Plano Texas Politics

July 1, 2009

My Own Argument Against Cap and Trade

I’m sure someone has already come up with this, but this is one argument against cap and trade that I call my own.

While I would deny that we are producing to much carbon, I will also say that, going under the assumption we do need to reduce carbon, cap and trade will not be an effective way to limit it.  Business costs rise.    What do businesses do?   They relocate.  Let’s suppose that businesses that represent 10 percent of American carbon emissions move.  This seems pretty reasonable because the businesses with the most carbon emissions will be the first to go.  Suppose some of them go to China, and when they research environmental protection laws in china, they find that if there are any, they don’t come close to the American standards.  Begin to produce more carbon than they produced before.  If they increase carbon output by only one fifth, or produce 12% of America’s 2008 carbon output, and companies still in America produce 80% (80% is less than what I heard America should be producing in a decade under cap and trade) of America’s 2008 carbon output, then we have arrived at a whopping 8% reduction in carbon output.  And that’s before adding other ways to get around the law, or breaking the law, into my calculations.  All that at a tremendous cost: jobs lost, prices up, more real pollutants as companies move to less regulated countries, and probably effects on businesses similar to that of Europe’s cap and trade system.  (see this article paragraphs 7-10.  the rest is good too)

Finally, if you think the cap could just be lower to make it effective, (and I think it supposed to lower much further, just don’t quote me there) then more companies would relocate until carbon production was somewhat affordable.  That’s the way markets work.  If man is responsible for global warming, then, well, I’m afraid that’s just too bad if cap and trade is the best we can do. 

–Samuel Peck

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4 Comments »

  1. my comment to your explanation would have to be “duh”.

    Comment by cheryl — July 7, 2009 @ 2:52 pm | Reply

  2. The US is not the first country to have implemented environmental regulations on its industries. Many countries have in fact not even bothered with the -and-trade part and simply gone for caps. And it hasn’t resulted in industries leaving Germany or Britain, Japan or anywhere because of two things.

    Firstly: The cost isn’t so high that it’s worth entirely relocating plants. In many cases the cost is a few reallocated percentiles.

    Secondly: It leads to innovation. Better environmental controls have also led to better manufacturing methods, the development of new sciences. For instance many companies now re-use the waste that they could not produce in interesting ways, such as reselling on chemical by-products to other companies that have a use for them.

    Mainly what many of you seem to be missing in all this is the -and-trade part. If companies cannot be bothered to improve standards they can always buy more capacity from the market. That’s fair.

    If you actually took the time to understand what cap-and-trade actually IS then maybe you would have a more finely tuned argument than the usual United Stucks of Fearmerica God Flag and Fear response, which is all this is.

    When are Republicans going to get smart again I ask you?

    Comment by Simon — July 14, 2009 @ 5:54 pm | Reply

    • Simon,
      I thank you for sharing your view with me. I find it enlightening to hear what an actual liberal is saying opposed to the liberal media. Now I hope that my co-blogger Samuel Peck, will help me answer you but here is my best shot.

      I am not saying that helping the environment by becoming more eco friendly is bad, what I am trying to say is that it is not the governments right. Sure a similar cap and trade bill may have worked in other countries, but those countries aren’t America. America has always been a very free country but something like this will limit a companies freedom. It is my belief that the free market is the best way to go. I believe that if we let the free market go then companies would eventually shift. It is not however the governments place to FORCE companies to go “green”.

      And for your information, I have spent hours pouring over essays, news articles, speeches, and I have tried to learn what the cap and trade bill actually is. The only problem is, I can’t find it! Where is it!?! I have found articles, essays, and speeches about the cap and trade but I as of today have not found the actual 1,300 page bill. So how can you know what the cap and trade bill is either?

      And what is wrong with an America that supports God? John Adams said; “The Constitution was made for a religious and moral people, without which it can not survive.”

      And finally We The People, are supposed to be afraid of what the government does. “The only thing to Fear is the government!” not fear itself, but the government. We must fear what they do and stop them from doing it! So as ever Stop the cap and trade bill now, before it destroys the economy.

      ~James Dalley

      Comment by jdalley — July 14, 2009 @ 6:04 pm | Reply

      • “Actual liberal” Hmm, I don’t know about that 🙂
        It’s a pretty narrow way to describe me, but ok. Let’s say for this discussion I’m a liberal.

        Here’s where your argument has problems: The government’s solution is to create the market conditions that you think will lead to reform. I think you don’t like it because the word ‘cap’ sounds non-free. But actually the solution is market-based, which should be a good thing (and drives innovation etc, like I said).

        I think it’s a bit unthinking to say that free markets always find the way. Markets in and of themselves have no proactive capability and instead react. So prices of shares, commodities and so on react to news. Markets cannot plan, they can only adapt. The problem with only adaptive behaviour is that the level of adaptation is not controlled.

        So for example, suppose a situation where billions of people die because of environmental conditions before the conditions change in the market result in an innovative solution. The market adapts, but the point is billions of people have died. That’s just not a humane idea, regardless of your nation or creed.

        The United States is not special in this regard. You have the same environmental issues that everybody has and the tenor of your free society is not that different from most. I know you think it is but it really isn’t. You have to start looking at how you will be involved in solving the problem here and not rejecting any solutions on points of philosophy. As I said in another comment, responsibility is important.

        As for what cap and trade is, the information is not hard to find:
        http://en.wikipedia.org/wiki/Cap_and_trade

        Lastly, ignore my God joke. It’s not relevant.

        Comment by Simon — July 14, 2009 @ 6:47 pm


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