Waxman-Markey's Warming Disaster

Waxman has been modifying his bill and its still a disaster and although this blog among other have focuses on the regressive nature of cap and trade, the bill itself is almost 932 pages of rules and regulations that have no one including the president will bother to read. The logic of cap and trade is that the government will issue permits on the amount you can emit CO2. Go under and you can sell you permits, go over and you can buy. It actually creates a make believe product in the buying and selling of government permission slips. From The Economist:

On May 15th Henry Waxman and Edward Markey, the Democratic point-men on climate change in the House of Representatives, unveiled a bill that would give away 85% of carbon permits for nothing, with only 15% being auctioned. The bill’s supporters say this colossal compromise was necessary to win the support of firms that generate dirty energy or use a lot of it, and to satisfy congressmen from states that mine coal or roll steel.

Giving away permits creates several problems. First, it generates no money, thereby royally messing up Mr Obama’s budget. Second, it means that the permits go not to those who value them most (as in an auction) but to those whom the government favours. Under Waxman-Markey, electricity-distributors would get the largest share, with the rest divided between energy-intensive manufacturers, carmakers, natural-gas distributors, states with renewable-energy programmes and so on. Oil firms, with only 2% of the permits, feel hard done by. But most polluters, having just been promised hundreds of billions of dollars’ worth of permits for nothing, are elated. So it is not just the owners of ski resorts and businesses with negligible carbon footprints that are queuing up to praise the bill. Duke Energy, a power generator with lots of coal-fired plants, is also enthusiastic.

The grand handout to shareholders is meant to last until around 2030, by which time all permits will be auctioned. In the meantime, the bill’s supporters say that consumers will be protected from higher energy prices because the largest chunk of the free permits will go to tightly regulated electricity distributors. Regulators can simply order these firms to keep prices low. Problem solved.

Business that support this bill better look out, they are putting themselves in the noose, yeah its supposed to be free, but the plan is clearly to get a permits in place and then use them to control or destroy industries at the whim of the Democratic party. Of course it probably won't save energy anyway. Additionally it does nothing about China and India, something supporters of the Bill argue tend to ignore, When they do acknowledge these countries, the left and the Democrats argue we need to "lead the way" to get them on board. Clearly delusion is part of the "reality based community".

Another problem with Waxman-Markey is its complexity. At 932 pages, it is half as long again as an already-bloated previous draught. It includes a dizzying array of handouts, mandates and technical standards for everything from hot-food-holding cabinets to portable spas. It allows for a huge increase in “offsets”—where a polluter pays someone else to stop polluting instead of curbing his own emissions. These are open to abuse, as Europe’s experience shows. There is little to stop foreign factories from starting to pollute just so that someone will pay them to stop.

Because hot trays clearly are destroying the planet. As for offsets, could you even fathom the stupidity of it?