Understanding Cap & Trade

Today we find Obama pushing Cap & Trade legislation and calling it the new economic foundation of our country. Let’s explore that for a minute with an ear bent toward echoes of his promises before his first day in office. Obama promised to “fundamentally change” America. His first year in office has truly been evidence of that with massive government power grabs, a takeover of the healthcare system, seizure of automakers, and deficits never seen before. When he said “fundamental” he meant it. In fact, that kind of talk suggests changes at the level of our country’s roots; something akin to altering even our DNA.

The results of this kind of change have struck fear into the hearts of Americans in all political parties, and well it should. So today when Obama says that climate change legislation will become the new economic foundation for our country, you might better listen. As if the old foundation is bad, the new one promises what? To understand what the new foundation really provides, you have to understand the basics of Cap & Trade, and the business of the trade and sale of carbon credits. So I attempt here to explain in a simple way how this works and what the real effect is on each of us.

The government has declared, by using flawed science, that the earth is warming because of what humans are doing. It is our fault. And it is the fault of industry, and power companies, and car companies, and cows and, and, and,… it seems today that everything has the ability to place a “carbon footprint” on the environment. This makes sense, as everything on this planet is carbon-based, even humans. Once this governmental decree is accepted, as it was mandated by the Kyoto Protocols, the government then must empower itself to set limits on carbon (or greenhouse gas) output. Each country has a benchmark figure as a goal, and the country is then responsible to police its citizens and industry to be sure that these goals are met. The way that industry is motivated is more like a stick than a carrot. To put it simply, if a power plant or any other carbon-producing structure is putting out more carbon than is allowable, under arbitrary government regulation, the government is free to fine that facility or company for its violation of “green regulations”. Conversely, if a facility is meeting or beating benchmark figures there is a carrot; Tradeable carbon credits are issued to that company that are redeemable for cash from anyone that needs them.

Who might need the credits? Some company that must either purchase credits from a company or country that is more green or pay a hefty fine. Thus, we punish the offenders, and reward those that are greening up the planet. It sounds pretty nice. The problem is that America will have almost zero immediate success at meeting these emissions goals. However, undeveloped third world nations which have constructed “green” facilities, power plants, wind farms, biomass facilities and other “renewable” energy sources will easily meet these goals. It really doesnt matter to them that these technologies are still in development, and are largely inefficient. Neither does it matter that these technologies are immensely expensive to develop. Why? Because the leaders of these places know that they won’t pay for these projects. Who will then?  We will.

American companies and individuals will be forced to pay heavy fines or buy, with cash, carbon credits from these undeveloped nations to offset their “dirty” energy production. These additional costs will be passed on to consumers.. American consumers in the form of higher energy costs.

The real goal of all of this is socialism on a global scale. Heavily developed societies such as ours will be forced by our own governments to redistribute our income and our wealth to undeveloped places in financial terms that are mind boggling. Is Cap & Trade good for us? No it is not. Does it produce less carbon and greenhouse gasses? No, it just costs us more to buy what we have been buying.

So why do it? Ask the globalists, I am sure they have an answer that has a lot to do with their own piggybanks and less to do with the betterment of humankind. What is the new economic foundation? Clearly the foundation rests on backs of Americans to the benefit of the rest of the world. It is a withering punishment for our accomplishments and achievements as a nation. What a foundation that is, no?