Wednesday, July 01, 2009

Cap n Trade? It's Gonna Cost Ya Big Time

If you believe anything the US government has told you about the costs of Obama / Pelosi's grand carbon capping scheme, you really should be reading something else other than this blog. Anyone as gullible as that should be reading Salon or Huff n Puff, or one of the Green Party publications.

Robert Zubrin, promoter of outer space development and clean energy, has a few thoughts on the topic:
The United States emits about 9 billion tons of CO2 per year. Therefore, at a rate of $15/ton fee for emission indulgences, the bill would impose a tax of $135 billion per year on the nation. Divided by the U.S. population of 300 million, that works out to a cost of $450 per year levied on every American man, woman or child, or $1,800 for a family of four. While for wealthy individuals like Al Gore such an impost might represent a mere pittance, for working families struggling hard to make ends meet it would be a very significant burden.

But that is not even the worst part of it. As a result of the markup of carbon costs, a lot of those working families will be out of work and unable to pay their existing bills, let alone new ones. Consider: Burning one ton of coal produces about three tons of CO2. So a tax of $15 per ton of CO2 emitted is equivalent to a tax of $45/ton on coal. The price of Eastern anthracite coal runs in the neighborhood of $45/ton, so under the proposed system, such coal would be taxed at a rate of about 100 percent. The price of Western bituminous coal is currently about $12/ton. This coal would therefore be taxed at a rate of almost 400 percent. Coal provides half of America’s electricity, so such extraordinary imposts could easily double the electric bills paid by consumers and businesses across half the nation. In addition, many businesses, such as the metals and chemical industries, use a great deal of coal directly. By doubling or potentially even quadrupling the cost of their most basic feedstock, the cap-and-trade system’s indulgence fees could make many such businesses uncompetitive and ultimately throw millions of working men and women onto the unemployment lines.

A gallon of petroleum-derived liquid fuel produces about 20 pounds, or 1 percent of a ton, of CO2 when burned. But it takes about 1.5 gallons of oil to produce one gallon of refined liquid fuel. So a $15/ton tax on CO2 emissions will also cause an increase in the price of gasoline, diesel and jet fuel on the order of $0.22/gallon. This will not only hit consumers’ pockets, but increase transport costs throughout the economy, thereby disabling businesses and increasing unemployment levels still more. While harming the economy, such a gas tax will do nothing material toward the truly essential goal of decreasing America’s dependence on foreign oil. Indeed, the bill’s dramatic hikes in electricity costs will have the opposite effect, since only 3 percent of America’s electricity is derived from oil, and by forcefully increasing electric power costs, the bill will actually discourage adoption of electric means of transport, including mass-transit systems today and potentially plug-in hybrid cars in the future. America’s dependence on foreign oil could be substantially relieved by legislation requiring that new cars sold in the United States be flex-fueled and thus able to run equally well on alcohol fuels derived from a multitude of nonpetroleum sources, but the bill’s provisions in this area are so weak as to be worthless.

But all these bad aspects of the Waxman-Markey bill pale before its potential impact on the world’s food supply. America’s agricultural sector is one of the greatest success stories in human history. In 1930, hunger still stalked the entire globe. Not just in Africa, India and China, but even in Europe and America, the struggle to simply get enough food to live on still preoccupied billions of people. Since 1930, the world population has tripled. But instead of going hungrier, people nearly everywhere are now eating much better. This miracle is the work of American farmers, who have not only produced huge surpluses to feed the world, but used the income gained from such good work to pioneer ever more advanced techniques that have enabled farmers everywhere to grow more. This progress is still continuing. In 2007, Iowa alone produced more corn than the entire United States did in 1947, and the 300,000 American corn growers as a whole produced 784 billion pounds of corn, an amount sufficient to supply 130 pounds of corn per year to every person on the planet. But this miracle depends upon the availability of cheap fertilizer and pesticides, which in turn require carbon-based process energy to produce. If you tax carbon, you tax fertilizer and pesticides. If you tax these things, you tax food, and by no small amount. A $15/ton CO2 tax would increase fertilizer production costs directly by about $60/ton, with the cap-and-trade bill’s increased transport costs inflating the burden still more. That’s enough to make many farmers use less fertilizer, and less fertilizer means less food.

To get a sense of what it would mean for farmers to abandon fertilizer, it is only necessary to go to the supermarket and compare the price of the “organic” produce, grown without chemical fertilizer, to the regular produce, which, while just as nutritious, typically costs less than half as much. It is one thing for wealthy organic food buffs to voluntarily pay such high prices for their food — that is their right. But to impose such costs for basic groceries on everyone else, and particularly the poor, as part of a largely symbolic effort to try to change the weather, is self-indulgent in the extreme. _RollCall
Zubrin is being kind to Obama, the Congress, and the EPA. If he were honest, he would advocate for throwing the bums into a dungeon until Oynklent Green [OTC:OYNK] has time to sort them out. The US must have access to coal, shale oil, oil sands, shale gas, offshore oils, methane clathrates, and every other fossil fuel it can get to bridge the next few decades.

The big joke: China, India, and the other emerging countries whose CO2 output is beginning to dwarf that of the developed word, are in control of human CO2 generation now. Fiddling with the US output -- and devastating the US economy in the process -- is something that a person dedicated to symbolic gestures would do.

We are in for a lot of unnecessary hardship, thanks to our naked emperor and his free-spending, delusional court. Because if the US economy goes down, not one other country or any group of countries is ready to carry the weight that the US has been carrying economically, militarily, scientifically, or in virtually any other way.

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Blogger Ronduck said...

1. Anyone as gullible as that should be of the Green Party publications.

You mean like the New York Times?

2. Obama isn't interested in symbolic gestures, I think he is interested in destroying the US.

3. A lot of commentators online have been comparing the current US decline to the decline of Britain in the twentieth century. Watching our national parent enter its current stage of decay is frightening to say the least.

4. Al-fin, you have stated on this blog that you are an atheist. I know that you may not sympathize with religion, but I want you to consider that different religions and denominations in the US vote differently, and thus affect the direction of the United States.

Please look at the upper half of my first blog post to see what I am referring to. In my post you will see a collection of polls taken from before the election showing how each religious group in America has voted. How each group votes is probably pretty stable over time, so the percent each religious group makes up of the electorate dictates the direction of society.

Maybe I've posted this here before. If so please forgive me.

4:00 PM  
Blogger jennifer said...

I recently came accross your blog and have been reading along. I thought I would leave my first comment. I dont know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.


6:21 AM  

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