Friday, July 10, 2009

Cap and Trade: Ponzi Scheme

While President Obama is in Italy, one of his goals was to build upon the Cap and Trade notion to curb emissions. Major push back came from India, China, and other developing countries that see high-carbon emission energy sources as a requirement to assist in creating economic development in their countries. Dr. James Hansen, Director of the NASA Goddard Institute for Space Studies, wrote in his article G-8 Failure Reflects U.S. Failure on Climate Change on the The Huffington Post:

“For all its "green" aura, Waxman-Markey locks in fossil fuel business-as-usual and garlands it with a Ponzi-like "cap-and-trade" scheme. Here are a few of the bill's egregious flaws:

  • It guts the Clean Air Act, removing EPA's ability to regulate CO2 emissions from power plants.
  • It sets meager targets -- 2020 emissions are to be a paltry 13% less than this year's level -- and sabotages even these by permitting fictitious "offsets," by which other nations are paid to preserve forests - while logging and food production will simply move elsewhere to meet market demand.
  • Its cap-and-trade system, reports former U.S. Undersecretary of Commerce for Economic Affairs Robert Shapiro, "has no provisions to prevent insider trading by utilities and energy companies or a financial meltdown from speculators trading frantically in the permits and their derivatives."
  • It fails to set predictable prices for carbon, without which, Shapiro notes, "businesses and households won't be able to calculate whether developing and using less carbon-intensive energy and technologies makes economic sense," thus ensuring that millions of carbon-critical decisions fall short.”

I agree with Dr. Hansen that “Cap and Trade” is a Ponzi scheme being played out in Congress. The day that the House of Representatives discussed the bill it was comical to watch the wheeling and dealing being done on the House floor to gain the votes needed to pass. Also, there were about 300 pages of change that passed the Rules Committee at the wee hours of the morning on the day the bill came to the House floor. Representatives on the House floor all but admitted that they had not seen nor read the 300 pages. An official copy wasn’t even put together until the debate was nearly done.

If Congress and Obama’s administration are serious about reducing “Green House” gasses than scrap the Cap and Trade notion. There will need to be a transition period from fossil fuel to renewable energy. So let’s plan for that. Phase out coal, natural gas, and oil over the next 15 years.

Over the next 15 years as the fossil fuels are phased out, America opens up our country for oil exploration and place tariffs on foreign oil and natural gas. Wind and solar are not the only uses of power that needs to be explored. During the 15 year phase out, America can build nuclear power plants and remove the executive order put in place by President Carter that prohibits the re-using of spent rods in nuclear power plants.

Nuclear power is reliable and safer than 20 years ago. Nuclear power creates jobs and builds communities. As I wrote in Obama short sighted on summer job program posted June 8th, nuclear power plants creates between 1,400 and 1,800 jobs while establishing between 400 to 700 permanent jobs which are “36 percent more than average salaries in the local area (per NEI).” The Cap and Trade bill does not account for nuclear power in the 1500 pages of legislation. President Obama and Congress scrap the bill and replace with a program that includes and pushes nuclear power. As we phase out the coal plant, we can build nuclear power plants across the street.