Whiteboard Cap 'n' trade
If I wanted to devise a way to slowly squeeze the life out of the worlds economy and create absolute poverty, I would enact a cap and trade policy. It should be renamed " anaconda", the deliverer of death and destruction.
Wasn't this the idea the enron guys came up with?
I'm not saying I have all the answers but I can say definitavely that Cap and Trade is a horrible idea. This only hurts consumers by jacking up prices. If a company wants to say "go green" then all of their money is tied up in buying carbon credits so that they can function today. If all of their money is tied up doing that, where does the money come from? From the consumers.
Implementing something like this will increase the cost of doing business, which will increase consumer prices for bare essentials. The truly horrible piece of it is that it increases exponentially, not just doubling.
Consider that if my electric bill doubles that most likely means that all of them doubled, including businesses. Businesses now have to charge more for goods because the cost of doing business went up, it's a ripple effect that has no end.
At this point in time a doubling or more of energy prices when we're just starting to get out of an economic down turn would be a nail in the coffin of our entire economy. If we're not spending now, just wait until more of our hard earned dollars are being funnelled away.
wow you just proved that Cap and Trade in the US will totally kill our economy. Since we don't produce anything now let's put a cap on it!
This is interesting but clearly a "consumption" tax would be more straightforward and would minimize sketchy behavior by corporations and individuals. If Cap'n trade offered the boys a percentage of the profits of the pies that are sold instead of eaten, he'd realize a similar result and would have a better alignment of interests with all of the stakeholders....just my humble opinion (JMHO)...
milton friedman would be sad at this.
Great illustration. However, you need to illustrate part 2 that shows the costs to the industries and people.
I work for an electric utility in Nebraska. 60% of the electricity in the United States is generated by coal.
Everyone wants clean air. Wind is great for producing electricity if the wind blows. The central US is windy, but wind does not blow all the time. We need to have back up (produced by coal) electricity unless you want to flick the switch and experience darkness when it is not windy.
Electricity produced with a nuclear plant is the cleanest. However, a nuclear plant has not been built in the US for 25 years. A new one would cost billions of dollars. The nuclear technology and equipment has gone to other countrys because we have not built one for so long. The regulations are very stringent and no one wants the waste.
If cap and trade goes into effect, our electric rates in Nebraska would go up 150%!! I think of the industries in Columbus, Nebraska. The production would go to Mexico. I think of our customers who cannot afford to have their electric bills go up 150%.
The solution to cleaner air is to go slowly on this so there is an opportunity for clean coal technology to be developed.
Thanks, for another excellent white board. Wonderful series!
Although I think reduction of CO2 is a noble pursuit, cap and trade is not the answer.
First, this system essentially puts the government in charge of our economy--probably not the best idea, given the government's track record of waste and corruption.
Second, C&Trade is essentially a huge tax upon industry and consumers.
Third, if it will cost businesses more to operate in the United States they will move elsewhere, e.g., the decline in IPOs since the enactment of Sarbanes Oxley.
Neither China or India have such schemes in place, once again our politicians are putting the U.S. at a disadvantage. If you really want to curb CO2, the entire planet needs to be involved.
Trying to watch the cap and trade segment May 28, 2009, but no video. :( Just audio, and broken up at that. What gives?
Thank's paddy for your explain...
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