Cap and trade is a license to cheat and steal
By: William O’Keefe
Special to The Examiner
May 19, 2009
One of James Bond’s first movies captured attention with the title “License to Kill.” Today, Washington, D.C., is setting the stage to compete with Hollywood in the sensational headlines market. Members of the House Energy and Commerce Committee are in the process of scripting climate change legislation worthy of being titled “License to Cheat and Steal.”
This cap-and-trade bill — actually called the American Clean Energy and Security Act of 2009, or the Waxman-Markey bill — would mandate severe reductions in U.S. greenhouse gas emissions. Since emissions are mostly generated by energy use (heating your home, cooling your groceries, driving to work, etc.), these targets would effectively mandate energy rationing. Since these targets are not based on economic or technological realities, there can only be one outcome: much higher energy prices.
Severe limitations on emissions could easily turn well-intentioned policy into an opportunity for shady moneymaking schemes at the expense of the environment and American households.
Research indicates that implementation of a U.S. emissions market could drive up energy costs for Americans anywhere from $324 to a whopping $3,100 per year. And because low-income families spend a greater percentage of their earnings on energy, this burden would fall heaviest on those least able to afford it.
In contrast, the financial benefits would be enjoyed by Wall Street opportunists and special-interest groups. The government-regulated trade of carbon dioxide opens the door to the creation of risky financial tools like the derivatives, hedges and credit default swaps that led to our recent economic crisis and the scandals associated with it.
Anyone who doubts this risk need only look at the experience of Europe’s cap-and-trade system. Not only has it been plagued with fraud and abuse, it failed to meet its emissions-reduction targets.
The complex and cumbersome nature of the trading system makes effective oversight by both voters and regulators a daunting challenge, opening the way to influence by special interests. Media reports show that bureaucrats have allowed a major utility to write a provision for the Waxman-Markey bill, which favored a handful of companies and disadvantaged their competitors. This opportunity for manipulation skews incentives. Instead of encouraging R&D in cleaner electricity, cap and trade gives utilities a strong incentive to invest a lot of money in lobbying efforts.
As the European trading system demonstrates, this policy creates a legal gray area, equipping future Enrons and Bernie Madoffs with a license to cheat and steal.
The draft Waxman-Markey bill touted on Capitol Hill includes a provision that allows covered companies to buy emissions offsets or emissions allowances rather than reduce their actual emissions. (This is the modern-day equivalent of purchasing indulgences from the Church that allow you to buy off your sins.)
But the legitimacy of these offsets has proven difficult to verify. Europe has already witnessed companies paying themselves for offsets and firms building plants for the sole purpose of receiving tax dollars to shut them down.
The closed-door deals already being made in Washington, D.C., indicate that a U.S. system would likely suffer from the same manipulation. And once the trading begins, there will be a need for a futures market, mechanisms to hedge risks and financial instruments like credit default swaps.
With permits worth in excess of $100 billion, traders will gain handsomely and have an incentive to create mechanisms for additional financial gain, setting the stage for a repeat of the financial abuses America witnessed in the subprime crisis.
The burden all of this potential financial manipulation would be borne by Main Street, the very consumers, workers and families still reeling from the housing market fallout.
Rather than continuing to push cap and trade — a policy that one of the nation’s leading economists, Yale University’s William Nordhaus, predicts would lead to “pandemic cheating” — Congress should adopt a simple, transparent and effective approach to addressing climate change.
By implementing a straightforward policy, lawmakers could best serve the interests of citizens, businesses and the environment, while the James Bond fictional excesses stay where they belong — back in Hollywood.
William O’Keefe, CEO of the George C. Marshall Institute, is president of Solutions Consulting Inc.
Oct 29, 2009
I think that this government's policy of cap in trade is horrendous. There needs to be major overhaul to this, not health care!
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Oct 29, 2009
I think this policy is rediculous!
Oct 30, 2009
According to me only the economic and financial condoition of the country will increase the rate of this..
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Oct 30, 2009
Companies act in their own self interest, not the planet's, not the consumers. In the case of the consumer, these companies are advocating legislation that will rip some $2 trillion out of the consumers' pockets, based on latest White House estimates. auto insurance quotes
Oct 31, 2009
Nice article, very helpful. Thanks!---
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Nov 1, 2009
People will always fake and impersonate other famous people. There will always be gossip and rumors but should we force everybody to verify their sources all the time? No cause it's not fun and will create a police state where we have to fake ids just to not be monitored by the govt. or run away from the police state.London Escort Agencies | Escorts London
Nov 1, 2009
Yeah, I am not sure whether or not I entirely agree with that...
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Nov 3, 2009
Feeding garbage parameters into a computer model yields nonsensical results. Creating false problems and giving Congress a mandate to solve them creates nonsense in a similar manner. It is time to note that warming, due to whatever reasons, has certainly given us no reason to be alarmed for 10 years. It has simply stopped dead in its tracks without any help from Congress, despite continued rising CO2 concentrations in the atmosphere.
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Nov 4, 2009
Science and technology may be the only fields preoccupied for what should come out for the benefit of man for the future, (although that sometimes this is not the case). I as an artist, am hoping to preserve the past in the present and in the future, by keeping the world of art alive...by further exploring and developing a mature body of works.
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Nov 4, 2009
Well i think that The complex and cumbersome nature of the trading system makes effective oversight by both voters and regulators a daunting challenge, opening the way to influence by special interests. Media reports show that bureaucrats have allowed a major utility to write a provision for the Waxman-Markey bill, which favored a handful of companies and disadvantaged their competitors. This opportunity for manipulation skews incentives. Instead of encouraging R&D in cleaner electricity, cap and trade gives utilities a strong incentive to invest a lot of money in lobbying efforts.italian soccer
Nov 5, 2009
I was reading this while I watch glee season 1
Nov 5, 2009
Research indicates that implementation of a U.S. emissions market could drive up energy costs for Americans anywhere from $324 to a whopping $3,100 per year. And because low-income families spend a greater percentage of their earnings on energy, this burden would fall heaviest on those least able to afford it.
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Nov 6, 2009
There are on the Internet so many sides nobody needs.
But this side is really interesting.
Many thanks for the share of the information.
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Nov 10, 2009
Keep it up, your writing is always a joy to read that I even told my friends. Simply loving this!
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Nov 10, 2009
The complex and cumbersome nature of the trading system makes effective oversight by both voters and regulators a daunting challenge, opening the way to influence by special interests. Media reports show that bureaucrats have allowed a major utility to write a provision for the Waxman-Markey bill, which favored a handful of companies and disadvantaged their competitors. This opportunity for manipulation skews incentives. Instead of encouraging R&D in cleaner electricity, cap and trade gives utilities a strong incentive to invest a lot of money in lobbying efforts.Jugendherberge Duesseldorf
Nov 11, 2009
Companies act in their own self interest, not the planet's, not the consumers. In the case of the consumer, these companies are advocating legislation that will rip some $2 trillion out of the consumers' pockets, based on latest White House estimates.
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Nov 12, 2009
In my opinion, this is definitely a license to cheat and steal.
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Nov 13, 2009
It would be the mutual effort, on the part of the people and the system to raise their voice against all ods. When the communities and NGO come forward as well..the issue could be sorted out.
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Nov 13, 2009
Yeah it is like allowing somebody to do a crime and then making him buy credits to avoid jail time.
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Nov 13, 2009
These people need to be put in the jail. they are crooks and need to be prosecuted.
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Nov 13, 2009
they are big enemies of humanity
Regards,
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Nov 13, 2009
its bad to hear corruption is prevalent even in america
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Nov 13, 2009
that things are never exposed but necessary agencies should make some efforts to bring them to justice
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Nov 13, 2009
happy to read the post about cap and trade
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Nov 14, 2009
These companies are not doing so because of their fear of global warming. They are doing so because of the profit incentive this proposed legislation offers them. Companies act in their own self interest, not the planet's, not the consumers. In the case of the consumer, these companies are advocating legislation that will rip some $2 trillion out of the consumers' pockets, based on latest White House estimates. That's $2 trillion that consumers won't be able to use to buy these companies services and products, yet these companies are the Cap&Trade cheerleaders.
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Nov 15, 2009
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Nov 15, 2009
thank you for bringing the info to us
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Nov 15, 2009
thanks for sharing the post with us.
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Nov 15, 2009
Great blog, this could be the best blog I ever visited this month. Never stop to write something useful dude!
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Nov 15, 2009
Great blog, this could be the best blog I ever visited this month. Never stop to write something useful dude!
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Nov 15, 2009
i agree with your words which are 100% true
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Nov 15, 2009
first the public should raise voice against this .
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Nov 15, 2009
i wonder what the govt is doing there
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Nov 15, 2009
first people should raise their voice against it
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Nov 15, 2009
that is no come to lime light.
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Nov 16, 2009
until and unless you tell many people dont know about this thing
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Nov 16, 2009
due to this crime ,people are losing a lot
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Nov 16, 2009
crime is increasing day by day in many forms
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Nov 16, 2009
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Nov 16, 2009
I regularly watch james Bond's Movies and how can it be license to cheat and steal ? What about fans ?
Regards
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Nov 16, 2009
Oh, it's unbelievable! Thanks for sharing info.
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Nov 16, 2009
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afraid of crimes etc.
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Nov 17, 2009
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Nov 19, 2009
Great article. Both bills are a giant power grab and redistributive change that will fundamentally transform America. You can endlessly mull over the details of these unconstitutional bills, while you ignore the overall agenda. Confusing us with thousands of pages of rubbish is a great distraction, slight of hand. You are getting what you voted for. Remember this when voting, if elections are not outlawed by 2010 or 2012. Maybe if we bury our heads back in the sand, then things will be better?
Nov 19, 2009
Successful cap and trade programs reward innovation, efficiency, and early action and provide strict environmental accountability without inhibiting economic growth.
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Nov 19, 2009
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Nov 19, 2009
Cap and trade bill is nothing but a license to cheat and steal for the Bilderbergers, create food riots, start up civil war in the U.S, and helps the Rothschild controlled banks that were used during racist, and other wars since the enslavement of Africa to the world wars, to even the cold war.
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Nov 19, 2009
Cap and trade bill is nothing but a license to cheat and steal for the Bilderbergers, create food riots, start up civil war in the U.S, and helps the Rothschild controlled banks that were used during racist, and other wars since the enslavement of Africa to the world wars, to even the cold war.
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Nov 19, 2009
To put the wrench in their plans one should upgrade to solar panels or wind turbines on their homes. But such decision making shouldn't be mandatory !
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