Just got a release from Jim DeMint about the Lieberman-Warner Climate Security Act. Now I’ve gotta tell ya that what with the last week of the legislative session and the last week before the state primaries and other stuff, I haven’t sat down and studied said legislation. If I were going to editorialize about it, I suppose I would, but who’s got time for that?
This leaves me with sort of a vague sense that it must be a pretty good thing, since Joe says it "would substantially cut US greenhouse-gas emissions" and other good stuff, and Joe’s never lied to me as far as I know.
But now Jim DeMint is trying to double my knowledge of this bill with HIS release, and I don’t have time to read to the end of that, either, but I did read the headline, which says "Lieberman-Warner Will Cost SC Jobs, Could Double Gas Prices."
OK, "cost SC jobs" sounds pretty bad, but then he says it "could double gas prices," which sounds like a move in the right direction, in Energy Party terms, and that’s amazing in itself, seeing as how everybody else in Washington seems to be all about encouraging increased consumption with gas tax holidays and tapping the Strategic Petroleum Reserve and other demagogic doo-dads.
But surely he’s exaggerating with the "double" bit. Now mind you, if we had doubled the price a couple of years ago with a stiff federal tax — jacking it from $2 to $4 a gallon — we’d be paying the same price we are now, have chilled consumption, encouraged conservation, dealt a likely death blow to some of the worst regimes in the world by dropping the floor out from demand, and the extra money would be OURS, in our federal coffers, rather than in the hands of the sheiks and the thugs abroad.
But we didn’t. And I sincerely doubt we’re going to do so now, no matter how brave Mr. DeMint thinks Joe is…
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OK, wait… I believe the DeMint release now! Turns out he’s going by a National Association of Manufacturers estimate that with Lieberman-Warner, the price of gasoline will have doubled by 2030.
Well, duh! I’ll bet it would double by then, and a whole lot more than that, if we’re still dependent on petroleum then…
No new measures can, “substantially reduce greenhouse gases”, because there isn’t much left to reduce, and it will be prohibitively expensive to attempt to do so.
Air pollution from tailpipes and industry has been reduced to 3% of its 1970 levels. Even if we could eliminate that remaining 3%, and have zero emissions, it would have very little impact on us, let alone the world. All the big emissions in the US were eliminated while Reagan was in office.
The big polluters are India, China, Russia, and the burgeoning populations of Africa, South America and Asia, which use the most ancient and inefficient methods of heating and cooking.
Mr. Warthen, if gas prices double, food prices would rise proportionately.
So would newspaper prices.
That wouldn’t help you much. Neither would the money you think would be OURS if the federal government had it, because few, if any, of us would ever see a penny of it or get any benefit from it whatsoever. Neither would doubling the price affect demand enough to make the regimes you mentioned blink twice.
Using taxes to affect behavior is bad science fiction. Chances are, doubling the price of gasoline would just raise the price of everything else and have no effect on demand at all.
Graham is after a snappy sound bite, but the difficulty in evaluating Lieberman-Warner bill is manifold. It was first introduced last summer and all the special / public interests analyzed it and some interesting coalitions formed. More recently California’s senator Barbara Boxer became the floor manager and introduced almost two hundred amendments to tailor the bill. Folks are busily digesting the resulting bill.
Put aside for a moment the obvious political slant of this Wall Street Journal editorial and focus on the details it cites. Note that the bill touches $6.7 trillion in economic output by micro-managing incentives and payouts. That’s an unprecedented number subject to the unintended consequences that legislation always generates. Again, putting aside political preferences, look at the flexibility it gives the Congress in directing / diverting / redirecting credits among not only industries, but also interested parties. It gives an entirely new meaning to pork, payoffs, and the like while creating yet another independent but government-sponsored clearing house.
There’s something for purists of any ideology to hate. Environmentalists are entitled to credits, but so are coal producers and coal-burning utilities, with the amount determined as a result of elections every two years, no?
Here’s the real problem: uncertainty in the legislation and the regulations that the executive branch will have to promulgate. Take a barrel of oil and bring it into the US. The transportation generates little CO2 to tax, but the commodity — oil — can produce a lot. Do you tax the actual CO2 generated or the potential?
The next step, refining, generates a little CO2, but, again, the product can produce a lot. Do you tax the actual CO2 generated or the potential? The law was originally structured to tax the generation, which means that you measure and tax the CO2 generated at each step, not the potential. Which brings us to transportation to retail outlets and, again, little generation of CO2, and then the retail sale. It’s at that last step where the amount of CO2 produced in burning the fuel can be computed and thus paid for. By whom? The retailer will pay, but he’ll collect the amount due from the consumer. That’s where the increased price in the form of whatever you want to call it, a tax or purchasing a credit, comes in.
The same thing happens with natural gas and electricity where the end user, the one responsible for generating the CO2, will pay. Ditto for cable TV, where the provider will pass on the costs. The same for groceries or any other product, where prices will rise to reflect the increased costs faced by all the enterprises engaged in bringing the goods to the consumer.
What’s really a hoot about all this is that the provisions in toto will raise costs to consumers across the board while benefitting those who contribute to our elected officials. Tariffs or duties will be assessed on goods and services from countries that are not controlling CO2, and that means India and China. So technical support, computer programming, computers, and all sorts of stuff will be burdened with additional levies, increasing prices to businesses, government at all levels, and consumers.
Affected countries will file complaints with the WTO, affording additional employment to lawyers who will destroy forests with the paper they file in response.
If climate change is an existential problem, and I don’t think that it is, then let’s just impose a carbon tax. This bill comes at a great time, a period where we should be figuring out how to handle the baby-boomers’ Social Security, Medicare, prescription drugs, and motorized scooters (I want a red one).
A lot of the oil, coal and natural gas are never burned as fuel, so produce no combustion emissions. They are used to produce resins for plastics and paint.
There are literally millions of such things that the environmentalists and legislators have not considered, and cannot manage. That is why the free market does such a better job of letting those with the best information and motives to reduce waste allocate the resources by allocating their money.