Cap-and-Trade=Higher Prices...For Everything

All three Presidential candidates support a cap-and-trade program for CO2 emissions. The thought behind this concept is that it will reduce the amount of CO2 that all industries emit. A cap-and-trade system basically says the government will grant companies a permit to issue X amount of CO2. If the industry emits less than X, they can sell their remaining permit volume to others that may actually have more than X emissions. This sound really good in theory. But as anything the government touches these days, there are unseen consequences.

For oil refiners, the Government is only giving them 2% of all cap-and-trade CO2 allowances. That alone does not cover what they emit today. To make it even worse, the oil companies will be responsible for all tail pipe emissions, not just the ones from their refineries. That puts them well over their limits. So who will be buying those surplus permits? The oil companies for certain. Who will ultimately pay the price for those permits. The consumer for certain.

So who really stands to benefit from this cap-and-trade program. It was not obvious to me until I was listening to a radio ad sponsored by the Kansas Farm Bureau yesterday. In this ad, the KFB was supporting the cap-and-trade system because it turns out farmers will be able to generate credits by growing CO2 friendly crops or by turning their land into wind farms. It is the farmer who will be selling refiners extra cap-and-trade credits.

The new proposal is nothing more than a tax on industry (and thus a tax on consumers). It will ultimately make not only gasoline more expensive, but also anything that requires transportation or that emits CO2 in the manufacturing process. Therefore, the unseen consequence will be higher prices, even more money in the pockets of farmers via the government, and a lower standard of living for all (well all non-farm) Americans. Write your representatives and tell them to keep looking for a better way to take action on "climate change."