RE: The audacity of cap and trade

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I don’t know why I keep reading these pieces, I am drawn to them.  Watts Up With That? has a piece that tries to rail against Obama’s latest announcement about vehicle emission standards.  Obama’s plan would cause American fleets to be revamped and hence more fuel efficient which woudl then offset the increase in vehicle price.

The wirters there, though, think they have a contracdiction in hand by isolating how Obama’s cap and trade mechanism woudl cause energy prices to rise, cutting against Obama’s planned savings by efficiency.  A few problems though.

1.  Cap and trade is directed at electricity generation and manufacturing.  The price of electricity would rise, not the price of gasoline.  In the US only 1% of electricity is generated by burning petroleum, so cap and trade will only have indirect effects upon the transportation sector.  It is also possible that the rise in electricity prices is a short term spike.  New production technologies would come on line dropping the price (I do believe this is the accurate model although there are some fairly persuasive arguments on the other side.)  There is no link to their supposed contradiction.

2.  Even if the price of petroleum were to be raised the people at Watts have made no attempt to measure the thresholds.  The fuel price rise would cut into efficiency savings, but to say they would swamp efficiency gains is a silly argument.  At odds?  Probably.  Counterproductive?  No.  The swamping claim assumes a static demand, which is the worse example of the elitism they accuse Obama of.

3.  The Watts argument is incomplete becasue it leaves out of the terminal impact Obama is trying to avoid.  Maybe it has already established itself as a place for denying the impact of climate change (I do believe there is anthropogenic climate change even though the apocalyptic impact scenarios are specious.)  But, if one believes in the disastrous predictions then the Obama contradiction still makes sense because decreasing CO2 emissions is still paramount.

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