obama who desperately needs the estimated $600 billion in revenue that cap and trade will generate here in the US. With it, he plans to pay for another boondoggle - national health insurance.
So what if it permanently damages the American economy. So what if it adds to inflation. So what if it doesn't work.
Ed Lasky adds:
Let us not forget that even environmentalists have shut down green projects - the ultimate irony. They have done so because the do not want acres of solar panels to blight the desert or harm rare pests; do not want transmission lines to spider web the nation with oh so ugly pylons and electrical lines.
They have befouled our water supply because corn (used to make ethanol) requires vast amount of pesticides; they have depleted our aquifers to grow that corn - and now face the laws of economics: industry, jobs, and the economy will be ruined by imposition of the green agenda.
The Australians are learning this too. Since the Democrats are such huge internationalists, will they listen to the lessons from Down Under -- lessons that come from the left government there?
This is doubtful. As I mentioned, Democrats could give a fig about reducing greenhouse gasses. It's all about the cash and how bad they need it for national health insurance.
