When
"Market-Based" Is a Facade
George Will
Sunday, June 01, 2008
WASHINGTON - An unprecedentedly radical government
grab for control of the American economy will be debated this week
when the Senate considers saving the planet by means of a
cap-and-trade system to ration carbon emissions. The plan is
co-authored (with John Warner) by Joe Lieberman, an ardent
supporter of John McCain, who supports Lieberman's legislation
and recently spoke about "the central facts of rising
temperatures, rising waters and all the endless troubles that
global warming will bring."
Speaking of endless troubles,
"cap-and-trade" comes cloaked in reassuring rhetoric
about the government merely creating a market, but government
actually would create a scarcity so government could sell what it
has made scarce. The Wall Street Journal underestimates
cap-and-trade's perniciousness when it says the scheme would
create a new right ("allowances") to produce carbon
dioxide and would put a price on the right. Actually, because
freedom is the silence of the law, that right has always existed in
the absence of prohibitions. With cap-and-trade, government would
create a right for itself -- an extraordinarily lucrative
right to ration Americans' exercise of their traditional
rights.
Businesses with unused emission allowances could
sell their surpluses to businesses that exceed their allowances.
The more expensive and constraining the allowances, the more money
government would gain.
If carbon emissions are the planetary menace that
the political class suddenly says they are, why not a
straightforward tax on fossil fuels based on each fuel's carbon
content? This would have none of the enormous administrative costs
of the baroque cap-and-trade regime. And a carbon tax would avoid
the uncertainties inseparable from cap-and-trade's government
allocation of emission permits sector by sector, industry by
industry. So a carbon tax would be a clear and candid incentive to
adopt energy-saving and carbon-minimizing technologies. That is
the problem.
A carbon tax would be too clear and candid for
political comfort. It would clearly be what cap-and-trade deviously
is, a tax, but one with a known cost. Therefore, taxpayers would
demand a commensurate reduction of other taxes. Cap-and-trade --
government auctioning permits for businesses to continue to do
business -- is a huge tax hidden in a bureaucratic labyrinth of
opaque permit transactions.
The proper price of permits for carbon emissions
should reflect the future warming costs of current emissions. That
is bound to be a guess based on computer models built on guesses.
Lieberman guesses that the market value of all permits would be
"about $7 trillion by 2050." Will that staggering sum pay
for a $7 trillion reduction of other taxes? Not exactly.
It would go to a Climate Change Credit Corp., which
Lieberman calls "a private-public entity" that, operating
outside the budget process, would invest "in many
things." This would be industrial policy, aka socialism, on a
grand scale -- government picking winners and losers, all of whom
will have powerful incentives to invest in lobbyists to influence
government's thousands of new wealth-allocating decisions.
Lieberman's legislation also would create a
Carbon Market Efficiency Board empowered to "provide
allowances and alter demands" in response to "an impact
that is much more onerous" than expected. And Lieberman says
that if a foreign company selling a product in America "enjoys
a price advantage over an American competitor" because the
American firm has had to comply with the cap-and-trade regime,
"we will impose a fee" on the foreign company "to
equalize the price."
Protectionism-masquerading-as-environmentalism will thicken the
unsavory entanglement of commercial life and political life.
McCain, who supports Lieberman's unprecedented
expansion of government's regulatory reach, is the scourge of
all lobbyists (other than those employed by his campaign). But
cap-and-trade would be a bonanza for K Street, the lobbyists'
habitat, because it would vastly deepen and broaden the upside
benefits and downside risks that the government's choices mean
for businesses.
McCain, the political hygienist, is eager to reduce
the amount of money in politics. But cap-and-trade, by hugely
increasing the amount of politics in the allocation of money, would
guarantee a surge of money into politics.
Regarding McCain's "central facts,"
the U.N.'s World Meteorological Organization, which helped
establish the Intergovernmental Panel on Climate Change --
co-winner, with Al Gore, of the Nobel Prize -- says global
temperatures have not risen in a decade. So Congress might be
arriving late at the save-the-planet party. Better late than never?
No. When government, ever eager to expand its grip on the governed
and their wealth, manufactures hysteria as an excuse for doing so,
then: better never.
Copyright © 2008 Salem Web Network. All Rights Reserved.
