Congress Will Support Energy Policy As Long As It's Ineffective

It seems like a story out of “The Onion”–but it’s just CQ reporting very matter-of-factly on the Senate’s progress (or “regress”) today on the budget resolution (emphasis and some commentary added in square brackets):

Sens. John Thune, R-S.D., and Barbara Boxer, D-Calif., offered competing amendments addressing the impact any climate change legislation may have on electricity and other energy costs.

Republicans charge that Obama’s cap-and-trade plan would lead to higher consumer electric and fuel bills [as it's intended to do to reduce the consumption of carbon-intensive fuels] making it, in essence, a tax.

Administration officials acknowledge the plan would cause energy bills to rise [such that the policy would achieve its intended effect] and say that is why they propose dedicating $537 billion of the revenues raised by the sale of pollution credits to a middle-class tax cut [which would mitigate the burden on middle-class households without removing the proper price signals].

Thune offered an amendment stating that any energy legislation moving later this year should achieve its goals “without increasing gasoline or energy prices.” [i.e., should achieve its goals without being structured so as to achieve its goals!]

Boxer, chairwoman of the Environment and Public Works Committee, offered what she called a “supplement” that essentially allowed a variety of ways to offset price increases that might occur because of climate change legislation. Her amendment was adopted by a largely party-line vote of 54-43.

The Thune amendment was then adopted by 89-8.

“Senator Thune’s amendment doesn’t go far enough,” Boxer said. “We believe that revenues from a climate bill, should we pass one, and I certainly hope we will, would be used to offset any kind of an increase in electricity and gasoline prices [again, removing any kind of effectiveness in the climate policy], and we would have the revenues from a cap-and-trade system to do just that.”

Thune said Boxer’s amendment was an attempt to give Democrats political cover.

“Don’t believe for a minute” that the tax rebates in Boxer’s proposal “would go back to consumers,” he said.

That’s so sad that it’s funny–or so funny that it’s sad…

Comments

[Mayer Amsch...:]

No, the author gets it wrong. Cap-and-trade schemes are directed towards evil, money-grubbing "corporations", as opposed to consumers. If those corporations charge more for products when their own prices increase, it's because they want to make a profit, which is evil. Also, they will provide a nice juicy target for populist rage from politicians, who stand to gain no matter what happens.
Meanwhile, the oil companies should be commended for voluntarily lowering the price of oil like they have over the past few months. Seeing as how they were solely responsible for the increasing price last year, or so we were told by our elected officials.

Apr 01 01:30 AM

[John Petersen:]

The problem with a cap and trade is that it is the effective equivalent of a value added tax. You increase the price of energy while it is still in the pipeline, bury the tax in the consumer price of the commodity and then give back part of the hidden tax in the form of a middle class income tax break. Overall, the system is terribly regressive and will fall much harder on low income earners who spend a larger proportion of their income on energy costs.

Apr 01 03:18 AM

[ggr1868:]

Man-made climate change is a joke of the left and scientifically bankrupt. Without climate change these same brain donors would be fighting T-Rex for their meals.

Regretfully we have few tar pits in which to throw this rubbish.

Apr 01 06:48 AM

[SubsidyEye:]

John, you seem to be repeating a widely-held belief in the United States that is simply wrong: that VAT taxes are hidden from consumers -- "bur[ied] the tax in the consumer price of the commodity." In many countries that apply VAT taxes, the displayed price may not show the tax component (though they often do on big-ticket items), but they often do on the receipt for the product. You may be right that providing consumers with information on how much was paid for carbon permits required to produce the product may be difficult, but it certainly is not difficult in respect of value-added taxes.

Apr 01 08:45 AM

[ding:]

If CO2 emission reduction is the goal, then fossil fuels must be artificially "crippled", so that less CO2 emitting fuels can compete. The reason that fossil fuels must be artificially "crippled" is because less CO2 emitting fuels are more costly for the end user. If this were not the case, we would already be using less CO2 emitting fuels.

The solution is simple. Take the spread between the cost of fossil fuel and alternative fuel. Divide it by 2. Add that to the cost of fossil fuel as a carbon tax, and take the revenue from the carbon tax and give it to the alternative fuel providers as a subsidy. It is now revenue neutral to the government, and it has artificially made alternative energy competitive to fossil fuel.

But therein lies the problem, they don't want it to be revenue neutral to the government. They need the money. This legislation has never been about climate, it has always been about the money.

Apr 01 08:59 AM

[SubsidyEye:]

"Take the spread between the cost of fossil fuel and alternative fuel. Divide it by 2. Add that to the cost of fossil fuel as a carbon tax, and take the revenue from the carbon tax and give it to the alternative fuel providers as a subsidy."

Ding, that idea sounds superficially appealing, but is typical of what a typical member of Congress would dream up. It would gear subsidies not to cost effectiveness but to cost -- artificially keeping alive (indeed, favoring) those technologies that would otherwise lose out in the technology race because their cost per tonne of CO2-eq avoided was too high. Second, many "alternative fuels" are not carbon neutral; some adjustment would still need to be made. And, third, in respect of energy sources that require a lot of scarce resources, such as biofuels demand of arable land, the subsidy would become capitalized into the value of those resources, thus locking in the subsidy and making it more difficult to reduce or eliminate in the future as costs come down or new information comes to light showing that the technology is not so "green" after all.

Apr 01 09:07 AM

[TCK:]

Oil and coal have been the dominant energy sources for over 100 years because they are most cost effective means of producing energy. No amount of money spent on research will change that will change the laws of physics.

The only conspiarcy is the stupidy of elected officials in thinking wind, solar, or ethanol will ever take their place.

Apr 01 09:30 AM

[DM226:]

So technology doesn't ever advance?


On Apr 01 09:30 AM TCK wrote:

> Oil and coal have been the dominant energy sources for over 100 years
> because they are most cost effective means of producing energy. No
> amount of money spent on research will change that will change the
> laws of physics.
>
> The only conspiarcy is the stupidy of elected officials in thinking
> wind, solar, or ethanol will ever take their place.
>

Apr 01 09:38 AM

[billp37:]

"So technology doesn't ever advance?"

Fusion energy works ... in one application.

www.amazon.com/Nuclear...

Diagram of thermonuclear weapon with explanation of operation is contained in the Reed and Stillman book.

-A megaton of TNT (1,000,000 metric tonnes) or megatonne of TNT is a unit of energy equal to 10**15 calories, also known (infrequently) as a petacalorie (Pcal), equal to 4.184 petajoules (PJ).-

en.wikipedia.org/wiki/Ton

Sandia, Los Alamos and Livermore labs are still having problems getting fusion energy to work for electricity generation.

Apr 01 09:57 AM

[Steve in Gr...:]

Barbara Boxer officially became the dumbest member of the Senate when Joe "Plugs" Biden became VP. Stupidity is a sufficient excuse for Babs.

John Thune on the other hand is simply trying to hold the Democrat ruling junta responsible for the horribly regressive carbon tax.

There is no man-made global warming. This is 100% about increasing the tax burden on the U.S. taxpayer and destroying the economy to increase the span of control of the federal government.

Apr 01 10:37 AM

[butters:]

There may not be man-made global warming. That's debatable.

But there is man-made environmental destruction due to the rapid combustion of prehistoric biomass. That's not debatable.

Ultimately, this isn't about the weather, this is about life, and our planet is dying.

Wildlife populations and biodiversity are collapsing. Deforestation and desertification are accelerating. Farmland is chemically castrated. Enormous dead zones and trash vortexes are developing in the oceans.

Worst of all, our way of life depends on the parasitic depletion of natural resources, and we aren't preparing our civilization to survive once our reserves run dry.

Making this about mean surface temperature was a terrible mistake. This is about so much more than that, and it's a shame that we've created openings for such petty denialism.

Apr 01 10:59 AM

[anarchist:]

I agree but not sure that our elected officials think "wind, solar, or ethanol will ever take their (oil and gas) place." I think they are just pandering to a popular theme that will get them votes.


On Apr 01 09:30 AM TCK wrote:

> Oil and coal have been the dominant energy sources for over 100
> years because they are most cost effective means of producing energy.
> No amount of money spent on research will change that will change
> the laws of phy
>
> The only conspiarcy is the stupidy of elected officials in thinking
> wind, solar, or ethanol will ever take their place.
>

Apr 01 11:23 AM

[SSALarry:]

I oppose the cap and trade system, because I believe it is just a way for the Government to raise revenue.

I also don't believe our planet is dying, and/or our wildlife population collapsing. I spent the first 22 years of my life in central Wisconsin, a farming and rural area. At that time, you could not eat fish out of the Wisconsin River because the water was too polluted, if the wind blew in the right direction the stench from the paper mills could be smelled all day, and various wildlife species were declining. Now, some 30 years later, when I visit I see a river that is much cleaner and that you can fish in, no visible air pollution and no stench, increased wildlife, including bald eagles which I never saw before, and abundant healthy forest land.

When I travel other areas of the country I see the same things, eco-life that is healthier now then it was 30 years ago, and getting healthier every day. I simply refuse to believe the alarmist environmentalists that would return us to the stone age in their effort to "save the planet".

Apr 01 11:30 AM

[yank:]

Larry:
It's very good to hear the "other side" of the climate change argument. Agree that "cap n trade" would undoubtedly turn this severe recession into a global depression. Be careful what you tinker with. I see the climate change initiative as nothing more than another version of the evolution "hoax". Both are interesting "unproven " theories. Nothing more, nothing less.

Yank


On Apr 01 11:30 AM SSALarry wrote:

> I oppose the cap and trade system, because I believe it is just a
> way for the Government to raise revenue.
>
> I also don't believe our planet is dying, and/or our wildlife population
> collapsing. I spent the first 22 years of my life in central Wisconsin,
> a farming and rural area. At that time, you could not eat fish out
> of the Wisconsin River because the water was too polluted, if the
> wind blew in the right direction the stench from the paper mills
> could be smelled all day, and various wildlife species were declining.
> Now, some 30 years later, when I visit I see a river that is much
> cleaner and that you can fish in, no visible air pollution and no
> stench, increased wildlife, including bald eagles which I never saw
> before, and abundant healthy forest land.
>
> When I travel other areas of the country I see the same things, eco-life
> that is healthier now then it was 30 years ago, and getting healthier
> every day. I simply refuse to believe the alarmist environmentalists
> that would return us to the stone age in their effort to "save the
> planet".

Apr 01 11:57 AM

[Alan Young:]

Ding--I like your proposal. But your last paragraph doesn't compute. Obama is being attacked for spending too much, but you think he just wants to raise revenues?

Apr 01 02:05 PM

[dondon:]

I oppose cap and trade but in a perverse way would like to see it passed. It would be a huge tax increase on the lower income earners and the rebates would be negligible. Right now lower income earners pay no income tax so they have less skin in the game than high income earners. Cap and trade would hurt the low income earner far worse than their wealthier counterparts. When electricity goes up the monthly bill increases, when gasoline goes up each fill up increases. A rebate gets absorbed immediately usually paying down debt, so the monthly and weekly pain of higher fuel costs will be painful for everyone but especially the lower income earner. Maybe at that point the lower income earner will start to feel like the top 15% of earners and start voting for legislators and presidents that don't want to tax the living daylights out of us all.

Apr 01 02:05 PM

[doubleguns:]

Ahhhhh, I remember the political BS about no one makeing less than 250k would have thier taxes increased by one dime. hahahahaha

Electricity, plastics, gas, every UPS/Fed EX shipment, all going higher in what FEES, I believe that would be TAXES, TAXES, TAXES. Thatts just the tip of the cost increases from Cap and trade BS.

Its all lies just to get more money to the connected rich people and take it from the Sheeple. Only a fool would believe the rhetoric coming form congress and that includes the Pres who stated the previous Lie. Hope no one was betting on the tax increase only effecting the rich. Hahahahahahah

Apr 01 04:05 PM

[Ryanwoodward:]

It is a ludicrous statement to think that China is on board with solar today as the cheapest and best option to provide for their current electricity demand. China went from a net exporter of coal to a net importer in late 2007 and their demand for net coal imports is anticipated to grow.

www.helium.com/items/7...

ryanwoodward

On Apr 01 05:06 PM Steve Pluvia wrote:

> Cap-n-trade is the best and fastest path toward energy independence
> and widespread installation and improvement of renewable energy technologies.
> CO2 producers will have the option of paying the tax or installing
> renewable systems that produce carbon credit offsets.
>
> Its pretty obvious few here have done any cost analysis on wind or
> the next gen solar systems [ e.g. FSLR] that produce power cheaper
> than coal power -- today. Its frankly embarrassing to discover China
> and all of Europe know this but the tiny minded "meri-cans" [like
> many on this thread] still act like Texans in the 1950's.

Apr 01 05:46 PM

[Gob:]

Left wingers who are concerned that carbon emissions are destroying Mother Gaea should voluntarily stop breathing.

Apr 02 03:00 AM

[huangjin:]

Deport the 20 million illegal Mexicans and shut down immigration from any country with a smaller carbon footprint (basically the whole world). The number one cause of higher emissions is more people. The U.S. should stop letting foreigners in, and deport anyone who is here illegally, or even legally, if they are not yet a citizen. They can go back to their 3rd world lifestyle, instead of taking our scarce resources. All countries should have to follow this policy, only allow immigration from high carbon footprint countries to low carbon footprint countries.

The above is sarcasm on my part, but perfectly logical if you seriously believe the environment was facing catastrophe. Population is the main driver of emissions.

Apr 02 08:34 AM