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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Cogito who wrote (105161)	2/28/2009 3:40:26 PM
From: quehubo	Read Replies (1) \| Respond to of 542836

Fortunately the nation has California which volunteers for most every self destructive experiment. Just hope we can avoid repeating the same mistakes at the national level. California's 'Green Jobs' Experiment Isn't Going Well By STEPHEN MOORE Los Angeles Gov. Arnold Schwarzenegger was all smiles in 2006 when he signed into law the toughest anti-global-warming regulations of any state. Mr. Schwarzenegger and his green supporters boasted that the regulations would steer California into a prosperous era of green jobs, renewable energy, and technological leadership. Instead, since 2007 -- in anticipation of the new mandates -- California has led the nation in job losses. The regulations created a cap-and-trade system, similar to proposed federal global-warming measures, by limiting the CO2 that utilities, trucking companies and other businesses can emit, and imposed steep new taxes on companies that exceed the caps. Since energy is an input in everything that's produced, this will raise the cost of production inside California's borders. Now, as the Golden State prepares to implement this regulatory scheme, employers are howling. It's become clear to nearly everyone that the plan's backers have underestimated its negative impact and exaggerated the benefits. "We've been sold a false bill of goods," is how Republican Assemblyman Roger Niello, who has been the GOP's point man on environmental issues in the legislature, put it to me. The environmental plan was built on the notion that imposing some $23 billion of new taxes and fees on households (through higher electricity bills) and employers will cost the economy nothing, while also reducing greenhouse gases. Almost no one believes that anymore except for the five members of the California Air Resources Board (CARB). This is the state's air-quality regulator, which voted unanimously in December to stick with the cap-and-trade system despite the recession. CARB justified its go-ahead by issuing what almost all experts agree is a rigged study on the economic impact of the cap-and-trade system. The study concludes that the plan "will not only significantly reduce California's greenhouse gas emissions, but will also have a net positive effect on California's economic growth through 2020." This finding elicited a chorus of hallelujahs from environmental groups. The state finally discovered a do-good policy that pays for itself. Californians can still scurry around in their cars, heat up their Jacuzzis, and help save the planet. But there was a problem. The CARB had commissioned five economists from around the country to critique this study. They panned it. Harvard's Robert Stavins, chairman of the federal Environmental Protection Agency's economic advisory committee under Bill Clinton, told me that "None of us knew who the other reviewers were, but we all came up with almost the same conclusion. The report was severely flawed and systematically underestimated costs." Another reviewer, UCLA Prof. Matthew E. Kahn, a supporter of the new regulations, criticized the "free lunch" aspect of the report. "The net dollar costs of each of these regulations is likely to be much larger than is reported," he concluded. Mr. Stavins points out that if these regulations are a net boon for businesses and the economy, "why would you need to impose regulations like cap and trade?" The Sacramento Bee, which has editorialized in support of the new regulations, was aghast at CARB's twisted science. We have to "be candid about the real costs of the transition," a cautionary editorial advised. "Energy prices will rise, and major capital investment will be needed in public transit and new transmission lines. Industries that are energy intensive will move elsewhere." The green lobby has lectured us for years that global warming is all about the sanctity of science. Those who question the "scientific consensus" on catastrophic atmospheric changes are belittled as "deniers." Now, in assessing the costs, the greens readily cook the books and throw good science out the window. "To most of the most strident supporters of this legislation," says Mr. Niello, "the economic costs don't really matter anyway, because we are supposedly facing an environmental apocalypse." Mr. Schwarzenegger fits into that camp. He recently declared: "I recommend very strongly that we move forward . . . . You will always have people saying this will lose jobs." Meanwhile, the state is losing jobs, a lot of them. California's unemployment rate hit 9.3% in December, up from 4.9% in December 2006. There are now 1.5 million Californians out of work. The state has the fourth-highest housing foreclosure rate in the nation, has lost more businesses than any state in recent years, and is facing a $40 billion deficit. With cap and trade firmly in place, the economic situation is only likely to get worse. Other states are plundering the Golden State's industries by convincing businesses to pick up stakes and move out before the cap-and-trade earthquake hits. Governors and Washington politicians who want to reduce their "carbon footprint," but are worried about the more immediate crises of cascading unemployment, unbalanced budgets, and the housing-market collapse, would be wise not to follow California's lead. Green policies have a tendency to push states into the red. Mr. Moore is senior economics writer for the Wall Street Journal editorial page

To: Cogito who wrote (105161)	3/1/2009 9:11:37 AM
From: quehubo	Respond to of 542836

From Opinionjournal An Inconvenient Tax Cap and trade yields 'climate revenues.' But don't call it a t--. That didn't take long. The same week that President Obama promised (again) that "95% of working families" would not see their taxes rise by "a single dime," his own budget reveals that taxes will rise for 100% of everyone for the sake of global warming. Ahem. You don't even have to burrow into yesterday's budget fine print to discover the "climate revenues" section, where the White House discloses that it expects $78.7 billion in new tax revenue in 2012 from its cap-and-trade program. The pot of cash grows to $237 billion through 2014, and at least $646 billion through 2019. If this isn't tax revenue, what is it? Manna from heaven? The offset from Al Gore's carbon footprint? If it brings in revenue that the government then spends, it's a tax, and politicians should start referring to it as such. The Administration in fact projects that these "climate revenues" will become the sixth largest source of federal receipts by 2019, outpaced only by individual and corporate income taxes, payroll taxes for Social Security and Medicare and (barely) excise taxes. We're supposed to be living in a new era of fiscal honesty, so let's start with cap and trade. Of course it's easy to see why Democrats don't want the public to think of cap and trade as a tax. Tax increases aren't popular, as Mr. Gore learned when he and Bill Clinton tried to impose a BTU tax in 1993. The complex cap-and-trade tax would ripple throughout the energy chain and ultimately the entire economy. All consumers, not just "the rich," would pay more for goods and services that use carbon energy -- though some would pay more than others. A majority of those "95% of working families" probably lives in the middle of the country that relies far more on manufacturing and coal-fired power than do the better-off coastal regions. Mr. Obama's Energy Secretary Steven Chu was refreshingly candid on this point with the New York Times earlier this month. Given that higher prices are supposed to motivate the changes necessary to reduce carbon energy use, Mr. Chu said he was worried that climate taxes may drive jobs to countries where costs are cheaper. "The concern about cap and trade in today's economic climate," he said, "is that a lot of money might flow to developing countries in a way that might not be completely politically sellable." You are correct, sir. Meanwhile, the political class loves a cap-and-trade tax because it gives them new economic and political power. Congress would create a new property right to expend CO2, setting a price per ton on carbon output, and then Congress would also get to determine the distribution of allowances. The Administration wants all of them to be auctioned off, which is what creates the giant revenue windfall. The politicians would then decide how to spend all of that new "climate revenue." Mr. Obama's budget proposes to spend this windfall on two items: $15 billion a year in more subsidies for alternative fuels, and $65 billion or so a year to finance tax subsidies for workers, many of whom don't pay income taxes. In other words, once this cap-and-trade tax is on the books, the revenue stream will create political constituencies that depend on it. No new pot of gold goes uncontested, however, so you can assume that Mr. Obama's priorities will not go unchallenged. Already on Capitol Hill, Charlie Rangel's tax committee and Henry Waxman's energy clan are feuding about who gets to divvy up the spoils. Not to mention who gets the political control that will become a source of tens of millions in new campaign contributions from thousands of affected businesses. By the way, the Congressional Budget Office estimates that cap-and-trade taxes would actually throw off as much as $300 billion every year -- not merely $78.7 billion -- and in a footnote the Obama budget implicitly acknowledges that its $645.7 billion estimate is a lowball: "All additional net proceeds will be used to further compensate the public." No doubt. And another article on this power grab and wealth transfer. Message 25454070