From the by M.D. Fletcher |
July 2009 |
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I don't know why it's happening, other than perhaps the onset of my much-anticipated senility, but this old rock 'n roll song keeps playing in my head, over and over. I guess it's a bit unsettling. The band that sang it was a one-hit wonder and I think it was supposed to be satirical because back in those days the hippies were clamoring for the government to provide free everything for everybody except of course the rich, who were supposed to pay for it. We've always had this bi-polar attitude towards the rich. On the one hand, we portray the rich as robber-barons, ruthlessly trampling on the rights of others and exploiting the common man to further their own immoral avarice. On the other hand, we want to be just like them. That's why millions of us buy lottery tickets, roll the dice in Vegas and/or enroll in MBA graduate programs. These days there are not as many rich as there used to be. Bernie Madoff took care of a slew of them right out of the chute and the economy finished off most of the rest in pretty short order. Those few that are left must be feeling a lot like the gopher in Caddie Shack, afraid to poke their head out of the hole for fear of losing their last T-bill to Bill Murray's 3 iron. As for the rest of us, we're happy to have a job. Unemployment is going to hit 10%, General Motors and Chrysler are going to be dissected and then retooled to produce under-powered and over-priced eco-scooters and Starbucks is going to have to start selling real coffee to real people at real prices. When you're worried about keeping your job, latte is pretty much passé. Energy is going to be the next big financial problem. Global warming has won the debate and one way or another, Congress is going to tax carbon emissions, particularly as they relate to the use of coal in the generation of electricity. |
This is a very big deal for a lot of us since 80% of the power consumed in the United States, except for the east and west coasts, is generated at great big honking coal-fired power plants. and even though all of them employ successful technologies intended to reduce their pollution output, they all produce carbon dioxide like crazy. There is research currently underway into carbon sequestration, meaning pumping all that carbon dioxide down a hole somewhere, but even under the best of scenarios any kind of viable technology is years, if not decades down the road. So it's pretty clear that the boys in the white lab coats are not going to be able to pull our bacon out of the fire. But not to worry, Congress has a solution. Actually Congress has several contending solutions, but they all involve taxation in one way or another. One of them, probably the most onerous, is the so-called Cap and Trade. This is the idea that the government would arbitrarily set a limit on exactly how much carbon is to be released into the atmosphere in any given year by any given power plant (or, for that matter, business). If the limit the government sets is higher then your carbon output, you're okie-dokie. If it's less, you.ve got to either reduce your output or - this is the payday - buy carbon credits from the government. This monetization of carbon creates a whole new bank for the politicians to divvie up to, among lots of other things, subsidize less economic generation technologies. The whole effect would be to artificially raise the price of electricity far in excess of what it would otherwise be. It would also put a lot of people out of work as businesses close up shop and head offshore to friendlier economic climates. The Cap and Trade approach, although exceedingly complicated, expensive and unwieldy, is popular among politicians because it strictly avoids the use of the word "tax". Or they could just say, we need the dough to do all this other cool stuff, so we're going to slap a tax on your power bill that'll make you sprint to unplug your bathroom night light. |
