Job-killing carbon deal benefits big businesses

Democrats based much of their 2010 midterm congressional election campaign on the risible claim that Republican candidates wanted to “outsource jobs.” Set aside the fact that this claim was as ineffective as it was ludicrous. More importantly, President Barack Obama’s carbon-control scheme, which begins next week, provides conclusive evidence that it was the Democrats who planned to do the outsourcing.

Carbon-limitation laws will send American manufacturing jobs overseas. Carbon emissions, unlike pollutants regulated under the Clean Air Act, can only be reduced significantly through reductions in output, which means the loss of jobs or price increases, or both. With new regulations taking effect during the next two years, energy-intensive industries will begin weighing the costs and benefits of relocating manufacturing operations to countries — think China and India — whose governments do not significantly regulate carbon emissions.

This is the last idea we should be raising in corporate boardrooms at a time of 9.8 percent unemployment, but it is apparently a higher priority for Obama than preserving American jobs.

Last week, Reuters reported that Obama has secured limited industry cooperation to propose his new regulations. He can be counted on to use whatever cooperation as a public relations tool to blunt criticism, just as he did in the health care debate. For although industry resists to a point, it has ways of dealing with the increased costs — sometimes even profiting from them — that are inaccessible to most Americans.

For example, AES Corp., an energy company that lobbies for carbon regulation to protect its domestic investments in green energy, simultaneously builds new coal- and diesel-fired power plants in Chile, Vietnam and India. Alcoa, the aluminum maker, lobbies for costly green policies here to boost the use of its light metal, but lobbies against them in Australia, where it actually makes aluminum.

Expect such corporate schemes to become even more common once the U.S. Environmental Protection Agency caps carbon emissions. We fully expect that politically clever operators with sufficient resources will ultimately be compensated for increased regulation by collecting green subsidies at this end of the world while spewing more carbon at the other.

And as with Obama’s health care reform, American taxpayers and consumers will pay for the result through higher prices and the further weakening of American workers’ competitiveness.

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