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Ways & Means





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The answer to the riddle became clear on the train on the way home. I had puzzled about the continued attraction of Cap&Trade. Empirical evidence shows that Cap&Trade does not have a prayer of phasing out fossil fuel emissions fast enough to save the planet, e.g., allowing us to phase-out coal-fired power plants. Clearly there must be people in the Obama administration who understand that. Yet Cap&Trade is still talked about as if it were something good. One wonders: do they really believe we have "a planet in peril"?

The testimony that I gave to the House Ways & Means Committee is available at

http://www.columbia.edu/~jeh1/mailings/2009/20090226_WaysAndMeans.pdf

In my testimony I noted that a "Cap" raises the price of energy, just as does a simple honest carbon tax on oil, gas and coal at the first sale at the mine or port of entry. "Cap" is a pseudonym, disguising the fact that it is a tax, assuming that the public is a bunch of dummies, who will never catch on. With all its hooks and eyes, Cap&Trade will allow a lot of funny business. At least we would get a few Wall Street millionaires back in business, via speculation and gaming the Cap&Trade system (funded by John Q. Public, of course).


On the train I read on politico.com that the number of lobbyists in DC working to influence federal policy on climate change increased in the past few years by 300% to 2,340 lobbyists -- four climate lobbyists for every member of Congress. At least the alligator shoe business is doing well. Not too good for alligators, though.


A Carbon Tax & 100% Dividend would not let Congress enrich their favorites or divine winning technologies. Instead, the winners would be innovators who invent products with improved energy efficiency or develop carbon-free energies, which allow people to reduce their carbon tax. Of course, if you don't trust your innovation skills, it is easier to pay a lobbyist to get Congress to adopt a jury-rigged Cap&Trade system.
Continued...


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