- [ ]Cap and trade for sulfur dioxide emissions is not comparable to cap and trade for carbon dioxide. Proponents of cap and trade point to the sulfur dioxide program as an example of how easy and effective it would be to institute an economy-wide cap and trade program for CO2. But sulfur dioxide and carbon dioxide emissions are not comparable. When the sulfur dioxide program started, it targeted only 110 coal-fired power plants. Later, it was expanded to 445 power plants.
[10] Greenhouse gas emissions are released from millions of sources, including electricity production, planes, trains, automobiles, ships, home furnaces, fertilizer production, farm animals, and millions of other sources, including humans. Regulating millions of different and individual sources of emissions is considerably different from regulating 445 plants. Also, many low-cost sulfur dioxide control options existed when the program took effect.
[11] This is not the case with carbon dioxide control technologies. There are no control technologies that are commercially available at commercially-competitive prices. One way to reduce sulfur dioxide emissions was to use ?low-sulfur coal? but there is no ?low-carbon dioxide coal.?
[12]
Indeed, the cost-effective way to reduce carbon dioxide emissions is to use less energy. But energy is the lifeblood of the economy. Energy allows us to do more work with less time and effort. As a result, there is a strong correlation between energy use and economic prosperity, as the chart below demonstrates:
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A domestic cap and trade program, even in the best case, can only produce marginal impacts on climate. In 2006, China surpassed the United States as the world?s largest emitter of carbon dioxide.
[13] But the difference in emission growth rates is striking. According to data from the Global Carbon Project, from 2000 through 2007 global total greenhouse gas emissions increased 26 percent. During that same period, China?s carbon dioxide emissions increased 98 percent, India?s increased 36 percent and Russia?s increased 10 percent. Carbon dioxide emissions in the United States increased by three percent from 2000 through 2007.
[14] These data are displayed in the graphic below:
As time goes on, the United States will emit a smaller and smaller share of the world?s total greenhouse gas emissions,
[15] which makes unilateral efforts? such as a domestic cap and trade program?an ineffective way to influence climate. If the United States were to completely cease using fossil fuels, the increase from the rest of the world would replace U.S. emissions in less than eight years.
[16] If we reduced the carbon dioxide emissions from the transportation sector to zero, the rest of the world would replace those emissions in less than two years.
[17] Increases in worldwide carbon dioxide emissions are driven by developing economies, not the United States.
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A domestic cap and trade program will force more industries to leave America. Energy costs are a major expenditure for heavy industry. America?s natural gas prices are the highest in the world,
[18] even though we have the world?s sixth largest proven natural gas reserves.
[19] The high price of natural gas has significantly contributed to the loss of more than 3,000,000 manufacturing jobs since 2000.
[20] Cap and trade taxes will drive up the cost of natural gas because companies would use it as a substitute for coal in electricity production, which means increased electricity costs for industry and the individual. This is especially troublesome for chemical companies, all of which use natural gas not only as an energy source, but also as a feedstock. Higher natural gas prices will force them to pursue options offshore and overseas, reducing American jobs.
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A cap that is set at the wrong level will cause great economic harm. Even the proponents of carbon taxes, such as Yale University Professor William Nordaus, find that once there is deviation from worldwide participation, the costs of achieving environmental global improvements dramatically rise. Nordhaus? economic model shows that an overly ambitious and/or inefficiently structured policy can swamp the potential benefits of a perfectly calibrated and efficiently targeted plan.
[21] For example, Nordhaus? optimal plan yields net benefits of $3 trillion ($5 trillion in reduced climatic damages and $2 trillion in abatement costs). Yet other popular proposals have abatement costs that exceed their benefits. Take for example former Vice President Al Gore?s 2007 proposal. It sought to reduce carbon dioxide emissions 90 percent by 2050. Nordhaus? model estimates this plan would make the world more than $21 trillion poorer than if there were no controls on carbon dioxide.
[22]
Institute for Energy Research Blog Archive Cap and Trade Primer: Eight reasons why cap and trade harms the economy and reduces jobs
