Supporters of the Waxman-Markey cap-and-trade legislation tout the bill as a cure-all for reducing U.S. emissions, but the plan bears a striking resemblance to the European Union's plan, which failed miserably, points out Andrew P. Morriss in a recent McClatchy Newspapers
article.
"As American legislation, the cap-and-trade system applies only to American emissions, but only 22.2 percent of the world's carbon-dioxide emissions come from U.S. sources," said Morriss, a professor of business and law at the University of Illinois at Urbana-Champaign. "Since it is world emissions that potentially affect climate, reducing just one country's emissions does little good unless world emissions are cut."
The article explains that major emissions sources, like China, European Union and Russia have yet to agree on reducing emissions and even if we did have a global cap-and-trade system, it would be an economic disaster because it would raise the price of everything.
It's far more expensive to generate the same amount of power from non-carbon based energy sources like wind or solar photovoltaic electricity as it is coal, oil, or other carbon-based energy sources, explains Morriss. Because of this, a cap-and-trade approach would require a significant, widespread rise in energy prices, which "will likely produce both inflation and unemployment, returning us to the stagflation of the 1970s."
"Cap-and-trade sounds good, but what it offers is either a chance for politicians to reward special interests or a road to economic ruin," said Morriss. "As players in a struggling world economy, we can't afford either."