The most dangerous proposal in the new budget is the institution of a cap-and-trade system for carbon emissions. Indeed, the single largest source of new tax revenue in the budget going forward are these payments to be made by businesses for the right to emit excess carbon.
The goal is an 83% reduction in carbon emissions by 2050 compared to 2005 levels.
That would bring US per capita emissions of CO2 down to a level below what we had in the 1700s. As Steven Hayward wrote in the WSJ last April about an 80% reduction then on the table:
Begin with the current inventory of carbon dioxide emissions – CO2 being the principal greenhouse gas generated almost entirely by energy use. According to the Department of Energy's most recent data on greenhouse gas emissions, in 2006 the U.S. emitted 5.8 billion metric tons of carbon dioxide, or just under 20 tons per capita. An 80% reduction in these emissions from 1990 levels means that the U.S. cannot emit more than about one billion metric tons of CO2 in 2050.
Were man-made carbon dioxide emissions in this country ever that low? The answer is probably yes – from historical energy data it is possible to estimate that the U.S. last emitted one billion metric tons around 1910. But in 1910, the U.S. had 92 million people, and per capita income, in current dollars, was about $6,000.
By the year 2050, the Census Bureau projects that our population will be around 420 million. This means per capita emissions will have to fall to about 2.5 tons in order to meet the goal of 80% reduction.
It is likely that U.S. per capita emissions were never that low – even back in colonial days when the only fuel we burned was wood. The only nations in the world today that emit at this low level are all poor developing nations, such as Belize, Mauritius, Jordan, Haiti and Somalia.
Recognize that the cost of the cap-and-trade system far exceeds the tax collected from those who are willing to pay the money just to exceed the limits set by the government. The businesses that do not buy indulgences face the cost of the restrictions themselves.
If Obama succeeds in his quest to reduce carbon emissions by 83% by 2050, American business will be destroyed. Manufacturing in the US will essentially disappear to countries that do not have anti-business, anti-growth policies, mostly in the Far East.
It would be hard to imagine a government policy that is likely to be more destructive of jobs and economic growth than this one.
Related Posts (on one page):
- Congress Votes to Change the Weather.
- More transparency in the House.
- Smug Alert: House May Pass Cap-and-Trade, the 21st Century Version of Smoot-Hawley.
- Will Cap and Trade Pass Congress?
- Bringing Per Capita Carbon Emissions Down to Below 1700s Levels.