Last Thursday, Harry Reid glumly decided that cap and trade is dead, an announcement that conservatives celebrated, while reactions among environmentalists vacillated between depression and anger. While the abandonment of this economically crippling plan is important, it would be a mistake to believe that the end of cap and trade means that attempts to artificially limit fossil fuel use through government fiat in the United States are dead as well. The truth is quite the opposite. Without cap and trade, the federal government will have a much harder time grabbing a bigger chunk of consumers’ energy dollars in the name of promoting “green energy,” but that’s quite a bit different from saying that green energy initiatives are going away altogether. We’re already living with greenhouse gas reduction programs, and these programs will have a bigger and bigger impact on our lives and pocketbooks as time goes on.
Serious attempts to cut greenhouse gas emissions, through the use of biofuels and renewable energy and by increasing energy efficiency, kicked into high gear during the Bush administration. A decade later, we’re seeing the effects. Wendell Cox summarized the results of those efforts in an article he wrote for New Geography. According to a study conducted by the Netherlands Environmental Assessment Agency, per capita emissions of greenhouse gases in the United States declined by sixteen per cent between 2000 and 2009. That reduction is almost fifty per cent better than what the fifteen richest nations in Europe (the EU-15) could achieve in the same time frame, even though Europe has had a cap and trade program in place.
Environmentalists who are certain that mankind’s use of fossil fuels will turn the globe into a smelting furnace, have been winning this war for a long time. Losing cap and trade isn’t really much of a defeat in terms of their stated goal: to reduce emissions of greenhouse gases in the industrialized world. But that didn’t halt the petulant reactions when environmental groups learned that Reid and company have given up on one of their pet projects. Take this one from David Hawkins, director of climate programs for the Natural Resources Defense Council:
Senate Majority Leader Harry Reid today delivered very bad news to the American people. Continuing obstructionism by the Senate Republican leadership, joined by a handful of Democratic senators, is still blocking the way forward on essential clean energy and climate legislation. Over the recess we must deliver a message to senators: “Do your job! …. Don’t come home again without having tackled these real and present dangers.”
Advocates like Hawkins don’t ever acknowledge the remarkable reductions in greenhouse gas emissions that we have already made. Nor do they ever recognize all of the steps to reduce greenhouse gas emissions that we have already taken: the regional cap and trade programs that are in place or soon will be; the fact that three-quarters of the states in the Union are already committed to making substantial greenhouse gas reductions through Renewable Portfolio Standards; the EPA’s plans to further reduce greenhouse gas emissions using the Clean Air Act; and the existence of all the subsidies that push wind power, solar power, and bio-fuel production, despite the relative expense of all three when compared to fossil fuels. It’s possible that an environmentalist like Hawkins doesn’t understand all that’s happened and will continue to happen, with or without a cap and trade program, but the more likely explanation for his sort of sneering reaction is sheer hubris. The tree hugging crowd is used to getting their way – they are protecting an entire planet after all – so they’re not going to suffer even a meaningless defeat gracefully.
If, like me, you believe that there’s no good reason not to tap North America’s abundant sources of fossil fuels, and that failing to do so will cause needless economic hardship for millions of Americans, then any celebration you choose to have about the demise of cap and trade should be short and somewhat somber. This was an important first step in rolling back the extremist environmental agenda, but there is still an awful lot of work to be done. If conservatives and libertarians become complacent and foolishly conclude that the end of cap and trade means an end to attacks on America’s energy sector, they’d be making a huge mistake. If sanity is to be restored within the energy industry, the heavy lifting is still to come, because there are vast amounts of money involved.
Companies like GE and ADM, who have made huge investments in green energy markets, aren’t likely too worried about the demise of cap and trade. GE will still be selling plenty of windmills thanks to government subsidies, and requirements to blend ethanol into gasoline will keep ADM’s shareholders quite happy. Energy giants like Exxon-Mobil and Peabody have been made the villains in the energy/environmental debate, but in truth, big oil, coal and natural gas companies have been playing defense for years, while equally big corporations like GE and ADM quietly take advantage of environmental hysteria and cheer on draconian governmental laws and regulations. Those companies don’t need a trading program to continue raking in the big bucks. All they need is for us to continue down the track we’ve chosen. That’s what will make rolling back today’s radical agenda any further so difficult. It’s a two front war, with the Sierra Club and like-minded organizations on one side, and GE and other companies set up to cash in on the “green revolution” on the other.
Now, I don’t have any problem with GE, ADM or any big corporation making lots of money. I don’t even have a problem with a “green revolution,” provided that it actually makes economic sense. But everyone should question the wisdom of government effectively creating an artificial market to solve a phony problem that selectively benefits a privileged few. That plan doesn’t sound all that “green” at all. In fact, it sounds rather red.