The Audacity of Cap and Trade

Guest post by Steven Goddard
http://media.economist.com/images/20090418/D1609FN1.jpg

Yesterday, president Obama announced emission standards which he said would raise the cost of automobiles by $1300.

While the new fuel and emission standards for cars and trucks will save billions of barrels of oil, they are expected to cost consumers an extra 1,300 US dollars per vehicle by the time the plan is complete in 2016. Mr Obama said the fuel cost savings would offset the higher price of vehicles in three years.

His remarkable comment caught my attention, because one of the primary purposes of Obama’s “cap and trade” plan is to massively raise the cost of fuel.  There aren’t going to be any fuel cost savings.  In fact, Mr. Obama told the San Francisco Chronicle last year that he actually intends to bankrupt coal fired power plants using cap and trade:

You know, when I was asked earlier about the issue of coal, uh, you know — Under my plan of a cap and trade system, electricity rates would necessarily skyrocket. Even regardless of what I say about whether coal is good or bad. Because I’m capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers.

Two automobile companies are already going bankrupt, so I think we should take Mr. Obama’s words seriously.

I can make a firm pledge. Under my plan no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains tax, not any of your taxes.
Last year, candidate Obama also said :

WASHINGTON – Democrat Barack Obama said Sunday that if elected he will push to increase the amount of income that is taxed to provide monthly Social Security benefits.

Audacity indeed.  The assumption seems to be that no one remembers what was said last week.

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Hal

If these rules stay in place, the US will look like Cuba….old cars will dominate the roads. I would not want to drive one of these light weight sardine boxes and risk my life in a crash. Time to invest in used cars.
Obama has dictatorial tendencies…he knows better than the stupid masses..us

Straight down the path to Communism we go! Set your Hybrids and Plug-Ins to full speed ahead!
These policies will cause used car prices to skyrocket, energy prices to skyrocket, and the cost of everything else to increase by some unknown (large) factor. And who exactly will that impact the most? I suspect those who have the least amount of money in the bank, those with the smaller incomes. Your average $250,000 earners won’t notice much, but those making $40,000, who are already at wit’s end and near financial ruin, are going to get burned. And I do not mean by rising global temperatures.
Complete and utter destruction of everything we know as Americans, and more forced reliance on the government to collect and redistribute. It’s very sad.

Paul Revere

Welcome to the U.S.S.A

Richard Sharpe

In politics, regret is only a bankruptcy away.

Luis Dias

So, you think that Obama is responsible for the bankruptcy of the two automakers?
If not, why the rethorical question?
This kind of demagogy won’t take you anywhere. At least the guys at Climate Resistence know how to make adult arguments.

Mike Bryant

The Texas Constitution
Article 1 – BILL OF RIGHTS
That the general, great and essential principles of liberty and free government may be recognized and established, we declare:
Section 1 – FREEDOM AND SOVEREIGNTY OF STATE
Texas is a free and independent State, subject only to the Constitution of the United States, and the maintenance of our free institutions and the perpetuity of the Union depend upon the preservation of the right of local self-government, unimpaired to all the States.
This says it all. The current regime can only go so far. Most states have similar provisions.

Alan Chappell

having watched and listened to Obama I am of the conclusion that the American public has been listening to a ‘loudspeaker’ without a computer jack.
I would ask all to think what this jack-ass is costing us, California is a fiscal paradise, when in a decline bankrupt the nation on stupidity, a few years ago the man that wrote the Obama program ( Yugoslavia’s Milosevic ) printed a 1000000000 Dinara banknote with a value of $2.00 U.S. Milosevic is no more and now the Dinara has a value today of about 90 to the dollar, Obama is about to start printing the $10,000,000 banknote, if Russia want to win the war it only has to start selling its dollars and who will buy them?

Aron

Watch Britain’s idiot brainwashed youth

We need to make politicians listen! Save the future for our children! The universe will end unless politicians sign the Stop The Universe From Moving Act!!!
REPLY: I don’t usually allow links to facebook on WUWT, but I have edited your comment to link to the video directly. – Anthony

Mike S.

If the cost of gasoline goes to five or six bucks per gallon, it won’t wake many gallons saved to add up to $1300. That’s how the cost savings works! Heck, if gas goes up to $10/gallon, it would only take 130 gallons saved to add up to $1300. The higher the price goes, the more you save – everybody wins!

Excuse me for my audacity; I’m not living in US. Nonetheless, isn’t that a short way to national impoverishment? It’s worrying because wherever God is, the devil is not far behind, i.e. soon Mexico will copy US practices. Here we already can hear speeches on carbon bills, for example.

AEGeneral

They will pass that money on to consumers
And there’s the blame game. Anyone who’s ever read a left-wing blog knows that the outcry will be directed squarely at the companies who raise their prices rather than the people who enacted cap & trade.
And I’ll feel like I’m living in the parallel universe of uneducated idiots all over again. Seems to happen more & more often these days for some reason.

Gary

Luis Dias,
The current president is only symbolic of the mindset that is responsible for the bankruptcy of the two automakers. He made the comments, so he takes the criticism here. Governments never run business and economies well. Even their “success” stories – militaries and postal services – are repleat with horror stories and failures. Free market businesses, for all their faults, at least enable people to survive and even thrive most of the time. When they fail, it often is because of government or behavior in the business that mimics government behavior.
What is certain is that mendacity rules in Washington, DC regardless of party or person.

Mike Bryant

A few thoughts from a patriot.
To say that any people are not fit for freedom, is to make poverty their choice, and to say they had rather be loaded with taxes than not. -Thomas Paine
When men yield up the privilege of thinking, the last shadow of liberty quits the horizon. -Thomas Paine
That government is best which governs least. -Thomas Paine

Allen63

I sincerely wonder if the horrifically expensive “plans” being announced weekly by our new administration represent the juxtaposition of a desire to do good with scientific ignorance and economics ignorance.
Or, are they a premeditated scam by some corrupt politicians and predatory businesses to transfer our money into their pockets?
Probably a scam. Why? Because cheap, effective solutions to the presumed AGW problem are dismissed out of hand (e.g. nuclear energy could replace coal entirely in the USA for the cost of the first 8 years of Cap & Trade or the combined “bailouts/stimulus” costs — and provide jobs building the plants). Meanwhile, the expensive solutions are being “rushed” through without serious debate. Seems like “scam” tactics to me.

Jim

Aron,
As a good friend told me as to what ‘youth can do to fight climate change’…
He said that youth are actually the number one problem in new sources of CO2.
They have consumed enormous amounts of energy to date…more than any previous youth generation. They are about to consume a whole lot more…first car/first house/first family/first set of electronics/first airplane rides, etc. They are about to cause (if they haven’t already) the largest government regulatory environment ever, the largest set of new taxes ever and the largest per capita (cheap) energy reduction ever.
Whether I believe him outright or not, his points are interesting to ponder. The younger generation thinks they are going to reduce CO2 emissions and save the world from climate change, but their generation’s mere presence on this planet may negate the whole argument…
Jim

Gordon Ford

Tronto Stock Exchange Commodity Index is up 3.4%. If this continues (and I expect it will) this will lead to Dangerous Anthropogenic Inflation. If one thinks that AGW was bad wait until they need a wheelbarrow to cart their money around in.
PS, I’m heavily invested in Natural Gas, Oil and Coal. Think of all the energy required to install all that new renewable green energy and the back up required when the sun don’t shine and the wind don’t blow.

Zammy

“…Mr Obama said the fuel cost savings would offset the higher price…”
Obama is running our personal buying decisions now! You don’t have to worry anymore, Obama takes care of how much you spend and earn, and HE knows what is the best car for you!
Wait a few years, and Obama will simply buy a car for you (Made in China, the land of no carbon limits)

Michael Alexis

Luis Dias (08:32:19) :
So, you think that Obama is responsible for the bankruptcy of the two automakers?
If not, why the rethorical question?
This kind of demagogy won’t take you anywhere. At least the guys at Climate Resistence know how to make adult arguments.
+++++++++++++++++
He didn’t say that. He said, “Two automobile companies are already going bankrupt”. The implication is that Obama’s policies will bankrupt MORE companies, NOT that Obama is responsible for the current bankruptcies.
This site is used to a higher level of reading comprehension in its troll population than what you have displayed.

Antonio San

Brainwashing indeed!

CodeTech

Yeah, it seems the intent was that the $1300 would be offset by the need to buy less fuel… apparently “communication” was never a strong point for this crop of politicians (then again, if they were to actually “communicate” their intentions they’d probably be dragged through the streets by angry mobs).
“I’m from the government, and I’m here to help…”

neill

Luis Dias (08:32:19) :
Luis, what is your adult argument demonstrating the pro’s of adding a $1300 ‘tax’ to the price of a new car (during a severe recession) for
a} automakers
B} auto buyers
c) auto unions
d) U.S. economy
?

Michael Alexis

Also Luis:
Please highlight any question, rethorical(sic) or otherwise in this article. Can’t find a single question mark in the whole thing.

John G. Bell

Cap-and-Trade is one of Obama’s heartfelt follies. Every time he talks energy policy our president takes on the glassy eyes of the fanatic. With so much wrong and the need of intelligent policy so great, it is a field that a person of his ability could perform wonders had he been properly grounded in the facts or surrounded by capable advisors.
So we find ourselves in the position that Eisenhower warned us about in his farewell address. Here follows what he said then.
“Akin to, and largely responsible for the sweeping changes in our industrial-military posture, has been the technological revolution during recent decades. In this revolution, research has become central; it also becomes more formalized, complex, and costly. A steadily increasing share is conducted for, by, or at the direction of, the Federal government.
Today, the solitary inventor, tinkering in his shop, has been overshadowed by task forces of scientists in laboratories and testing fields. In the same fashion, the free university, historically the fountainhead of free ideas and scientific discovery, has experienced a revolution in the conduct of research. Partly because of the huge costs involved, a government contract becomes virtually a substitute for intellectual curiosity. For every old blackboard there are now hundreds of new electronic computers. The prospect of domination of the nation’s scholars by Federal employment, project allocations, and the power of money is ever present — and is gravely to be regarded.
Yet, in holding scientific research and discovery in respect, as we should, we must also be alert to the equal and opposite danger that public policy could itself become the captive of a scientific-technological elite.”
I think AGW theory the nightmare realization of Eisenhower’s fears. The above quote is often edited out of video of his farewell speech so it is well worth finding an unedited version.

jon

I don’t put much faith in the role of AGW with respect to climate but I DO believe in conservation … oil supplies are rapidly dwindling … it is crazy and totally irresponsible to treat oil as if it were a renewable resource! I think Obama is on the right track here. It seems a shame that some people on this site are more concerned about the cost of gas than they are about future generations!
Jon

Andrew Parker

Obama’s interference in the running of Chrysler and GM forced them to choose bankruptcy. Obama’s interest is not in preserving the corporate/capitalist structure of the automobile industry, but to supplant it with direct bureaucratic control. The goal is to preserve the union, after it has been corporatized.
In a socialist’s view, the State (singular — not plural) must have total and complete control. Anything less allows obstructionism.
AGW is an effective MacGuffin for the socialist’s script.

realitycheck

democracy, democracy, where for art thou democracy?
I am genuinely afraid for all our futures

INGSOC

New for the 2010 line up of Government Motors! The 1956 Trabant! Roomy! Stylish! Needs to be pushed up hills!
http://en.wikipedia.org/wiki/Trabant
Oh the humanity…

GW

Hal (08:17:31) :
You are absolutely correct. Seeing this coming for about a year now, last fall I purchased two 1998 Jeep Grand Cherokees with the big 5.9 litre engines. Both were low mileage gems and cost less than $10K for the two. My wife was not supportive, until I convinced her that in just a few years time cars like these will never be available again – the Prius will become the new Escalade.
Being a car guy, I expect to keep these two Guzzling SUV’s for the next 30 years or more, barring of course a wreck or theft.

Richard deSousa

I would have said “The Stupidity of Cap and Trade,” given that our economy is still vulnerable and on life support. Draining away the consumers’ spending power for Cap and Trade is idiocy.

John Boy

George Monbiot has written another article on the doom we all face from GW. Apparently, some in the comments section are expecting to hear from WWUT folks.
Danphobic says…
**think we all know that the guys at whatsupwiththat.com have proof that all of the scientists and experts in the world are wrong about this. I’m sure we’ll see some of the links presented here in a few minutes when they hear that GM has written an article.*** LOL
GM thinks the ‘modeling’ done by MIT has some credilibilty!
But he doesn’t understand that most of these peer reviewed scientists are simply parroting the AGW line and finding… manufacturing evidence to support it! (making sausage as some refer to it)The question I suppose is how many are conscious conspirators in the GW conspiracy. The false tide sweeps them along.
WWUT will keep them honest!
The Boy of John

Anthony iwould just like to draw your attention to this article publish in “The america, thinker”, from an article in Spegiel.
http://www.americanthinker.com/blog/2009/05/paradox_of_carbon_cap_and_trad.html
What it means is because of the law of supply and demand, carbon trading will not result in a gram of co2 saved. Even if nuclear is built then the carbon credit, would just be used elseware, to release carbon.The overall effect could be to increase co2?

Mikey

Although I’m on Steven’s side of the issue, I have to agree with Luis Diaz. That’s a pretty fragmented argument in the article. The connection of all the pieces isn’t clear. It’s more like the points one might put together before writing the actual article. As it’s presented it doesn’t appear to address the sentiment in the title.
That’s the problem with explaining Cap and Trade to the general public, I think. It’s so complex in it’s application, and spin-off implications it’s pretty much impossible to communicate the dangers in a short piece. That makes it advantage theirs in the information wars, because they can simply offer a few truthyisms which appear to support the general reasoning supporting C & T, then simply expect the public to ignore the complexity, and trust them to deal with it. You can do that when you’re running the show, but not when you’re critiquing it.

It’s not just the youth.
How will the overwhelming cafe standards affect your purchase of your next car. IT WONT! You will still by the vehicle you can that fits your needs.
The plans of our government only make sense if you consider they want more power. The beautiful message of socialism is the same as it has been for a century, there is no question the quality of the result. You can look at any country on earth and see it directly.
Now that GM is being taken over by the government what have we got left?
-Not too damn much and we keep importing illegals who have no idea that things don’t work like this.
The kids in the video are no more ignorant than the parents that raise them and they are VERY ignorant.
========
Luis,
“So, you think that Obama is responsible for the bankruptcy of the two automakers?”
Nope, the unions are and the Dem’s under Obama will back their pay to the end of America rather than give them the absolutely required pay cuts. In fact this result is exactly what the democrats (and some republicans) want.
====
I will never buy another GM vehicle until the government gives up control and I strongly recommend all of you do the same.
=====
I just got notice that another customer of ours went bankrupt, second one this month that won’t be making their bills to us. Something I blame on the other government run companies intentionally buying bad loans from banks who were pushed by politicians to loan to unqualified borrowers.
Wake up and keep your noses to the grindstones and next time a politician tells you he actually wants to bankrupt the energy suppliers – listen.

Skeptic Tank

Mike Bryant (08:40:21) :

This says it all. The current regime can only go so far. Most states have similar provisions.

They can only go so far?!! The Federal Government intends to regulate, control and tax A MOLECULE!! A molecule on which all life is based. You don’t need to go any further than that. That pretty much covers everything.

Let’s see the math:
I drive a 40 mile round trip to work every day so 40 miles * 5 days * 50 weeks = 10000 miles per year. To make the math easy let’s say my F150 gets 15mpg (true) and Obama doubles that to 30mpg. That takes my gallons used per year from 667 (4800/15) down to 333 (4800/30). That is a difference of 334 gallons. So take Your $1300/334 gallons saved and that comes out at $3.89 a gallon.
I guess that means that the big O is going to raise gas prices to make this work. I performed the same calculation for my wife’s Honda (30mpg) that I actually drive to work (green conservation: I’m conserving the cash in my wallet) and gas has to go up to $7.78 a gallon to make this work out. You might as well keep your old acr for as long as you can!
I’m betting that my F150 will no longer pull my travel trailer when it’s engineered to give 30mpg!

Jim G

The frightening thing in my mind, is that this wasn’t kept secret before the elections. Not that McCain was any better.
This is what the people of the good ole USA have chosen.
Be careful what you wish for….
Of course, in 3 years, 7 if he’s re-elected, people will really be wishing for a change.

Nasif Nahle (08:51:03) :
“Excuse me for my audacity; I’m not living in US. Nonetheless, isn’t that a short way to national impoverishment?”
Could you please move here and become a voting citizen? I would trade a thousand of our “head-in-the-sand” voters for one like you!

NC

Gary the last I looked it was deregulation of banks, read free market, that got everyone into this fiscal mess. In Canada the banks are more tightly regulated and thus survived quite well. Looking for a safe place to put whatever money you have left, look north, I did.

Frank Mosher

Gordon Ford. I too am invested in conventional energy. It seems unlikely to me that vehicles will run, in any large way, on non-petroleum energy at any time in the near future. Regardless of the political class. It is my experience, trading commodities, that prices react much more quickly to changes in supply, rather than demand. No drilling+no new refineries=cap on supply=higher prices. The political class will no doubt find a scapegoat, and it won’t include them. fm

They keep asking why isnt the united states like Europe, their cars get a lot better gas mileage than the USA.
There are two important differences. In Europe, people are encouraged to buy cars with diesel engines. The fuel tax is much less on diesel so it costs much less to the consumer, to make up the difference in higher diesel car purchase expenses. Diesels save gas in Europe. Also in Europe, the engines are so small, they must use manual transmissions to get enough torque from them.
In the USA, the govt does not like diesel engines, they think particulate from diesel engines cause cancer. In Europe diesel soot is just soot. Here it causes cancer. Americans also do not like to drive manual transmissions.
So unless we embrace both diesel engines and manual transmissions, we can not follow Europes lead with improved fuel mileage. There are also almost no SUVs in Europe, the station wagon is their SUV. It is hard to imagine that the Pick-up, V, and van will mostly all go extinct, at least as we know them, in the next six years.

manbirdpig-flu

Google “Obama Deception” – a film really worth watching – and not just for Americans.
+ There was an “Obama youth corps” video – a freaky militant style commercial by “City Year” – out there also – however, looks like it’s no longer available at youtube “due to a copyright claim by City Year”…

Mike Bryant

“Skeptic Tank (09:45:28) :
They can only go so far?!! The Federal Government intends to regulate, control and tax A MOLECULE!! A molecule on which all life is based. You don’t need to go any further than that. That pretty much covers everything.”
You’re right Skeptic. And when the Supreme Court is fully stacked, anything they wish will then be constitutional. If the outlawing af a life-giving trace gas becomes constitutional, what are the states options? When the entire federal government becomes crazed, what are the options? Many states are starting to look at secession.

Dean

Communism and Cuba!
The AP article in my morning paper said that pickups would become too expensive for most people and would only be used for work. Phooey.
Sounds like alarmism, like how seat belts and cat converters would drive the car companies bankrupt.
We will adapt.

NK

Dear NC–
truly moronic. But like most morons you do stumble on a truth. With Harper, Canada has a more conservative, market supporting, and fiscally responsible government at this point than the crew in Washington, so I do fancy Canada’s chances better than the US’s.

Chuck L

Although the Democrats control the Presidency, House & Senate, I read that some Democrats. mostly the younger and/or newly elected, are getting uncomfortable with this Administration’s policies. Everyone who believes that our country is being forced into a Socialist Economy and that our individual inalienable rights are being taken from us must call, write, and e-mail their elected representatives, and remember, there are Congressional elections in 2010. If Americans are not willling to vote in these elections, then they deserve the government they have and will experience the decline and fall of a great country.

UK Sceptic

Brownism is alive and well and intent on destroying the US economy. The coal-fired power station wrecking programme is insane. Better stock up on the candles and lamp oil, folks…

Pofarmer

oil supplies are rapidly dwindling …
Yeah, well, except they’re really not.
isn’t that a short way to national impoverishment?”
Yeah, pretty much. If there WERE any recovery, this administration would tax it away forthwith.
Gary the last I looked it was deregulation of banks, read free market, that got everyone into this fiscal mess
What’s got us into “this mess” is TOO MUCH DEBT at all levels, and encouraged by the govt. The numbers aren’t hard to find.

Leon Brozyna

The right hand giveth and the left hand taketh away.

Peter

All this Cap and Trade will be a nice addition to Extraordinary Popular Delusions and the Madness of Crowds, by Charles MacKay, written in …1841. No difference whatsoever …
“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, and one by one!”
“Of all the offspring of Time, Error is the most ancient, and is so old and familiar an acquaintance, that Truth, when discovered, comes upon most of us like an intruder, and meets the intruder’s welcome.”

george h

Cap and Trade is a reasonable and economically sound approach to dealing with a pollutant or other externality. But CO2 is NOT a pollutant!
Increasing the partial pressure of CO2 will have a net positive effect on the biosphere truly making the planet a greener place and increasing world food production. Instead of Cap and Trade, given what we know about basic plant biology, It would make more sense to reward those industries which contribute increasing CO2 levels in the atmosphere.