Thursday, February 26, 2009

What cap and trade will cost you

The following is a rerun of a post I made a few months back addressing the cost of Hussein's announced plans. Since it is coming to pass, I thought you might enjoy chewing on it again.



Hussein's promise to bankrupt the coal companies may have grabbed a few people's attention. This is how it will be done.

I wrote the following on the subject back on June 1.

How much will the Senate's Global Warming bill cost us?

Well, we don't know. But we do know that the law will be structured around the cost of carbon dioxide emitted. So the question becomes, how do we measure it? (A better sentence would have been... how do we determine the amount of carbon per source?)

Here is how.

Now, if you have read the link, you know that burning a gallon of gasoline produces 20 pounds of carbon.

So, what's the cost?

In Europe, where permits to emit carbon have been trading since 2005, it now costs nearly $40 to emit a ton of carbon.

Now, if your car is tagged as a 20MPG car, if you drive it 1000 miles, you will have used 50 gallons.... that's 1000 pounds of carbon... or a half of a ton.. or $20. or 2cents a mile... or if you drive 30,000 miles a year that's $600.00 or $50.00 per month. Have two cars? $100 a month.. Of course the Demos will want a special "second car permit." Cost unknown.

For absolutely no reason other than the desire of the Environmental Wackos to run the world.

And carbon comes from many places, including when you breath, how much you breath and how fast....

Wanna have sex with your significant other?? Sorry. You have exceeded your carbon production allowance... And no cheating! And yes... in spite of what Clinton said, a BJ is having sex...

And, of course, that is gasoline. Coal is different, and will vary based on type of coal, but as an example:

Complete combustion of 1 short ton (2,000 pounds) of this coal will generate about 5,720 pounds (2.86 short tons) of carbon dioxide.

So for every ton that your utility burns to produce electricity, they will have to pay $114.40 or not produce electricity.

Can you see your electric bill costing $500 a month???


Link

Of course the next question is, who gets the money?

If I understand "cap and trade," what your utility will do is find someone who isn't emitting carbon and buy "their right to omit X amount of carbon."

A central authority (usually a government or international body) sets a limit or cap on the amount of a pollutant that can be emitted. Companies or other groups are issued emission permits and are required to hold an equivalent number of allowances (or credits) which represent the right to emit a specific amount. The total amount of allowances and credits cannot exceed the cap, limiting total emissions to that level. Companies that need to increase their emission allowance must buy credits from those who pollute less. The transfer of allowances is referred to as a trade. In effect, the buyer is paying a charge for polluting, while the seller is being rewarded for having reduced emissions by more than was needed. Thus, in theory, those that can easily reduce emissions most cheaply will do so, achieving the pollution reduction at the lowest possible cost to society.[


Link

Let's break it on down.

The cap: Each large-scale emitter, or company, will have a limit on the amount of greenhouse gas that it can emit. The firm must have an “emissions permit” for every ton of carbon dioxide it releases into the atmosphere.


First there is no reason to believe the "large-scale emitter" description. Government is always eager to grasp more power and more money, so expect to see this all the way down to your local Pancake House and Joe The Plumber's shop. And to your automobiles, lawn mowers, boats, etc., etc.

The next question is, how do you measure the emissions? I am sure there are ways, but they are expensive to do on... say a Delta Faucet or Whirlpool factory. So up front there is a huge cost that the consumer will have to pay, or.... gasp.... the factories will simply be moved to China and India and other countries that have told us to stick our man made global warming hoax in our ear.

And then we have the issue of setting the limits. Since politics are involved, the limits will reflect politics and political correctness. A chicken farm producing "free range" chickens might get X while a conventional chicken farm would get X plus 50... all in the name of good health and encouraging our practice of same....

Vehicles would be the easiest thing in the world. When you register and get your tags the miles driven is recorded and subtracted from the previous number. The answer is then divided by the manufactures "average" number, said number being approved by the government, to get the gallons of fuel, multiplied as shown above for the carbon and then taxed at whatever the current amount is.

How about an additional $2000.00, or so, to register your car???

The above is going to happen. You can write it down.

The trade: It will be relatively cheaper or easier for some companies to reduce their emissions below their required limit than others. These more efficient companies, who emit less than their allowance, can sell their extra permits to companies that are not able to make reductions as easily. This creates a system that guarantees a set level of overall reductions, while rewarding the most efficient companies and ensuring that the cap can be met at the lowest possible cost to the economy.


This almost makes sense if you were within the same industries, and if they did the same things the same way using the same equipment. But they don't.

Jet Blue, for example, goes coast to coast non-stop. They use less fuel than United who, on some flights, will fly NY to Chcago to LAX. But wait! Jet Blue is flying older (example only)aircraft than United so United is using less fuel. But wait! Jet Blue is carrying more passengers, so they are using less fuel per passenger mile. But wait! That is only true during the holiday season, United is better on non holiday....

The above makes my head explode, but it is absolutely perfect for bureaucrats.

And worse, it will stop plant expansion because no company, especially manufacturing companies, will be able to know their costs before the program is implemented. Since anything like this will take two or three years, all expansion will be overseas in countries that have told us to stick our man made global warming hoax in our ear.... but I repeat myself.

What it does is take money from politically unpopular industries/companies and send it to politically favored companies. Now do you understand why T. Boone Pickens, and his major stock holder Democratic Speaker of the House and Saver of the World and Polar Bears, Nancy Pelosi favor this?? T. Boone and Nancy P are selling wind and natural gas, both lessor carbon producers than coal.

Now, do you understand why the Democrats, including The Chosen One, have had to be forced into muttering, "I favor clean coal technologies, too."

Now we come to the money.

The profits: If the federal government auctions the emissions permits to the companies required to reduce their emissions, it would create a large and dependable revenue stream......

Initial estimates by the Congressional Budget Office project that an economy-wide cap-and-trade program would generate at least $50 billion per year, but could reach up to $300 billion. Approximately 10 percent of this revenue should be allocated to help offset costs to businesses and shareholders of affected industries. Of the remaining revenue, approximately half should be devoted to help offset any energy price increases for low- and middle-income Americans that may occur as a result of the transition to more efficient energy sources. The other half of the remaining revenue should be used to invest in renewable energy, efficiency, low-carbon transportation technologies, green-collar job training, and the transition to a low-carbon economy.....


Read the above and let it soak in for a minute.... $300 billion dollars a year is $1000 a year per person in the US. And that does include the revenues from personal licenses to drive a car.

So if you voted for Hussein today, congratulations. You have just participated in the destruction of the US economy and the world's longest existing democracy.

Be proud.

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