Waxman Modifies Carbon Trading

Cap and Trade is a regressive tax on All Americans that Obama wanted to foist on all of us. The resistance to the measure was so great that of all the plans by the Democrats, only card check matched it it unpopularity. Now Waxmen, desperate to get something passed wants to establish cap and trade, but with free credits. It works like this, the government hands out a series of "permits" to companies explaining how many emissions they are allowed. They pay for these permits and the costs in time are rolled down to the consumer. By making energy more expensive it will force Americans to behave better with consumption, companies to find other ways of producing energy, and "clean" energy will have a stronger chance in the market place. Now Waxmen would have it that some permits would be given for free, but some would have to be paid for with the government deciding. Now take a step back and think about the amount of influence peddling that is going to create, but that is another story.

May 7 (Bloomberg) -- U.S. Representative Henry Waxman, sponsor of a plan to cut greenhouse-gas emissions, is offering power producers and companies such as steelmakers free pollution permits, said people familiar with negotiations.

Waxman, the Democratic chairman of the House Energy and Commerce Committee, made the proposal in an effort to win approval in his panel for legislation to establish a carbon- trading system, said the people, who declined to be identified discussing the private talks. The free permits may be worth as much as $40 billion a year according to Mike McKenna, president of MWR Strategies, a policy consulting firm based in Washington.

Waxman’s offer marks a break from President Barack Obama’s original proposal to auction off all permits to pay for a middle-class tax cut. Businesses and some lawmakers of both parties opposed the president’s approach.

“Polluters should have to pay for the privilege of dumping their stuff into the atmosphere,” Frank O’Donnell, president of Clean Air Watch, a Washington environmental group, said in an interview. “The problem is purely a political one as they try to round up votes in the House Energy and Commerce Committee.”

The cap-and-trade legislation proposed by Waxman would require companies to obtain a permit for every ton of carbon dioxide they pump into the atmosphere. In 2012 when the program begins, 4.7 billion permits would be issued, after which they could be traded on a market.

Needless to day if they are free it defeats the purpose of the plan, unless the plan is to get something in place that could later be used to control and shakedown business. Now you may be wondering about the trading aspect. Lets say I have some permits left, I can then sell them to other companies who in turn can ramp up their energy production. If you haven't figured it out yet, yes the government is creating a market where the only thing being traded is government permission slips. Good lord can you imagine the disaster this could be! Waxmen, whose connections to CDR financial products, another company that created non-existent financial products, is the ultimate left wing politician. Government exists to empower him, and his associates, end of story. Of course Europe has tried this, but with major damage to their countries and I am sure that won't slow him down.