Tag: environmentalism

Capping Prosperity, Trading It For Poverty

As the media fixates on the death of Michael Jackson, Congress stands ready to enact the largest and most regressive tax hike in history in the guise of “cap-and-trade.” Jim Lindgren explains why this bill is so dangerous:

The cap-and-trade bill, if passed by the Senate and actually implemented over the next few decades, would do more damage to the country than any economic legislation passed in at least 100 years. It would eventually send most American manufacturing jobs overseas, reduce American competitiveness, and make Americans much poorer than they would have been without it.

The cap-and-trade bill will have little, if any, positive effect on the environment — in part because the countries that would take jobs from US industries tend to be bigger polluters. By making the US — and the world — poorer, it would probably reduce the world’s ability to develop technologies that might solve its environmental problems in the future.

Cap-and-trade is a joke—it is a policy that has already failed in Europe and in virtually guaranteed to fail here in the United States. By giving in to the demands of radical environmentalists, Congress is preparing to take our current recession and plunge it into depression.

As the media focuses once again on celebrity, the advent of the next Great Depression comes closer. Cap-and-trade is terrible policy enacted for foolish reasons, and we will all pay the price for it if we allow it to pass.

Want To “Save The Earth?” Get Rich

In The New York Times, John Tierney has an excellent column about why getting rich is the best way to improve the environment:

As their wealth grows, people consume more energy, but they move to more efficient and cleaner sources — from wood to coal and oil, and then to natural gas and nuclear power, progressively emitting less carbon per unit of energy. This global decarbonization trend has been proceeding at a remarkably steady rate since 1850, according to Jesse Ausubel of Rockefeller University and Paul Waggoner of the Connecticut Agricultural Experiment Station.

“Once you have lots of high-rises filled with computers operating all the time, the energy delivered has to be very clean and compact,” said Mr. Ausubel, the director of the Program for the Human Environment at Rockefeller. “The long-term trend is toward natural gas and nuclear power, or conceivably solar power. If the energy system is left to its own devices, most of the carbon will be out of it by 2060 or 2070.”

The best way to “save the environment” is to grow the economy and embrace new technologies. That means stopping our irrational fear of nuclear power. That means working to make solar a reasonable means of producing power. That also means, however, that we can’t just let some government bureaucrat decide what is best—we have to have a competitive marketplace for green technologies in which the best system wins.

It also means that we must stop looking at dangerous and economically unsound policies like “cap and trade”. As this article notes, cap and trade systems do not work and fail to reduce CO2 emissions while simultaneously hurting the economy. That kind of strategy will reduce capital that can be applied to new technologies, raise the price of energy through the roof, and end up raising the cost of living for everyone, disproportionately hurting the worlds’ poor who cannot pay extra for their electricity. Such a program would end up turning into a massive tax increase on America’s vulnerable middle class. Cap and trade is not the right solution.

The right solution is a system that fosters innovation. That means reducing the barriers that keep green technologies off the market, and giving tax incentives to those willing to take the risks of bringing new technologies to market.

Finally, we have to stop believing the cheap energy and green energy are opposed to each other. Basic economics teaches that as supply goes down, costs will go up. If we are running low on fossil fuels, then the prices for those fuels will only rise until the cost of “green” energy is substantially less. At that point, without of hint of government intervention, there will be a green revolution.

But government doesn’t want to wait. By scaring people into seeing an environmental “crisis” they want people to give them unprecedented power and control&madsh;power and control that they can use and abuse. Yes, we need a clean environment. But we don’t need scare tactics. We must take measured and rational steps rather than being frightened into radical and ill-conceived ventures.

200 years ago the streets of every major city were awash in horse manure, water supplies were unsafe, and soot darkened every building. Today, we have made incredible advancements in expanding human quality of life without damaging the environment. Tomorrow, who knows how far we will come if we abandon the politics of environmental fear and embrace the value of human ingenuity and the entrepreneurial spirit.

The First Law Strikes Again

Reding’s First Law of Public Policy: Every public policy has negative side effects, and the more idealistic the policy, the more detrimental the side effects.

As part of the recent energy bill, Congress and the President mandated a rise in the CAFE standards that would require each new vehicle in the United States to get 35 miles per gallon by the end of the next decade. GM Chairman Bob Lutz has noted that this will add an average of $6,000 to the price of a new vehicle. That $6,000 is a cost that will undoubtedly be passed directly to the consumer.

The raising of CAFE standards is a perfect example of my First Law of Public Policy. The rationale for raising CAFe standards is to “save the planet” by reducing CO2 emissions. Not only will it fail at that, but it will end up hurting more people than it ever helps.

It will fail for one key reason: new cars are more efficient than old cars. If you want to reduce CO2 emissions, you want to get rid of as many junkers as you can. You want people to buy new cars which take advantage of new advances. By artificially inflating the price of new vehicles, the government has ensured that more older cars will stay on the road. Which offsets many, if not all, of the supposed gains made by raising fuel efficiency standards.

Not only is the impact going to be small, but the costs will be high. One of the reasons why cars burn so much gas is due to safety. Cars have to be constructed with safety cages, rollbars, airbags and other technologies designed to increase crash safety. As any designer will tell you, the best way to increase fuel efficiency is to decrease weight. While we’ve made advances in material sciences which can help, those advances are costly. It’s cheaper to build a steel frame (and better for the American steel industry) than it is to build a frame out of a more exotic material like carbon fiber. But steel is heavy, and if you’re going to have a car that gets 35mpg you need to save every ounce of weight possible.

The costs of these new standards disproportionate effect the poor. Can a single mother pay an extra $6,000 for transportation? Does the middle class need to add another $10,000 to their car payments so that they can take the kids to soccer practice. All this talk about “saving the planet” has blinded people to the real-world externalities created by this legislation. It’s exactly why such rules should not be made so rashly. Yet we will all bear the costs of this new rule, and those who worry about how the middle class is getting squeezed out have a perfect case in point for why the expansion of government is against the interests of the American people.

The benefits here do not even come close to justifying the massive costs: which is precisely why raising CAFE standards was bad policy. The President should have vetoed this bill, but in the rush to appease the fear-mongering over global warming the government has enacted a poorly-considered rule that will add thousands of dollars to the prices of new vehicles, will reduce safety, and will hurt the American steel industry. This is why big government hurts the middle class and why basing policy off of interest group pressure and fear-mongering only hurts American citizens even more.

UPDATE: Steven Hayward advises some caution about Lutz’s remarks. It’s a point well taken, but it doesn’t negate that the benefit still doesn’t justify the cost. Even if the cost is only half what Lutz is predicting, it’s still a major cost for a minor benefit.