rssAnd Here Comes the Right-Wing Rage …
Tuesday, March 31, 2009 at 3:18 pm
- 2 Comments
Surprise! Conservatives don’t like the House Democrats’ energy and climate draft bill. From The Corner:
648 Pages of Ruin
There’s a lot of ruin in a nation, which is why it is taking Henry Waxman (D., Us Magazine) and Edward Markey 648 pages to finish America off. That’s the length of their draft of a Global Warming and Energy Bill, just circulated today (we should have the text up at GlobalWarming.org soon). The bill contains everything you’d expect from an Al Gore wish list and will assuredly raise energy prices to crippling levels, as well as finish off the auto industry as we know it.
You have to wonder exactly what they expected.
Perhaps the most striking feature of the draft bill is its silence on whether carbon allowances will be auctioned or how much they will cost. Republicans were up in arms when President Obama’s budget proposal anticipated $646 billion in cap-and-trade revenue from selling allowances; they immediately labeled it a $646 billion energy tax. Yet the Waxman-Markey bill leaves open the possibility that the allowances will be given away to polluters for free — exactly what Republicans like Sen. John McCain (Ariz.) have been arguing for.
So it’s entirely conceivable that energy price increases resulting from this legislation will be lower than anyone anticipated. I imagine that the post on The Corner would have read identically no matter what the details of the draft bill.
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2 Comments
Comment posted April 1, 2009 @ 6:20 am
The increase in retail energy prices will be exactly the same whether allowances are auctioned or not. The difference will be in who gets the transfer of income from consumers. With an auction the government gets the transfer, just like a tax increase. Without an auction the transfer from consumers goes to increase energy company (and shareholder) profits. A good analogy would be an officially sanctioned energy cartel that is able to raise retail prices because of its monopoly power (the limited number of allowances being the source of the monopoly power). The consumer will get screwed to precisely the same extent. But there would a huge difference in how the fruits of that screwing are distributed.
Comment posted April 1, 2009 @ 1:20 pm
The increase in retail energy prices will be exactly the same whether allowances are auctioned or not. The difference will be in who gets the transfer of income from consumers. With an auction the government gets the transfer, just like a tax increase. Without an auction the transfer from consumers goes to increase energy company (and shareholder) profits. A good analogy would be an officially sanctioned energy cartel that is able to raise retail prices because of its monopoly power (the limited number of allowances being the source of the monopoly power). The consumer will get screwed to precisely the same extent. But there would a huge difference in how the fruits of that screwing are distributed.
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