One of the greatest threats to freedom and economic prosperity in America today is climate change legislation. Environmental activists and the media have taken computer-generated scenarios of environmental catastrophe and used them as levers to demand radical income redistribution schemes. As a result, there is almost no policy considered too extreme if it “fights global warming.”
As drastic policy objectives move forward, the general public will become increasingly alarmed at the true costs of these policies, especially those advocating the forced rationing of fossil fuels such as cap-and-trade and other carbon “capping” regulations.
Cap-and-trade schemes and other mandated CO2 caps create a commodity literally “out of thin air” that can be taxed, gamed, and profited from, all at the expense of the consumer. As mandated greenhouse gas reductions have been implemented in Europe for the past few years, carbon trading has grown exponentially in response. In addition to purchasing potentially expensive pollution “allowances,” greenhouse gas reduction regulations frequently contain carbon-offsetting mechanisms in order to provide another avenue for businesses to meet stringent caps. Since most consumers and businesses cannot easily change their fossil fuel use in the short run, most buy carbon offsets while continuing to rely on traditional energy sources. The international offset market has been rife with scandal, largely due to the fact that carbon offsets have no underlying value outside of a contrived regulatory scheme. Since CO2 is not an actual pollutant, reducing it provides no environmental or health benefits except the projected and far-from-measurable global warming mitigation “benefit.”
By artificially creating carbon dioxide limits through a cap-and-trade scheme, a massive run-up in the price of carbon offsets and allowances is created. As the bubble in carbon dioxide value rises with increasingly stringent limits, political pressure will grow to maintain those high prices by rationing energy even more, making it impossible to undo a government-enforced carbon cartel. This will confer windfall profits on those firms that successfully game the system, but consumers will have to pick up a tab that is likely to cost trillions of dollars worldwide while providing little or no environmental benefit.
The goal of the Carbon Cartel Education Project is to raise awareness of the costs and implications of policies based on global warming alarmism by conducting a multi-faceted campaign to peel away grassroots political support for carbon restrictions, while simultaneously promoting market-based policies that preserve individual liberty, economic opportunity, and environmental quality.
For more information, please contact Todd Wynn at (503) 242-0900.
To get started with the Carbon Cartel Education Project, check out the links below:
Economic Freedom: A No Regrets Strategy for Reducing Global Energy Consumption
An interview with Todd Wynn on his paper Economic Freedom: A No Regrets Strategy for Reducing Global Energy Consumption
Featured Cascade Policy Institute Reports:
Summary: This empirical study exposes a relationship between greenhouse gas intensity, energy intensity and economic freedom. The level of a country’s economic freedom is a statistically significant and negative determinant of both energy intensity and greenhouse gas intensity. Countries with higher levels of economic freedom not only have more energy efficient and less carbon intensive economies, but over time these countries continue to decrease the amount of energy used and the amount of carbon dioxide emitted per unit of production. The merits of free markets and economic prosperity should not be overlooked as a potential method for reducing carbon emissions.
Summary: This report offers an in-depth look into one of the most prominent carbon offset marketers in the United States, the Bonneville Environmental Foundation (BEF). The audit casts serious doubt on whether carbon offsets will ever be a product that can be verifiable and additional. The problems that plague the carbon offset concept will most likely never be solved, meaning that the offset mechanism will always be questionable in delivering real verifiable reductions in greenhouse gases
Randall J. Pozdena, Ph.D.
Summary: Concerns about climate change necessarily have focused attention on the energy and carbon “footprint” of various sectors of the economy. Particular attention has been focused on the transportation sector and private vehicle travel in particular. For example, the May 15, 2009 proposal by Senators Jay Rockefeller and Frank Lautenberg requires that the next federal transportation bill “reduce national per capita motor VMT on an annual basis.” With some state climate initiatives calling for reductions in carbon emissions of as much as 40 percent of today’s levels in a decade, further focus on the transportation system and private highway use is inevitable.
Summary: Because cap-and-trade programs and other wide-ranging carbon emission reduction strategies rely heavily on offsets to reduce compliance costs, Cascade Policy Institute audited the leading offset provider in Oregon, the Climate Trust. This report takes a close look into the Climate Trust’s offset portfolio and shows that numerous problems undermine the quality and true effectiveness of the organization’s purpose.
Randall J. Pozdena, Ph.D. and Eric Fruits, Ph.D.
Summary: In 2008, Cascade Policy Institute undertook this independent economic study with QuantEcon, Inc. in order to assess the quantifiable and measurable costs associated with a cap-and-trade program or any other wide-ranging greenhouse gas reduction strategy. The study finds that economic vitality, energy use and carbon dioxide emissions have been tightly co-integrated historically, and that energy strongly “causes” economic vitality. Because of this, the costs to Oregon’s economy of meeting the emission reduction goals of Governor Ted Kulongoski’s Climate Change Agenda are substantial. The study predicts that by 2020 Oregon’s economic growth would be cut approximately in half, there would be 90,000 fewer jobs, and state and local revenues would be $4.4 billion dollars lower.
David Tuerck, Ph. D., Paul Bachman, MSIE, Alfonso Sanchez-Penalver, MSF, and Michael Head, MSEP., Beacon Hill Institute
Summary: In a thorough review of the claims made by the Western Climate Initiative (WCI), the Beacon Hill Institute at Suffolk University identified several flaws made by the seven state consortium, calling into question so-called regional cost savings ranging between $11.4 billion and $23.5 billion. These flaws render WCI’s projections useless in determining the WCI’s cost to state economies. Beacon Hill Institute found that WCI’s policy recommendations “would have substantial negative effects” on the economies of its member states. BHI determined that, by 2020, Oregon would lose from 1,823 to 10,748 private sector jobs and would find total personal income diminished, falling by $320.6 million to $2,419.17 million per year.
- The Problem with a “Cap and Trade” System Abigail Haddad, American Enterprise InstituteNovember 17, 2008
- Why Cap and Trade Won’t Work for IllinoisLiam Rinehart, Illinois Policy InstituteJune 24, 2008
- Green Herring: Obama Tries to Hide the Cost of his Global Warming SolutionJacob Sullum, Reason FoundationNovember 5, 2008
- Climate Change Policy: A Cost Effective Strategy for the U.S. and Oregon Margo Thorning, Ph. D. , American Council for Capital Formation2007