Green Business Awareness

Ever since the Kyoto Protocol set the stage for global concern and governmental intervention, the worldwide concern for global warming is inextricably tied to the production of carbon dioxide .  It was also at the Kyoto meeting that the phrase “Cap and Trade” seemed to find its voice and the concept has continued to grow as more and more governments saw this as the primary means to address the global warming concerns.  Now, Cap and Trade programs seem to be a growing trend, but the wisdom of yet another governmental program raises unsettling questions.

Just to add another opinion to the global warming issue, the natural and environmental solution seems to be getting minimal attention in the global community, and I think it is because they have not figured out a way to tax the trees.  This is more than a sarcastic swipe at governmental intrusion, but an objection to the boorish ignorance of the best solution that we have in the global warming concern.  If carbon dioxide is the named culprit of global warming, and tree remove carbon dioxide and release wonderful oxygen, why in the name of good sense aren’t there governmental initiatives with the same aggressive drive for a “Natural Solution?”  The need for heavy-handed governmental intrusion with a Green Tax or Cap and Trade should not be the singular solution while better solutions get a mild level of friendly encouragement.

Global warming is becoming something more than an environmental concern.  It is possible that global warming could be hijacked and used as political leverage, taxing opportunities, and power-mongering that will not serve the true issue at hand.  This would not be the first time opportunists have seized on a popular theme for political advantage. The fact that the Cap and Trade program promises that it will drive up the cost of energy.  This means that someone will get rich and the people at the bottom will struggle all the more.  This is worse than unfortunate.  The CBO report of February 2008 on the concerning Cap and Trade reports a 60 billion dollar market of these CO2 trading instruments in a speculative market where “banks, brokers, funds, arbitrageurs, and private traders now participate in a market valued at $60 billion in 2007.”  Does it start to make sense now?  This is becoming a multi-billion dollar marketplace where the fat cats will get fatter and the rest will watch from outside of their foreclosed homes.

Returning to my key issue, I am very concerned that the reforestation effort is a sideline issue promoted by private efforts with government encouragement.  Trees provide an immense benefit in sweeping the air of particles, taking out carbon dioxide, and replenishing the oxygen.  They serve other purposes as well.  They slow the rain and hold the soil in place which has obvious benefits.  They are a true natural resource.  It therefore seems to be that the best solution is lighten up on cap and trade and increase the reforestation efforts.  No matter the public rhetoric, we are looking at a solution that seems to offer no good solution except to aggravate people who are already financially stressed with a cost-laden program where the wealthy and powerful are lining up for “The Next Big Money Grab.”  There is a need for Toto to pull back the curtain once again to reveal the wizards behind the curtain that are pulling the levers to fool us all with their magic and seeming power.

Well realistically, trees are not nearly so much fun as people.  Trees charge nothing to do what they do.  They work at their task without complaint and without a government or union to control their production.  They can’t vote, and they never complain no matter how badly we treat them.  No wonder they have so little political weight in D.C. or other political conclaves.  At the end of the day, we will find that we may have taken the wrong route to the global warming issue chosing to fight nature with policital clout and taxation rather than joining with nature to find the solutions already in hand.  But then government cannot control nature, and worse yet, they can’t tax the trees.

Well, it’s started and the Congress is now in the throes of debate and accusations about the real meaning of the next energy bill put forward by Waxman and Markey.  It is obvious that the Obama administration and democrats favor this legislation.  Republicans see this law as a way to chase American jobs out of the country by further hamstringing U.S. businesses while other countries eagerly wait to replace our offerings with less regulated competition.  The question of real cost of these new regulation on a massively injured economy is yet another reason that many will oppose the proposed legislation.

The U.S. Chamber of Commerce has come out against the Waxman/Markey bill as well, saying:

Unfortunately, the debate in Congress has left the nation with two terrible options: (1) expensive, complicated, regulation-heavy, domestic-only legislation like ACES, or (2) an “even worse” set of mandatory CO2 controls on everyone and everything through existing Clean Air Act programs. The rigid ideology exhibited over the last twenty years of the climate change debate has not only clearly divided the nation but it has failed miserably to produce any results. Congress should stop, take a breath, and consider sensible policy alternatives that increase our energy security, promotes a strong economy, and contributes to a global reduction in emissions.

Democrats aren’t winning all the hearts and minds, though. Indiana’s governor sees dark plans afoot, in the WSJ: “It looks like imperialism. This bill would impose enormous taxes and restrictions on free commerce by wealthy but faltering powers — California, Massachusetts and New York — seeking to exploit politically weaker colonies in order to prop up their own decaying economies.”   House Democrats secured the support of Virginia Democrat Rick Boucher for the energy and climate bill—thanks to generous support for “clean coal”—bringing the bill one step closer to victory in committee.

The concern for global warming and energy independence is the driving force.  These concerns are real and need solutions.  That is not the heart of the debate, however.  It is the wisdom of heavy-handed, revenue-rich, government-controlled bills that further expands the Big Brother concerns of those who see their freedoms under attack once again.  Hard line environmentallist celebrate this bill, while struggling business and financially-crunch families fear it.

The 1000 page bill is likely to grow into a monster bill by the time it is done.  The revenue to the treasury is the prize at the end of the beaucratic maze.  And though the promise is that there will be tax relief given to the average citizen, I am still waiting for the toll roads (promised to be freeways in ten years) to remove the tool boths.  This bill is destine to become a Frankenstein that the villagers will wish to kill before it ravages the villagers once again.  I am lost on the logic that more regulation, taxation, and complication will help a problem that really calls for leadership that leads instead of dominates.

The environmental dicotomy is the position of supporting environmental causes, but resisting govenment intrusions that penalize society into conformity.  This is a return to the classic B. F. Skinner “Behavior Modification” that uses punishment and reward in uneven proportions.  Behavior modification always ends up punishment heavy and reward light.  The enlightened view is encouraging by leadership, and incentivizing through tax credits and increased opportunity those that you wish to change.

The Waxman/Markey bill should be killed at birth, and a more reasoned and simplistic solution may arise in the second round of bipartisan revision.

The planning is already underway to impose a sweeping “Green Tax” for any business putting out more than its fair share of carbon dioxide (Co2), and this is going to drive up the cost of everything. Of course, there are those who feel that higher prices will force greater conservation of our resources. Unfortunately, this proposed legislation refuses to recognize free-market ability to address and resolve nearly any commercial issue. By the way, I favor reduced Co2 emission as well, but not with this program.

This Green Tax and Cap-and-Trade program is the big secret debate where “Super Environmentalist Only” get to attend and input. The results will be new country wide tax will be imposed for the emission of carbon dioxide:

“Under a tax, policymakers would levy a fee for each ton of Co2 emitted or for each ton of carbon contained in fossil fuels. The tax would motivate entities to cut back on their emissions if the cost of doping so was less than the cost of paying the tax.” Policy Options for Reducinjg Co2 Emissions by the Congress of the United States - Congressional Budget Office

The CBO report considers only two options. One is the Green Tax mentioned above, and the second is a cap-and-trade program. You undoubtedly have heard Obama, Palozzi (Senate), and Smith (House) mentioning these ideas with great anticipation. You may also remember that the presidential candidate Obama used the phrase “Cap and Trade” in several of his speeches. President Obama still want a “Cap and Trade” bill out of congress, but he has met some stiff resistance to the concpet. The CBO report, dated February 2008 made this statement.

“In contrast, under a cap-and-trade program, policy-makers would set a limit on total emissions during some period and would require regulated entities to hold rights, or allowances, to the emissions permitted under that cap.” Ibid

The CBO proposal is more than impressive. It is a powerful tool to collect fees, fines, and penalties much like the power of the EPA over pollution violators. This would apply to all types of businesses in a kind of rationing like those seen during war times. The goal is ostensibly to reduce the use of fossil fuels by making the price of energy from these source too painful to endure. Everyone should know that energy is the life’s blood of business, and this will ripple through to every consumer as well.

We now have a voluntary system of carbon credit trading going on where businesses calculate their carbon output and then buy carbon offsets. The challenge of setting caps for all the types of businesses across America would be as confusing as the present tax code. It would also create another exchange of trading Co2 credits to those who use more than their share with those who use less.

“Cap and Trade” is certainly a regressive tax forcing American businesses to shackle themselves with more regulations, more intrusion, and more costs of operation. Why not incentivize this issue? Tax credits for Co2 reduction would be a far more enlightened position on the subject. There must be a free-market solution that creates a business coalition to answer this need. Of course, this is all being presented as an emergency and crises, which moves things through Congress with lightning speed and minimizes the opportunity for public notice and discussion.

Global warming is the battle cry. Carbon dioxide has been declared the public enemy causing global warming although there is dissent on this subject as well. Onerous taxes and intrusive regulation should not be the only answer to the challenges we face. Open the doors wide to innovation, incentivize with tax credits, and kill the poisonous snake called Cap and Trade before it sinks its teeth into the ailing taxpayer. We need encouragement, not punishment.