The Threat of a Cap-and-Trade Swindle

Turning carbon into cold cash

From National Post

The closer the United States gets to adopting a cap-and-trade system to control greenhouse gas emissions, the more frightening it gets.

Not because the plan now under debate in the U. S. Congress would complicate the lives of energy producers, or impose new costs on consumers. Those drawbacks might be bearable if the system was truly designed to reduce emissions, and if the expense was reasonable. The alarm results from increasing evidence that emissions have become a secondary concern of a plan whose main purpose is to serve the partisan interests of the Democratic Party.

Jim Prentice, Canada’s Minister of the Environment, visited Washington this week to warn in no uncertain terms that the proposal before Congress would be a “prescription for disaster” for U. S. trade relations.

He was referring to “border tax adjustments” included in the U. S. bill, which would impose charges on goods imported from countries that do not match U. S. efforts to reduce emissions.

The charges are ostensibly intended to force countries like China and India to adopt similar emission-fighting measures. In reality, argued Mr. Prentice, they would act as “trade protectionism in the name of environmental protection,” allowing the United States to force up the price of imports to the benefit of American competitors. Mr. Prentice said Ottawa fully intends to match whatever greenhouse legislation the United States puts in place, but that might not avert the danger. It would still be up to Washington to decide whether it deemed Canadian protections adequate.

If Washington continues along the path toward discrimination, Mr. Prentice warned, Ottawa will take appropriate action — a clear hint at retaliation. A trade war would benefit no one, but would nonetheless likely be popular among labour unions, a traditional base of support for Democrats.

The U. S. plan would similarly boost Democrat fortunes by providing a multi-billion-dollar windfall to power producers largely clustered in states loyal to the party. As outlined by National Post columnist David Frum this week, the bill would include a system in which carbon emitters could buy the right to continue emitting by purchasing credits from cleaner companies. This is a key feature of cap-and-trade plans, but Democrats have stacked the deck by proposing to award allotments of emission credits, free of charge, to “clean” firms, which could then earn billions by selling them to big emitters.

Read the rest of this article at National Post.