Monday, December 22, 2008

Cap and Trade

Today it is time to talk about cap and trade. I am sure now that it is going to be imposed as a priority program in the USA and very likely in both India and China. It can become the first international revenue/expenditure model in place that will help create common cause on a global scale.

It took the fear of global warming (wrong reason) to make this program possible. By monetizing the disposal of CO2, it becomes profitable to solve the problem. This means that it creates demand for solutions that is driven by something other than altruism. I have thought for years that any and all waste disposal problems were best monetized just like this so that the invisible hand of the market can do its magic. Otherwise that invisible hand is quite happy to send it downstream unto its neigbours.

We have reached an historical pass in which even the statist gimme crowd supports such an idea, although they would never admit that they are calling on Adam Smith. It is actually the right thing to do and it needs to be fully internationalized, while grandfathering and scheduling out the advantage players, including India and China.

I find it offensive that we have torn down obsolete super polluters and shipped them off to China. These are now twenty years older and long paid for and surely ready for disposal. Much better technologies are now available and need to be encouraged by fast write offs and loan support.

A really good start in the USA since the cash value of a ton of carbon may be about $40.00 would be to convert all agricultural subsidies into carbon credits upon the farm sequestering the appropriate ton of carbon in the farm’s soils. If Europe did the same, we will have killed two birds with one stone. The farmers will actually earn their subsidies. The subsidies will no longer be paid by the tax payer but by the carbon polluters. With any luck that will jump start the terra preta soil revolution in the USA.

It will also establish a new global agricultural regime that will be more easily directed into extending these same systems everywhere else. I would love to subsidize new terra preta soils in the Phillipines at the rate of $40 per acre per year per ton of carbon while converting tropical soils into lush croplands forever. That would swiftly put millions to work establishing family farms like the family farms that existed in the Amazon for thousands of years. And modern mechanization allows these operations to be economically sized and operated.

This will also swiftly end slash and burn agriculture.

I know that this can be done right. My misgivings come from the unlimited capacity of the stupid and ignorant to divert programs like this into their own dreams of self aggrandizement, making it all messy for everyone else.

We only need to look at the ease which the mortgage industry bought off Congress to prolong their death spiral to know how possible this is. Can we keep them honest or do we have to walk through a history of swindles before it is done right? I am not too trusting these days.

Roosevelt and his brain trust did get a lot of things right back in the thirties. That is why I was so disturbed when Congress merrily took of the governors as a late action of the Clinton administration. To be followed by a smuck whose grasp of economic history was modest and clearly prone to been hoodwinked by folks he thought were on his side.

Obama and his brain trust have an opportunity to get this right, principally because the folks in office on both sides of the house have a lot to account for. But he better be prepared for an arm wrestle. Clinton ran into an unchastened house that was unprepared to give up anything and this immediately emasculated him for the entirety of his mandate.

So far Obama’s cabinet choices are fairly conservative and certainly careful. And he already knows what is top of the agenda as the auto industry has been given a stay of execution for three months to sort things out.

By the way, a subsistence farmer can be expected, using terra preta, to sequester one ton per year of carbon while upgrading one acre of soil per year. Therefore, removing 100,000,000 tons of carbon per year requires 100,000,000 families to be paid $40 for a total of $4 billion dollars. Maybe we can get Mohammed Younis to administer the program rather than the UN.

Connecting the Carbon Dots

By Nick Hodge Friday, December 19th, 2008
Pee-Wee Herman used to sing, "Connect the dots... laa la laa la laa," as he leapt into the magic screen.

No, I haven't been hanging out with Pee-Wee in movie theaters. But his advice on connecting the dots is applicable in the context of financial and political realms... and the trends and investment ideas that emerge.

Since the election in November, a series of dots have been emerging that indicate it's time to take a serious look at recently-established carbon ETFs and ETNs.

Connecting the Carbon Dots

In naming his climate change and energy team last week, Mr. Obama nominated Lisa Jackson to head the Environmental Protection Agency.

In her previous position, Jackson led the New Jersey Department of Environmental Protection, where she is credited with helping put New Jersey in a leadership role on the issue of climate change and with encouraging the state to adopt a moratorium on building new coal plants.

She also championed the reduction of emissions. And, in 2007, New Jersey became the third state, behind California and Hawaii, to pass a law that mandates steep emissions cuts over the next four decades.

New Jersey, under Jackson's direction, also helped establish the Regional Greenhouse Gas Initiative (RGGI), the first mandatory, market-based CO2 emissions reduction program in the United States.

A "market-based" program means it is possible to profit from reducing emissions.

And I suspect, under her leadership, the EPA will push through a similar measure that covers the entire country. You may know it as a cap-and-trade system.

Her new boss is certainly on board. The 'agenda' section of his website has the following three things to say about changing our carbon habits:

· Reduce our Greenhouse Gas Emissions 80 Percent by 2050

· Implement an economy-wide cap-and-trade program to reduce greenhouse gas emissions 80 percent by 2050

· Make the U.S. a Leader on Climate Change.

Obama has already said he'll consider asking the EPA to regulate emissions under the Clean Air Act, which is something they should've been doing already, but Bush declined to do so after saying that such a plan would turn the EPA into the "de facto regulator of the economy."

In response, Jackson sent a forceful letter to the EPA saying that "the past eight years have demonstrated a shocking, yet consistent, irresponsibility on the part of the federal government to engage in any meaningful way... in implementing sustainable solutions to reduce emissions."

I think the policies she intends to carry out in her new position are clear.

Here we have an attack rant against cap and trade. He is right of course, if no carbon ever gets sequestered, and he is not about to investigate the possibilities. The object is to monetize the carbon waste stream. My object is to use that to monetize the two billion or so subsistence farmers so that their enterprise is recognized as capital.

The Cap And Trade Fraud - Global Warming Scams

by Jack Ward

The big buzz in the political world is 'cap and trade'. What is cap and trade and where did this idea come from?

The cap and trade concept came from the UN's Kyoto Protocols. Cap and trade is based on the flawed premise that anthropogenic activities (humans) are causing global warming by increasing
carbon dioxide (CO2) in the atmosphere. The American Physical Society (APS), which represents nearly 50,000 physicists, has reversed its previous position on climate change. APS editor, Jeffrey Marque said, "There is a considerable presence within the scientific community of people who do not agree with the ICCP (Intergovernmental Panel on Climate Change) conclusion that anthropogenic CO2 emissions are very probably likely to be primarily responsible for global warming that has occurred since the Industrial Revolution." The UN IPCC computer modeling contains numerous exaggerations and extensive errors which led to the global warming hoax.

Virtually all human activities (work and play) results in the release of CO2. A cap and trade scheme would limit the release of CO2 that countries, corporations, and individuals could emit. Those that exceed this arbitrary carbon cap would be required to buy or trade a carbon
credit from a country, corporation or individual that did not exceed the arbitrary cap. A carbon credit is a permit that allows a country, corporation, or an individual to emit a specified amount of carbon dioxide. These credits are bought and sold on carbon trading markets just like stocks. Contrary to stocks that have an actual value, the value of carbon credits is artificially created by governments for the sole purpose of generation income from a commodity that has no actual value. In a free market economy no one in their right mind would pay good money for a commodity that has no value without government coercion.

The buying, selling, and
trading carbon credits will not remove one molecule of CO2 from the atmosphere. But, the purpose is not to eliminate CO2, it is to generate income for the government, redistribute wealth, and control the people. Yet Obama said, "Under my plan of a cap and trade system, electricity rates would necessarily skyrocket. Even regardless of what I say about whether coal is good or bad. Because I'm capping greenhouse gases, coal power plants, you know, natural gas, you name it — whatever the plants were, whatever the industry was, uh, they would have to retrofit their operations. That will cost money. They will pass that money on to consumers."

According to the Congressional Budget Office this new energy tax will cost businesses and individuals trillions of dollars. In addition, legislative analysts have predicted that millions of jobs will be lost if legislation implementing the cap and trade proposal is passed. Once these schemes are allowed, the government will be able to regulate and control all carbon emissions. This will give the government complete control over travel, lifestyle and what ever businesses and citizens consume and produce. This is the change Obama desires.

Cap and trade advocates chose the Hegelian Dialectic to sell this draconian plan. Georg Hegel's theory of the dialectic was used by Karl Marx and Frederick Engels to sell their economic theory of
Communism. The Hegelian Dialectic is used to guide thoughts and actions that lead to a predetermined solution. Here is how it's done:

* First, create a problem of monumental proportions.

* Second, stir up hysteria by every means possible.

* Third, when people hysterically demand a solution to the contrived problem, offer predetermined solutions that will take away rights, cost considerable money, and put more power in the hands of the power-grabbing bureaucrats.

Global warming zealots are using the Hegelian Dialectic to push their environmental agenda to the detriment of the American people. People are being brainwashed into believing the planet is being threatened by global warming. Speaker of the House, Nancy Pelosi, even claims that she was elected to 'save the planet'. Al Gore, the self appointed high priest of global warming, lectures everyone to reduce their energy consumption. But don't be fooled. Neither Peolsi nor Gore walks the walk. Both are multi-millionaires that live in energy gobbling mansions.

These elitist Liberals want to re-create a serf / royalty society, with them representing the royalty class. You will know when this global warming hype is for real when Gore, Pelosi, and their ilk give up the amenities of the 'rich and famous' and live in 1600 sq. ft. houses, fly coach, and use mass transit. Until then, their hot air is the cause of global warming. Every aspect of your life will be adversely affected if our politicians are allowed to implement any of these fraudulent cap and trade schemes.

Jack Ward is an independent columnist

1 comment:

Tarun Kumar said...

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