Cap-and-Trade’s Negative Effect on Businesses
These CEOs don’t seem to realize the impact that cap-and-trade could have on their own companies. At the 2007 shareholder meeting of USCAP member Caterpillar, the world’s largest manufacturer of construction equipment, CEO James Owens confessed he had not conducted a cost-benefit analysis of emissions regulation on his business. If he had, he would have learned that cap and trade would harm the coal industry — a key Caterpillar customer.
ConocoPhillips CEO James Mulva has also turned a blind eye to the long term. Under cap and trade, his company’s investment in Canadian oil sands, which release about three times more carbon dioxide than traditional oil, would become more costly. Furthermore, the Natural Resources Defense Council, a USCAP partner, currently is taking legal action to block the processing of oil sands at a ConocoPhillips refinery.
General Electric (GE) CEO Jeff Immelt’s vocal support of cap and trade exposes his incompetence that has lead the company’s share price — now trading at 14-year lows — to underperform in both bull and bear markets and to require federal backing of its debt.
Whatever profits GE makes from the sales of its wind turbines will be more than offset by the negative consequences of cap and trade on the broader economy. Higher energy prices, reduced economic growth, and higher unemployment will prolong the recession and cut demand for its other business units’ products such as jet engines, locomotives, and household appliances. In addition, consumers will find it harder to meet payments to GE Money (which provides private label credit cards to various retailers) and to take vacations at NBC Universal theme parks.
Finally, Immelt is risking a public relations nightmare by promoting GE’s "green" image. Not only does GE continue to sell turbines for fossil fuel – generated electricity, but under Immelt’s leadership, GE also sold electricity and oil infrastructure equipment to Iran — a state sponsor of terror that has well-publicized nuclear ambitions.
As cap-and-trade policy raises prices and reduces jobs, America will slip further into economic chaos.
Our economy, already reeling from the bursting of one corporate bubble, can’t afford another one.
—Tom Borelli, PhD (tom@feafund.com) is director of the Free Enterprise Project at the National Center for Public Policy Research.
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