More Obamanomics - this time cap and trade

Yesterday the President defended his position to support a "cap and trade" mechanism to reduce carbon dioxide emissions. In addressing a CEO of a company who said the added costs would hurt his company financially, the president answered in "political speak" saying that the cap and trade system needs to raise money but not punish people. (Our president is a master of the doublespeak. Remember ArVee's band "The Underwater Fire System?" Obama would be all for that.)

Since I know a few things about cap and trade...let me give you my opinion.

First, listing CO2 as a pollutant reminds me of the old pork producers' commercials about calling pork "the other white meat." Remember, that we exhale CO2 and plants use it during photosynthesis to create green leaves and fruits and vegetables.

Second, a cap and trade system raises money by setting a cap on how much CO2 can be produced and then allocations are made as to how much a ton of CO2 is going to cost. As the cap is reduced, presumably the cost of allocations rise. However, the downturn in the economy can turn this scheme on its head. For instance, in Europe, which already has a cap and trade system, the economy is so bad that the allocations sell for a lot less than than they once did. So if the U.S. were to set up a cap and trade today, companies would want to buy "affordable" allocations from European countries who would be more than willing to trade paper for American dollars.

A quote from Dr. Robert Peltier, who is editor of Power magazine, brings this point to light: "How does the president convince voters that shipping boat loads of money to Europe is good for the U.S.? That's a stimulus package we should avoid."

Nevertheless, the U.S. House is already holding hearings on a cap and trade system and a spokesperson for the non-partisan Congressional Budget Office told the subcommittee that reducing nationwide carbon dioxide emissions by 15 percent could cost the average household roughly $1,600 annually. "Those price increases would impose a larger burden on low- and moderate-income households than on higher-income households, relative to either their income or total spending," the CBO spokesman said. And it should be noted that the President's plan is to reduce CO2 emissions by 80 percent, not 15 percent.

Well, one legislator (Jim McDermett, D-Washington) at the committee hearing said that isn't fair, but if utilities are going to insist on passing these hidden costs on to consumers -- like this is first time that has ever happened -- then it is up to government to collect the cap and trade money from everyone and give some of it back to the poor....while using some of it to pay for healthcare reform, education reform, the down trodden, the depressed, the illegal aliens, etc....and maybe even some for the study of rats in San Francisco.

Where have we heard that before? More wealth redistribution.

A better alternative to cap and trade is simply to impose a tiny tax on each ton of carbon. So instead of paying 6.9 cents per kilowatt-hour of electricity, you would pay 7 cents. Since America uses so much electricity, that little 10th of a cent would represent billions of dollars that could be used to retrofit the 600 coal-based electricity generating stations in the United States with equipment that can capture carbon, build the pipelines to transport it and store the CO2 in deep underground geological formations, such as unmineable coal seams that act as a sponge for the CO2. (A point to remember here is that underneath the two coal seams that are mined near Beulah, North Dakota, lie at least another 17 that are too deep to mine economically.)

When the plants are all retrofitted, the tax can be removed. And the electric utility industry will be making a huge contribution to reducing greenhouse gases -- which is really what Americans want, not wealth redistribution.

However, if cap and trade passes, it will never go away because it will become another government entitlement program to help redistribute wealth from those dead beat millionaires (who farm, own businesses, go to college to hold professional positions at companies and buy stock) to those hard working bums.

I don't believe there is any way for any of us to stop this runaway "cap and trade" train. Not with Obama in the White House along with Pelosi and Reid running the Congress. However, Americans, some of you voted for these folks. So open wide, the medicine tastes pretty bitter....at least to me. And kiss your outdoor barbecue away...it produces CO2.