Gunpowder Chronicle posted on May 12, 2008 11:10 PM | Rating:
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There has been a lot of foot stomping in Conservative America about John McCain's endorsement of cap-and-trade as a so-called market-based solution to restricting so-called "greenhouse gas" emissions. But no one has really asked "Why does he back this method"?
The answer is simple: because John McCain is a big-government Rockefeller-style blue-blazer country club Republican, and cap-and-trade will only benefit big business.
Why? We need look no further than electricity deregulation for our model. We have been down this road before. And if your sphincter is tightening, it should be. This scheme has a high pucker factor.
Remember how we were told that electricity deregulation would drive market prices down by opening up competition in the electricity provision business, since electricity could now be sold more freely across state borders AND we would break the back of the "hated" public utility monopolies?
The only problem is that it was all a lie. Residential power -- until 1999 -- had always been highly subsidized by higher commercial rates. Big business -- who paid those higher rates -- wanted a way to not pay those subsidies. Ken Lay had figured out a way: brokering the sale of electricity across state lines between power companies. Enron created a whole new marketplace in energy trading. Of course, today, most of that market is owned by companies like Constellation Energy, which purchased a large part of the bankrupt Enron's assets.
One of the reasons holding companies like Constellation insisted that their regulation distribution utilities (like BGE) sell their power plants is that they new the money-making would come in generation and trading, not in distribution. In fact, if you look at the vast BGE network, you will see a lot of it outright failing. I myself have two poles in my yard -- one that has been tagged for replacement for a decade and another that is so rotten at the base, it is supported by two 3/4" thick u-channels that are eight feet long.
Companies like Constellation make their money off trading energy -- buy low and sell high. Very high, in Constellation's case.
Cap-and-trade will work the same way. The government will create an entirely new cap-and-trade industry, and companies -- big, big companies -- will make their money off the vig, or difference between the buy and sell price. Cap-and-trade will become another protected big government business. It will not combat global warming. In fact, because of the cost -- that is, the cost to you and me, it will most DEFINITELY pull investment out of the marketplace that would go towards innovative solutions to both our energy supply problems and any so-called greenhouse gas emissions.
Big government/Big Business solutions are not what is needed. They never work. Ever. Innovation and creativity are what is needed.