When the housing bubble burst, it exposed an unseemly alliance between special interests and the financial sector. Activists wanted homes for all at any cost, and lenders were happy to oblige despite the inherent risk.
Although the economic devastation this bubble wrought is still not under control, a similar toxic alliance is working on the next one: The green bubble.
USCAP’s Myopic Vision
Failing companies such as AIG, General Electric, and General Motors, already propped up by tax dollars, have partnered with radical environmentalists in a scheme their CEOs believe will allow them to profit on fears about global warming.
Corporate members of the U.S. Climate Action Partnership (USCAP), a coalition of more than 30 businesses and environmental groups urging federal regulation to combat global warming, hope to make money through a government-mandated reduction in greenhouse gases called a "cap-and-trade" system. Emissions such as carbon dioxide would be capped, and companies using more emissions than allotted by the government would have to purchase credits from other businesses.
USCAP and its cap-and-trade agenda were the focus of a U.S. House Energy and Commerce Committee hearing on January 15 — the committee’s first since the more radical Rep. Henry Waxman (D-CA) ousted longtime chairman Rep. John Dingell (D-MI).
Companies hope to profit from selling their excess emissions credits to businesses with high carbon dioxide emissions. Such companies seeking to acquire more credits would include coal-based utilities. Companies burdened with purchasing these credits will naturally have to pass the added cost of doing business on to consumers.
Additionally, some companies want new regulation to mandate sales of their renewable energy products such as wind turbines and solar panels. But banking on cap and trade exposes a myopic vision of the part of these big business executives.
Just as banking CEOs thought real estate prices could only go up, USCAP-affiliated CEOs apparently believe there is scant risk in high energy prices and a massive new bureaucracy.
Hard Hits for U.S. Public
In reality, a cap-and-trade system would unleash a series of adverse economic consequences and hardships on the American people:
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A study by the National Association of Manufacturers projected that emissions caps similar to those rejected by the U.S. Senate in 2008 — calling for a 63% cut in emissions by 2050 — would reduce U.S. gross domestic product by up to $269 billion and cost 850,000 jobs by 2014.
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An April 2007 Massachusetts Institute of Technology study concluded cap-and-trade restrictions could raise gasoline prices by 29%, electricity prices by 55%, and natural gas prices by 15% by 2015.
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A 2007 report by the bipartisan Congressional Budget Office on the cost of cutting carbon emissions by just 15% noted that Americans "would face persistently higher prices for products such as electricity and gasoline. Those price increases would be regressive in that poorer households would bear a larger burden relative to their income than wealthier households would."
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