[Gary Hunt, President of Scalable Growth Strategy Advisors, posts on energy issues at  his website, Zap! Crackle! Pop! Disruptive Technology, Global Competition and our Energy Future.]

The drama that raised the national debt ceiling without increasing taxes is sending warning shots across the bow for many industries.  The message for energy subsidies, including the tax credits and treasury tax grants for wind and solar, as well as tax credits for oil and gas companies, could not be clearer.  The gravy train is ending because the Government cannot afford it, and political realities won’t tolerate it much longer.

The debt deal did not cut renewable energy subsidies. But it set up a super committee of Congress that must produce $1.3 trillion in spending cuts by Thanksgiving.  This sets up a ruthless competition between all the special interest causes that now get subsidies or tax supported benefits.…

On August 8, 2011, EPA published the Cross State Air Pollution Rule (CSAPR) in response to the court decision, North Carolina v. EPA, 531 F.3d 896 (D.C. Cir. 2008), which vacated the Clean Air Interstate Rule. But instead of building on the lessons learned of successful programs, the rule makes so many changes to the cap-and-trade provisions that pollution reduction is in real doubt. Moreover the changes are so extensive that reliability impacts are possible.

CSAPR Rule

The rule requires 23 states to reduce annual SO2 and NOx emissions to help downwind areas attain particulate matter and ozone ambient air quality standards. This rule replaces EPA’s 2005 Clean Air Interstate Rule with three different cap programs.

A 2012 annual SO2 cap is set at 3,385,929 tons as compared to the recent (average 2008 to 2010) emissions of 5,216,931 tons.…

“Even in flush economic times, carbon taxes would be bad policy. When economies are already laboring under too much spending and are at diminishing-return levels of taxation, implementing a carbon tax would be a mistake.”

– Kenneth Green, Dissecting the Carbon Tax, The American, July 13, 2012.

Open-mindedness is a mark of scholarship. And some great lights of classical-liberal social thought in the 20th century changed their minds for theoretical/empirical reasons from a utilitarian perspective.

F. A. Hayek began as a democratic socialist. Milton Friedman started as a FDR New Dealer and Keynesian. [1] Friedman later in life even moved away from his (naive) view of a fixed-monetary rule where, as he once put it, a computer program could manage the money supply. [2] Turns out that ‘money supply’ is not a fixed, known quantity; turns out that money is a government monopoly subject to politics.…

This summer Australia implemented a new tax on the country’s top 500 carbon emitters, which has already led to significant increase in electricity prices. Meanwhile, on August 2, Congressman Jim McDermott (D-Wash.) introduced his own carbon tax bill in the House of Representatives, which like the Australian tax is targeted at certain disfavored emitters.

Talk of a federal carbon tax has been recently revived by several conservative-leaning groups. Earlier this year Robert Inglis (former Republican Congressman from South Carolina) launched the Energy and Enterprise Institute, a new advocacy group aimed at marketing carbon taxes to Republicans. And last month rumors of carbon tax discussions at the American Enterprise Institute led AEI’s own Ken Green to reiterate his opposition to the carbon tax idea.

What sets the new conservative proponents of carbon taxes apart from traditional advocates is revenue neutrality.…