The Environmental Spectator

Cap and Pollute

The sober green case against cap and trade.

By 7.2.09

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The House passage of the American Clean Energy and Security Act Friday was billed as a narrow victory for President Obama and the green lobby. But was it a victory for real environmentalism?

Sadly, no. The legislation's many loopholes that had to be added to secure its passage will make it far less effective -- to be charitable. The "cap and trade" regime that the bill would create promises to ratchet down carbon emissions over time but creates a dangerous precedent for the environment.

Cap and trade essentially creates a property right out of polluting. Once Company A has an emissions permit, it can release a certain amount of carbon dioxide into the atmosphere. Or it can sell its permit rights to Company Z.

The bright idea is to create an incentive to decrease carbon emissions so that a company can profit off its excessive permits. In reality, what it does is create an enforceable right to pollute.

In the past, pollution was seen as a sort of "necessary evil" that could be regulated or rescinded if necessary. Now companies will have a right to pollute because they were already in the polluting business and were grandfathered in, or because they paid good money for that right.

Cap and trade guarantees the right to pollute over a certain, fixed amount of time. The bill ratchets down the amount of carbon emissions allowed over time by a schedule. That sounds like a win for environmentalism. However, the percentages and dates create expectations that go along with these permits being sold.

Companies will purchase permits from each other with the expectation that they will be able to emit a specific amount of carbon over a specific time period. These percentages and dates are political goals and are not based on solid scientific research.

That could lead to unexpectedly bad results. For example, the amount of carbon emissions allowed could turn out to be incredibly dangerous to the public. Under a cap and trade regime, if the government attempts to "fix" the problem the action would amount to a "taking." Lawyers would then tie it up in court for years.

And the "cap" part of cap and trade is hardly set in stone. The bill allows companies to offset their carbon emissions beyond their permitted use by "helping the environment" in some other politically favored way.

For example, if a company pays to preserve an acre of rain forest, it secures the right to release more carbon emissions. That might superficially seem to maintain the balance between carbon producers and carbon reducers, but that balance is a convenient myth.

Forget for a moment that the generous offsets allowed by the bill were crafted in response to industry prodding. There is no hard evidence that carbon offsets actually work.

And, remember, the environment is far bigger than the United States. Companies can often go elsewhere. Congress has to take into consideration that pushing companies out of the United States into other, less regulated areas, would have the opposite effect of the bill's intention.

Politicians need to realize there is a difference between doing "something" to help combat global warming and doing "anything" on that front.

It's unwise to ram a 1,500-page bill through the House in the dead of the night -- with a last minute 300-page amendment tacked on to buy needed votes -- and expect that to work.

All it amounts to now is a "feel good" bill with no realistic environmental benefits at a huge cost to individuals. 

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About the Author

Jeanne Marie Hoffman is a writer in Alexandria.