Will Cap & Trade Destroy Alternative Energy?

Organized Exploitation ^ | 07-01-2009 | Paul Kroenke

[aic4ever]

A very interesting editorial by Steve Margolis at Newmark's Door (HT: TAE) discusses the economics of cap and trade, and outlines how it will bring about the largest transitional gains trap we've ever seen. Among many brilliant points about the economics of cap and trade, Margolis discusses the paradox that the economics of the bill will create for itself, that being that by creating a new market for the trading of carbon, the bill effectively destroys incentive to build the renewable resources it superficially calls to be created:

[KarlInOhio]

I don't know about that, but the cap and tax bill does the opposite of getting to energy independence. Crude oil drilled here or imported has to be refined into gasoline. That takes energy which is generally produced from the oil itself, which releases CO2. That will be taxed. This gives an incentive to just import refined gasoline instead of drilling here or importing crude oil. That will make us even more dependent on foreign energy sources.

[ANGGAPO]

Please don't worry about that small detail, because your new TAX bill, based on Cap and Trade, will preclude any money left over for gasoline.

[Howie]

[Zeppelin]

I don't know about that, but the cap and tax bill does the opposite of getting to energy independence. Crude oil drilled here or imported has to be refined into gasoline. That takes energy which is generally produced from the oil itself, which releases CO2. That will be taxed. This gives an incentive to just import refined gasoline instead of drilling here or importing crude oil. That will make us even more dependent on foreign energy sources.

But wasn't there a clause in the (unread) bill about tariffs on goods from countries that do not have similar carbon cap regulations?

I believe that's what Obama warned Congress against yesterday.

So...he wants US companies / citizens to pay for carbon emissions, while giving other carbon emitters an economic advantage?

Yeah, he's not anti-America at all...