Cap-and-trade requires strict oversight

Cap-and-trade requires strict oversight
By KEN MIDKIFF
Published Friday, May 1, 2009
(http://www.columbiatribune.com/news/2009/may/01/cap-and-trade-requires-strict-oversight/)

If, in spite of all the information collected by reputable and credible scientists, you’re one of those global warming skeptics, read no further. This column might be harmful to your mental health.
Cap-and-trade.

We’ve all heard the terms, and apparently the Obama administration will at some point propose this, but what exactly does it mean?

The best I can deduce, it goes like this: Let’s say Company A does not emit any CO2 at all. Carbon dioxide emissions collect in the upper atmosphere and are the main contributors to global warming. The U.S. Supreme Court ruled that the Environmental Protection Agency must regulate such emissions.

Company B, on the other hand, emits tons and tons of CO2. Under the “cap,” Company B’s CO2 emissions would be limited. So, Company B buys CO2 credits from Company A — that’s trade.
No problem with the cap, assuming it will be at a level that severely restricts CO2 emissions. As yet, that limit or amount is unknown — various levels have been examined but none proposed.
There is a modest problem with the trade, but it is assumed that there will be an overall reduction of CO2, enough that the Antarctic ice cap won’t melt, sea levels won’t inundate New York City and bananas won’t be grown in Montreal.

Akin to all things regulated, there is a hitch — and here is where I likely part company with the proponents of cap-and-trade. The hitch is that many of the companies are akin to Company B — they emit enormous volumes of CO2, and they are rich and politically influential. Chances are they will seek an exemption, claiming high costs for reducing CO2 emissions and loss of jobs. They will threaten to go to countries where cap-and-trade doesn’t exist. Compliant politicians will likely put pressure on the EPA to allow emissions well above the cap and allow the polluting companies to purchase credits that allow them to continue their emitting ways. We’re already hearing that, even before the parameters of cap-and-trade are established.

The current thinking is that there’ll be a federal entity in charge of the trades. Whether or not that entity will bow to political pressure and allow industries similar to Company B to buy all of Company A’s credits and continue emitting CO2 at the current level remains to be seen. It all depends on the insularity of the cap-and-trade board — whatever it will be called. The hope is that there’ll be an overall reduction of CO2 and energy companies will turn to less-polluting methods of generating electricity — from coal-fired to wind and solar. Such a move, the hopers say, will create new jobs. But, I hasten to note, at this point it is just a hope.

Then there’s that niggling little problem of countries that won’t limit or cap CO2 emissions. While the United States might do its part to reduce CO2 emissions, global warming is a global problem, which means every country — particularly developing nations such as China and India — must reduce emissions. Otherwise, the whole thing falls apart.

In a previous column, I cited data that indicated concentrated animal-feeding operations are economically harmful to rural communities. Certain CAFO operators took exception to my use of data, as did one agricultural organization that, coincidentally, sells enormous amounts of grain to CAFOs. As I have said before, while my conclusions might be arguably wrong, I don’t make stuff up. While CAFO owners might not like the factual data, all they need to do is check. All the information I used is easily accessible to the public. Denial of reality doesn’t make it true.