Finance, Forex and Investments

Can "carbon taxing" actually result in more CO2?

According to the US EIA (a division of the Dept. Of Energy) 90% of all future CO2 emissions will come from developing Asia. Even if anthropogenic Co2 contributes significantly to global warming (many scientists think that it does not – http://www.petitionproject.org/ ), what good will come from wrecking the American economy forever. Supply vs demand will undo any short term good which comes from America's reduction in the use of fossil fuels. Take coal for example. If coal usage in the US falls as a result of carbon taxing schemes, the demand for coal will fall and therefore the price will fall in the short run. As the price drops in the US, foreign demand will increase. Yes Virginia, coal is an easily exported commodity. Therefore, China, India, Taiwan, South Korea, Europe etc.. will have less incentive to pursue other energy options such as nuclear, solar, wind etc.. Those economies will quickly consume all of the incremental coal which is not being burned in the US as a result of carbon taxing. FYI for the uninformed, currently India and China alone combined consume 50% more coal than do all of North America and Europe "combined". If this issue was left to the “market place” for resolution, it is really very likely that less coal would be burned in the future if the price of coal was simply allowed to rise as a result of increased demand. Knowing that coal prices could ultimately double is exactly the incentive needed by India and China to increase their investments in nuclear, solar, wind, hydro etc.. The hysteria over coal in the US (the country with the world's largest coal reserves) will surely result only in China and India modifying their energy plans to include more coal and less "other". PS, based on their energy plans it is apparent that the governments of India and China believe that AGW is utter nonsense. The driver for their energy policies is driven 100% by economic reasoning so they have absolutely no incentive to modify their energy policies and retard the growth of their economies to reduce the use of fossil fuels simply because leftist Western enviro-tards mistakenly believe that they should. http://www.opposingviews.com/articles/opinion-obama-s-carbon-dioxide-restrictions-are-costly-and-pointless-r-1243528927 According to the U.S. Energy Information Administration’s economic forecasting model, a 70% cut in carbon dioxide emissions will cause gasoline prices to rise 77% over baseline projections, will cause electricity prices to more than double over baseline projections, will kill more than 3 million jobs versus baseline projections, and will reduce average household income by more than $4,000 each and every year.

Public Comments

1. Sounds like you don't know much about how cap and trade or a carbon tax work. http://news.yahoo.com/s/afp/20090527/sc_afp/chinausclimatewarmingdiplomacy;_ylt=Agg2Z3nV7mTGlE9iq2MCi0xpl88F
2. Regardless of the scheme, this is the introduction of a metric and defined rules based on that metric when previously there were no metric no rules. Now that there are rules, people will be able to study them and try to optimize within the rules to their own benefit, as the rules are basically being set almost arbitrarily, the net effect will be that industry will optimize their emissions to be the maximum allowed under the new rules and this may very well be more then it was before. However, it gives us a mechanism by which progressive reductions can be made and hopefully there won't be any easily exploitable loopholes though I'm certain that there is.
3. Some naive people actually think that this is for real. http://news.yahoo.com/s/afp/20090527/sc_afp/chinausclimatewarmingdiplomacy;_ylt=Agg2Z3nV7mTGlE9iq2MCi0xpl88F How silly. This is but a democratic puff peace which is designed to convince fence sitters that China will follow if the US leads. China is already planning on building more nuclear power and more wind and solar than anywhere else in the world. But, China and India will continue to burn coal at a rate which will increase at 4% per year. Those who think that China and India will risk the political turmoil which will result from mass unemployment and starvation are really being blind, deaf and dumb! Regardless of what happened with the meeting with the Chinese, Pelosi and company would have spun it in a positive way because that is what she went there to accomplish. This is but a political "puff peace". China will do what is in China's best interest. Only naive children would think that China will follow the US down this road to nowhere.
4. You raise the important point that any solution must be worldwide. The easy solution is for the developed world to established disincentives to trade with nations that do not sign a worldwide treaty that establishes caps. Make it profitable to reduce CO2 anywhere in the world.
5. The cap-and-trade tax proposed by Reps. Henry Waxman (D-CA) and Edward Markey (D-MA) is disguised as environmental legislation when it would have little impact on global temperatures. In fact, it is a massive energy tax that promises soaring household energy bills, major job losses, income cuts, and a sharp left turn toward big government.