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In the Real World...

Posted By Conn Carroll On April 24, 2008 @ 1:56 pm In Energy | Comments Disabled

Virginia Postrel [1] voices the same frustration any honest economist feels witnessing the current state of accepted opinion on energy policy:

It’s infuriating how all three presidential candidates prattle on about the need to fight global warming while also complaining about the high price of gasoline. The candidates treat CO2 emissions as a social issue like gay marriage, with no economic ramifications. In the real world, barring a massive buildup of nuclear plants, reducing carbon dioxide emissions means consuming less energy and that means raising prices a lot, either directly with a tax or indirectly with a cap-and-trade permitting system.

This should be common sense, but environmentalists still believe they can pull a fast one on the American public by including just the right amount of rebates and incentives in legislation to make a cap-and-trade system appear cost free. The latest study from MIT analyzes these scams under the most generous possible assumptions and still finds: [2]

  • The price of gas increases by 42 percent by 2020.
  • The price of electricity increases by 55 percent by 2015.
  • Total economic output as measured by GDP drops by about 1 percent by 2035.

And this is assuming a U.S. cap-and-trade system would allow for at least 15 percent  of carbon offsets to be bought from overseas. The inability to properly verify these carbon reductions [3] proved to be the Achilles heel of the European Union program, and it guarantees the system will fail. [4]


Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2008/04/24/in-the-real-world/

URLs in this post:

[1] Virginia Postrel: http://www.dynamist.com/weblog/archives/002761.html

[2] still finds:: http://web.mit.edu/globalchange/www/MITJPSPGC_Rpt146_AppendixD.pdf

[3] The inability to properly verify these carbon reductions: http://www.foundry.org/2008/01/09/ftc-carbon-offset-investigation-previews-cap-and-trade%e2%80%99s-imminent-failure/

[4] proved to be the Achilles heel of the European Union program, and it guarantees the system will fail.: http://www.foundry.org/2008/04/15/why-is-the-president-embracing-failure/

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