Thursday, July 2, 2009

On Cap and Trade

With the passing of H.R.2454 (a.k.a. Waxman-Markley or the American Clean Energy And Security - ACES - Act of 2009) and the subsequent ongoing debate in the Senate, I thought I'd jot a few thoughts.

On Climate Change:
- As I stated here, my view on anthropogenic climate change boils down to: if it is real, it is inevitable
- "My fear is that a solution that is effective, equitable, and enforceable is simply beyond the global community's technical and political ability."
- All economically viable fossil fuels will be used by someone, and the carbon will most likely end up in the atmosphere
- It may already be too late to reverse what has occurred
- This is not to say nothing should be done, but should shade our response to becoming adaptable to the uncertain effects that it could cause
- Crippling our economy does not seem prudent

On Cap and Trade:
- Cap and Trade, as a theory, is my preferred method of reducing greenhouse gas (GHG) emissions
- Preferable to a straight CO2 tax
- Creating a market for negative externalities is a great way to account for their effects
- Should drive innovation
- However, there is something subliminally disconcerting about agreeing to limit the emission of a main component of my very breath

On H.R.2454:
- Seems to do little to actually lower GHG
- Environmentalists don't even seem to like it
- Reducing American GHG does not necessarily equal a reduction of Global GHG
- A non-Global agreement will only shift CO2 production to other locations
- Moves a lot of money around
- Different industries have different allowances
- Heavily influenced by political shenanigans
- Job creation does not necessarily equal economic growth
- Increased energy costs will be crippling to our economy
- Proponents should be upfront about costs
- To reduce atmospheric CO2 levels to "acceptable levels" will require an unprecedented reduction in standard of living
- How will compliance be verified?
- What type of costs and economic inefficiencies will verification schemes add?

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