“Cap-and-trade for CO2 emissions will be just another political plaything for crony socialism…. Cap-and-trade is high on transaction costs and wheeling-dealing and low on emission reduction. In Europe, post-Kyoto Protocol (1997 –) coal usage has increased seven percent, while gas usage has declined.”
“China to Announce Cap-and-Trade Program to Limit Emissions,” reported the New York Times last week. President Xi Jinping joined Obama’s global energy constructivism by committing (?) the world’s most populous country–and largest emitter of carbon dioxide (CO2)–to a to-be-determined cap-and-trade program beginning in 2017.
The Obama Administration is leveraging China’s commitment with his own Clean Power Plan to try to get other countries to sign on to a global accord in Paris this December. But these are paper promises by sovereigns who surely know that there is no guarantee that the next Administration–or Congress–will have any appetite for continuing the futile crusade to ‘save’ the climate. What is happening now is “good PR for China, but a bad deal for the US.”
Cap-and-trade for CO2 emissions is high on transaction costs and wheeling-dealing and low on emission reduction. In Europe, post-Kyoto Protocol (1997 –) coal usage has increased seven percent, while gas usage has declined. An article in Politico explained:
Eni and the other big gas producers argue that coal has benefited from the EU’s dysfunctional Emissions Trading System, which Brussels is now trying to reform. The EU is one of the few regions to have an emissions market, but prices are too low to push power generators to switch to cleaner energy sources. And coal is cheap.
Make no mistake. Cap-and-trade would be just another political play thing for crony socialism. A more sober assessment from the New York Times stated (relying on experts):
It will take years of effort to build a substantial market that plays a major role in curbing emissions, and even then, it could founder, like similar initiatives elsewhere …. The challenges in China are compounded by unreliable statistics, corruption, and local officials who have made blazing economic growth a point of honor. Overcoming these problems will demand far reaching changes to the energy sector, so that trading emissions translates into reduced consumption of coal and other polluting fuels….
Years? By the alarmists own math, including that of climate scientist James Hansen, this will be too late. All economic pain for no climate gain. And lots of waste and cronyism. Enter Hansen, whose strictures against government cap-and-trade programs–federal, state, and foreign–are germane to the new initiative of China.
James Hansen on Australia’s Cap-and-Trade (2014)
“The two main points that I made in discussions in Australia re their cap-and-trade were (1) it would be ineffectual in reducing emissions, and (2) it would be recognized as a tax, and thus it would not survive and grow at the rate needed to phase out emissions.
“Did you know that cap-and-trade is by and for big banks? In the U.S. there is a revolving door between Wall Street and Washington. The skilled trading units at JP Morgan Chase and Goldman-Sachs can make enormous amounts from cap-and-trade, every dime coming out of the public’s pockets.
“The fluctuating prices are bad for our purpose. If the public, businesses, and entrepreneurs know that carbon prices will continue to rise, as in fee-and-dividend, they will begin to make the choices that move us rapidly to a clean energy future.
“The half-baked 3000+ pages of the Waxman/Markey cap-and-trade scheme in the U.S. (and scheme is the right word) were not written by our Senators or Representatives slaving into the night. They were written by lobbyists for special interests and stapled into the bill by our elected representatives, who are beholden to the special interests.
“Our representatives, in both parties, seem to feel entitled to the Washington life style, once elected. Did you know that Dick Gephardt, after retiring as House Democratic Leader, received $120,000 per quarter from a single source (Peabody Coal)? I doubt that Peabody wastes its money — they probably get their money’s worth in lobbying. I don’t mean to pick on the Democrats; one party is not noticeably better than the other in this regard.
“We seem to have a situation where members of both parties like their status and don’t really want to stanch the money flow. And the electoral system has been pretty well rigged such that it is very hard for a third party to rise.”
– James Hansen, Facing Facebook: Australia’s Cap-and-Tax, July 29, 2014.
James Hansen on California Cap-and-Trade (2012)
“You don’t want [California’s] system with caps, where you have trading, you have derivatives, you have markets that then collapse and don’t actually reduce emissions much. That’s been tried in Europe, and it didn’t do much.”
– James Hansen, quoted in David Baker, “James Hansen Blasts Cap-and-Trade,” San Francisco Chronicle, December 5, 2012.
James Hansen on Federal (Waxman-Markey) Cap-and-Trade (2009/2010)
“Cap-and-trade’s complexity provides a breeding ground for special interests…. Why do those special interests deserve it anyhow?”
– James Hansen, “The People vs. Cap-and-Tax,” New York City, January 12, 2010.
“The truth is, the climate course set by Waxman-Markey is a disaster course. It is an exceedingly inefficient way to get a small reduction of emissions. It is less than worthless….”
– James Hansen, “Strategies to Address Global Warming,” July 13, 2009.
“Governments are retreating to feckless ‘cap-and-trade,’ a minor tweak to business-as-usual….
“Why is this cap-and-trade temple of doom worshipped? The 648-page cap-and-trade monstrosity that is being foisted on the U.S. Congress provides the answer. Not a single Congressperson has read it. They don’t need to – they just need to add more paragraphs to support their own special interests. By the way, the Congress people do not write most of those paragraphs—they are ‘suggested’ by people in alligator shoes.”
– James Hansen, “Worshipping the Temple of Doom,” 2009.
“The Waxman-Markey and Boxer-Kerry cap-and-trade bills in Congress are larded with 2,000 pages of give-aways to special interests, soaking the public who must pay higher energy prices.
“What is the chance that a United States cap-and-trade law could be a precursor for a global agreement? Zero. There is no chance that China will accept a cap. Nor should they. They are still in the early phase of their economic development.
“[Paul] Krugman says that my suggestion that carbon trading will be an open invitation to Wall Street to again pillage the financial system ‘is bizarre.’ What is bizarre, in my opinion, is his implicit presumption that government regulators can outwit Wall Street executives.
“Congress can write a cap-and-trade bill that tries to exclude Wall Street. But to think that Wall Street will not get involved in carbon profits, directly or indirectly, is naïve. This is a free country. Wall Street banks can buy the companies most affected by carbon price.
“Congress is accustomed to working with special interests. There is a revolving door between Congress and lobbyists. Ex-members know the Washington ropes. The lobbyists wrote most of the pages in the 2,000-page bills in Congress.”
– James Hansen, “The People vs. Cap-and-Tax,” paper delivered to the Chairperson of the Carbon Trading Summit, New York City, January 12, 2010.
“Cap-and-trade is a hidden regressive tax, benefiting the select few who have managed to get themselves written into the … bill…. Think revolving door between the government and Wall Street. Think revolving door between Congress and lobbyists.”
– James Hansen, “I Just Had a Baby, at Age 68,” (2009).
James Hansen on Copenhagen (2009)
“The fraudulence of the Copenhagen approach – ‘goals’ for emission reductions, ‘offsets’ that render even iron-clad goals almost meaningless, an ineffectual ‘cap-and-trade’ mechanism – must be exposed. We must rebel against such politics-as-usual.”
– James Hansen, “Never-Give-Up Fighting Spirit,” November 30, 2009.
“Cap and trade with offsets …is astoundingly ineffective. Global emissions rose rapidly in response to Kyoto, as expected, because fossil fuels remained the cheapest energy.”
“Cap and trade is an inefficient compromise, paying off numerous special interests. It must be replaced with an honest approach, raising the price of carbon emissions and leaving the dirtiest fossil fuels in the ground.”
–James Hansen, quoted in “Copenhagen summit: Is there any real chance of averting the climate crisis?,” The Guardian, November 28, 2009.
“Cap-and-trade is a hidden regressive tax, benefiting the select few who have managed to get themselves written into the …bill…. Think revolving door between the government and Wall Street. Think revolving door between Congress and lobbyists.”
– James Hansen, “I Just Had a Baby, at Age 68,” (2009).
“Other characteristics of the ‘cap’ approach: (1) unpredictable price volatility, (2) it makes millionaires on Wall Street and other trading floors at public expense, (3) it is an invitation to blackmail by utilities that threaten ‘blackout coming’ to gain increased emission permits, (4) it has overhead costs and complexities, inviting lobbyists and delaying implementation.
“The biggest problem with [cap and trade] is that it will not solve the problem. It may slow emissions, but because of the long lifetime of atmospheric CO2, slowing the emissions does little good. As long as fossil fuels are the cheapest form of energy they will be used eventually. There is no hope that cap and trade can get us back to 350 ppm CO2.”
– James Hansen, “Strategies to Address Global Warming,” 2009.
 So what does Hansen want? A carbon tax, a fee-and-dividend, with every penny being rebated to citizens. Such is “clean” tax is a figment of the imagination; proponents admit to the need for border adjustments (tariffs) to penalize those countries lagging in implementing the ‘right’ amount of tax; rebates to lower-income citizens to counter the regressive nature of the tax; and other special provisions for alleged effectiveness and fairness.