May 24, 2009

SIMPLIFY, SIMPLIFY:

MADNESS OF CAP-AND-TRADE (DAVID SOKOL, May 24, 2009, NY Post)

On paper, the Waxman-Markey bill puts a cost on carbon dioxide by imposing a ceiling, or cap, on greenhouse gas emissions and then setting up a market for regulated industries -- such as the electric power sector -- to buy and sell allowances to pollute under that cap. As the cap is reduced each year, market participants will exchange allowances in a complex auction market.

If you liked what credit default swaps did to our economy, you're going to love cap-and-trade. Just read Title VIII of the bill, which lets investment banks, hedge funds and other speculators participate in the cap-and-trade market. They don't have emissions to cut; they have commissions to make.

The real hidden catch of the cap-and-trade system, though, is that it will require consumers to pay twice: first for emission allowances and then for the construction of new low- and zero-carbon power plants.


Just tax gasoline directly. That gets all the results we're looking for.

Posted by Orrin Judd at May 24, 2009 10:14 AM
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