Bringing Per Capita Carbon Emissions Down to Below 1700s Levels.
The most dangerous proposal in the new budget is the institution of a cap-and-trade system for carbon emissions. Indeed, the single largest source of new tax revenue in the budget going forward are these payments to be made by businesses for the right to emit excess carbon.
That would bring US per capita emissions of CO2 down to a level below what we had in the 1700s. As Steven Hayward wrote in the WSJ last April about an 80% reduction then on the table:
Begin with the current inventory of carbon dioxide emissions -- CO2 being the principal greenhouse gas generated almost entirely by energy use. According to the Department of Energy's most recent data on greenhouse gas emissions, in 2006 the U.S. emitted 5.8 billion metric tons of carbon dioxide, or just under 20 tons per capita. An 80% reduction in these emissions from 1990 levels means that the U.S. cannot emit more than about one billion metric tons of CO2 in 2050.
Were man-made carbon dioxide emissions in this country ever that low? The answer is probably yes -- from historical energy data it is possible to estimate that the U.S. last emitted one billion metric tons around 1910. But in 1910, the U.S. had 92 million people, and per capita income, in current dollars, was about $6,000.
By the year 2050, the Census Bureau projects that our population will be around 420 million. This means per capita emissions will have to fall to about 2.5 tons in order to meet the goal of 80% reduction.
It is likely that U.S. per capita emissions were never that low -- even back in colonial days when the only fuel we burned was wood. The only nations in the world today that emit at this low level are all poor developing nations, such as Belize, Mauritius, Jordan, Haiti and Somalia.
Recognize that the cost of the cap-and-trade system far exceeds the tax collected from those who are willing to pay the money just to exceed the limits set by the government. The businesses that do not buy indulgences face the cost of the restrictions themselves.
If Obama succeeds in his quest to reduce carbon emissions by 83% by 2050, American business will be destroyed. Manufacturing in the US will essentially disappear to countries that do not have anti-business, anti-growth policies, mostly in the Far East.
It would be hard to imagine a government policy that is likely to be more destructive of jobs and economic growth than this one.
The goal is an 83% reduction in carbon emissions by 2050 compared to 2005 levels.
That would bring US per capita emissions of CO2 down to a level below what we had in the 1700s. As Steven Hayward wrote in the WSJ last April about an 80% reduction then on the table:
Begin with the current inventory of carbon dioxide emissions -- CO2 being the principal greenhouse gas generated almost entirely by energy use. According to the Department of Energy's most recent data on greenhouse gas emissions, in 2006 the U.S. emitted 5.8 billion metric tons of carbon dioxide, or just under 20 tons per capita. An 80% reduction in these emissions from 1990 levels means that the U.S. cannot emit more than about one billion metric tons of CO2 in 2050.
Were man-made carbon dioxide emissions in this country ever that low? The answer is probably yes -- from historical energy data it is possible to estimate that the U.S. last emitted one billion metric tons around 1910. But in 1910, the U.S. had 92 million people, and per capita income, in current dollars, was about $6,000.
By the year 2050, the Census Bureau projects that our population will be around 420 million. This means per capita emissions will have to fall to about 2.5 tons in order to meet the goal of 80% reduction.
It is likely that U.S. per capita emissions were never that low -- even back in colonial days when the only fuel we burned was wood. The only nations in the world today that emit at this low level are all poor developing nations, such as Belize, Mauritius, Jordan, Haiti and Somalia. . . .
If Obama succeeds in his quest to reduce carbon emissions by 83% by 2050, American business will be destroyed. Manufacturing in the US will essentially disappear to countries that do not have anti-business, anti-growth policies, mostly in the Far East.
It would be hard to imagine a government policy that is likely to be more destructive of jobs and economic growth than this one.
So what are its chances in Congress? I poked around a bit in order to determine if I needed to sell my US stock market positions.
Normally, the bill would not be brought forward in the House without the votes, but I came across this speculation:
The erratic course that legislation establishing transferable global warming fees has taken shows how hard it is to get a coalition together for a future problem that many people think is overstated.
While her admirers say that the reason the speaker kicked the bill out of committee for a sudden vote by the full House is because she believes she can get the job done, it's at least as likely that Pelosi knows she can't.
Leaving the bill in the hands of skeptical and regionally motivated committee chairmen and subject to special interest lobbying, Pelosi was losing control of the bill. Worse than having the Waxman-Markey bill defeated would be having it pass in some form that is really more of a subsidy to carbon emitters than a crackdown. . . .
By bringing the bill out for a vote this week, it will almost certainly fail in the House. If, by some miracle it does get out of the House, the Senate would smite any bill that amounts to a tax or hurts manufacturing states. . . .
Rather than being a sign of new life, Pelosi's decision to push the cap and trade bill out of committee may be something of an assisted suicide.
While I do not know anything of the bill's chances in the House, I wouldn't consider it a "miracle" if it passed. Yet, given the Senate's refusal to fast-track the bill earlier this year, I suspect that the Senate will not pass any version of cap-and-trade this year.
But that wouldn't be the end of cap-and-trade. The Obama administration might just implement it under its power to prevent air pollution.
Smug Alert: House May Pass Cap-and-Trade, the 21st Century Version of Smoot-Hawley.
Powerline has a depressing post (tip to Instapundit) suggesting that House Speaker Nancy Pelosi may have obtained the votes to pass cap-and-trade by making concessions to farm state congressman. It seems that they are willing to support the bill if the government is willing to continue its anti-environmental policy of promoting ethanol.
Before the last few years, scholars used to say that we couldn't get a depression today because policymakers wouldn't make mistakes as bad as the ones they made in the 1930s. Though we've made some great moves in the last year — increasing the money supply and guaranteeing money markets funds — we're also repeating many of the same mistakes
as Hoover and FDR (propping up failing industries; raising taxes; wasting money on unneeded public works projects; corruption; expensive new anti-business government programs).
Certainly, the Smoot-Hawley bill of 1930 was dumb; it imposed huge tariffs on foreign goods imported into this country, which backfired when those countries raised their tariffs too. In a sense, cap-and-trade looked like it would be even dumber; it seemed that it might impose a tariff on our own US manufactured goods, but not on foreign goods. But the House realized this and decided to require the administration to impose tariffs on goods imported from countries that don't restrict their own emissions to the same extent as the US (tip to Maguire and OandO. This 21st century version of Smoot-Hawley will probably take years before the tariffs will be imposed.
The cap-and-trade bill, if passed by the Senate and actually implemented over the next few decades, would do more damage to the country than any economic legislation passed in at least 100 years. It would eventually send most American manufacturing jobs overseas, reduce American competitiveness, and make Americans much poorer than they would have been without it.
The cap-and-trade bill will have little, if any, positive effect on the environment — in part because the countries that would take jobs from US industries tend to be bigger polluters. By making the US — and the world — poorer, it would probably reduce the world's ability to develop technologies that might solve its environmental problems in the future.
If this bill were very likely to pass the Senate and if the restrictions were to be phased in quicker in the early years of the program than the bill provides, then a double-dip recession would be a near certainty. But because the Senate may reject such an anti-business bill altogether and because in future years the strictures of the law may well be postponed just when they might bite businesses, it is hard to predict what might happen to the economy in the short run.
Nonetheless, if the House and Senate were both to pass cap-and-trade, the chance of a double-dip recession, which was a remote possibility just last week, would be converted into a substantial possibility, though probably still less likely than not.
What cap-and-trade accomplishes besides causing businesses to make decisions that would otherwise be inefficient is that it makes its proponents feel morally superior.
This phenomenon was explored in the classic South Park episode, Smug Alert.
Here is Matt and Trey's official commentary to this episode:
Unfortunately, the price of "smug" is likely to be staggering.
At 4:05pm ET [some] Republicans on the floor of the House are asking where they might get a physical copy of the bill, in particular the 300-page amendment added in the middle of last night. They'd like to see what they are voting on before they are asked to vote.
The Chair doesn't know, which may perhaps be understandable. But none of the Democratic sponsors spoke up to offer a copy or two to the Republicans.
UPDATE: After 10 minutes, Congressman Markey finally said it's available on the Rules Committee website.
2D UPDATE: The House Majority Leader was granted one minute and talked for 14. Then at 5:33pm ET Minority Leader John Boehner was granted 2 minutes. It's now 6:26pm ET and he's still talking. He's reading parts of the 309-page amendment.
3D UPDATE: After a very effective speech, Boehner finally stopped at 61 minutes. Congressman Waxman, who tried to stop Boehner after about 18 minutes, asked how much time Boehner consumed. The Congresswoman sitting in the Speaker's chair (Ellen Tauscher) replied, "The gentleman used the customary amount of time yielded to the minority leader."
4th UPDATE: Nancy Pelosi then talked for just two minutes, less than one of which was substantive. She just said that the bill was about "Jobs, Jobs, Jobs!" Now a Republican replacement bill is being voted down.
As you undoubtedly know by now, Congress voted on Friday to change the weather — or more accurately, the climate. The idea that a government of one country could appreciably change the world's climate over the next 40 years is the ultimate hubris. Legislators may think they are God, but they're not.
This is the most bizarre thing I have ever seen in my lifetime.
Let's hope it can be stopped in the Senate. Even if it is, our nation has lost something here, and that something is the principal legislative body's grasp on reality. It is as if the House of Representatives suddenly passed a vote to reduce gravity by 10 percent in order to lessen the costs of obesity to putatively cut Medicare costs in the future. Truly amazing.
A few months ago, if someone had to figure out a way to spend as much money and create as few jobs as possible, the Stimulus Bill would be pretty much the ideal piece of legislation.
With the Climate Bill, if someone had to waste as much money and destroy as many jobs and as much wealth as possible — and still have only a trivial effect on the environment — the Climate Bill would be pretty much the ideal piece of legislation.
PS: I was surprised how good much of the Republican debate in the House was. Many of the Representatives understood what was happening and seemed well prepared. Certainly, their grasp of the science was better than that of the Democrats who spoke.
as Hoover and FDR (propping up failing industries; raising taxes; wasting money on unneeded public works projects; corruption; expensive new anti-business government programs). 