The Verdict’s In: Cap and Trade Will Not Work

Over the summer The Washington Post called Europe’s experience with cap and trade as “Exhibit A” of what not to do on climate. Yesterday, the Competitive Enterprise Institute’s Iain Murray brought evidence to the jury – that jury being Senate Environment & Public Works Committee. Murray detailed the failures of the EU cap and trade scheme. Despite the European Union establishing an Emissions Trading Scheme (ETS) in the year 2000, the United States has had similar or better emissions reductions than most countries:

“According to the United Nations Framework Convention on Climate Change and the International Energy Agency, the United States has reduced its greenhouse gas emissions 2 by 3 percent. By comparison, the only major economy to reduce its emissions more was France, at 6 percent. The United Kingdom managed a similar performance to the US at -2.9 percent. Most other economies performed much worse.”

Murray then refers to a study by the Taxpayers’ Alliance in London to weigh in the costs side of ETS and discusses what it would take to achieve a 20 percent reduction by 2020 – same as the Boxer-Kerry cap and trade bill in the United States:

 

EU emissions did drop a negligible 1.5 percent in 2008. Being charitable, let’s assume that all of that emissions drop can be ascribed to the ETS. If so, then to achieve the 20 percent reduction target the EU has for 2020, simple extrapolation suggests that will cost the EU a staggering $2.28 trillion that year (and the accumulated costs would be even more massive). In fact, the cost could be way higher than that, because we tend to make the more affordable cuts first; deeper cuts will naturally cost more per unit.”

In testimony in July, Heritage Senior Policy Analyst Ben Lieberman brought his own evidence to the table for why Europe’s model is not the one to follow:

We have also seen examples of fraud and unfairness in the process. Given the similar politics here, where big businesses have lobbied for free allocations much more effectively than the little guys–consumers, homeowners, small business owners, farmers–it is quite likely that the inequities would appear here as well.

The reason for the failure of carbon cap and trade is simple — reducing carbon dioxide from the existing installed base of energy-producing and -using equipment and vehicles is prohibitively expensive, and that isn’t likely to change any time soon. Many nations committed to emissions reductions under the Kyoto Protocol are going to miss the targets (unless the recession lingers) and any talk of tougher targets is empty rhetoric.”

Lost jobs. Lost income. Lost economic activity. Nothing to show for it. The evidence is incontrovertible. Let’s hope the jury listens.

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Filed under Global Warming, Heritage.com

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