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Wednesday, July 7, 2010

Help Business: Pass Carbon Caps Now!

Yesterday I mentioned Rebecca Terk's cogent explanation of how clear regulation of homemade food helps micro-business by making the marketplace predictable for home-based entrepreneurs. I drew a parenthetical analogy with the passage of energy security legislation: get the Senate off its duff to set clear national policy for renewable energy and the cost of carbon emission, and industry will finally know where to invest in long-term energy plans.

Then David Leonhardt makes exactly the same point in his NYT essay on how Congress can boost growth and stave off the dreaded double-dip recession. He notes that health insurance reform and financial reform are already helping businesses make decisions.

One big piece of uncertainty remains, though: energy. Several energy chief executives have said they have major projects ready to go, if only they knew what was going to happen to the cost of emitting carbon. The same is no doubt true of nonenergy companies trying to make decisions about new buildings and factories.

The Senate still has a small window to pass an energy bill this summer. A good bill would include a cap on power plant emissions, making clear how much more expensive those emissions would become. Such a bill wouldn’t help only the climate, as Jim Rogers of Duke Energy says. It would be a form of stimulus, too [David Leonhardt, "5 Ways Congress Can Bolster Growth," New York Times, 2010.07.06].

As I've said, and as my friends at Repower America have said, let's finish the job on energy security legislation so the marketplace can get to work. Senator Tim Johnson knows energy security legislation will be good for South Dakota—he said so at the Heartland open house yesterday (I'll buy an ice cream cone for the first person who can send me a photo of Russell Olson applauding those lines!). Unfortunately, Johnson also said cap and trade won't pass the Senate—nertz! Time to swing the big stick, Senator Johnson, get your colleagues on board, and pass some energy legislation to help the environment and the economy!

Related: Senator Johnson told the nice people at the Heartland shindig yesterday that energy security legislation will promote the production of low-cost electricity. Matt McGovern of Repower America agrees: he tells KJAM that reports of the impending demise of your pocketbook due to green energy are greatly exaggerated... by the oil industry and corporate interests determined to squeeze every dollar they can from an outdated, unsustainable energy business model.

Also Related: The Obama Administration is following through on a campaign promise to clean up the air in the eastern U.S. Per direction of the courts, the EPA is issuing a revamped version of the Clean Air Interstate Rule (originally proposed by that crazy socialist greenie and destroyer of the economy President George W. Bush) to require coal-fired plants east of the Mississippi to drastically reduce sulfur dioxide and nitrogen oxide emissions by 2014. The plan includes pollution credit trading.


  1. We could do incredibly well as a region if we invest into the future of wind energy. I realize that wind turbines, like everything else, has its flaws, be it design, transmission, sustainability, etc.

    Actually, I think it would great if these turbines broke down every other day, really, think about the repairs, the resultung innovations, the constant stream of investment and development, happening here, in SoDak.

    I recall these awkward bagged transportable telephones with poor reception and no real features, whatever happened to those, didn't they develop into something, social revolution perhaps...

    Go ahead, pass some heavy-handed, big brother stuff, we'll be better for it, business always does better when it's challenged to develop, and that leaves a huge opportunity for those willing to step-up.

  2. The key is storing energy. Coal and oil are always on....wind and solar, not so much.

  3. Cory,

    Promote this if you want on some other rationale but to buy into the lie it will promote growth only belies that liberals do not understand entrepreneurs, economics and business.

  4. Just a thought I want to throw out here. What if instead of caps we just straight up taxed carbon used in any part of a manufacturing process?

    I think the major concern here is that US industries would lose competitiveness because of our strict environmental regulation. What if we applied a carbon tax to imported as well as locally imported goods? Tax them based on how much carbon they used during production/transportation/etc.

    This would increase the cost of imported goods and since our main competitors use mostly coal for energy it would place a heavier burden on them than our own local industries. Even over time as the amount of carbon necessary to make a product fell, the carbon used to transport goods from other countries would stay ensuring US competitiveness.

    Steve- What do you think? Is this a fair enough compromise? Would it ensure our local industry's competitiveness?

  5. Chris (E. of E.) says:

    Go ahead, pass some heavy-handed, big brother stuff, we'll be better for it, business always does better when it's challenged to develop, and that leaves a huge opportunity for those willing to step-up.

    I can agree with that on one condition: Some carrots come along with the sticks.

    One might argue that it's better for the "energy glutton" (that's us) to "go on a diet" now than to "keel over from a heart attack" later.

    The free market, all by itself, will likely resolve this issue, but the agony might come much later and with much greater force than it would under the tutelage of "Big Brother" (or, maybe someday, "Big Sister," and let the reader understand).

    The devil resides in the details, as always. We must not allow crony capitalists to seize the helm. The GOP, while known for that particular talent, holds no monopoly on it.

  6. I think "heavy-handed big brother stuff" overstates what we need. Nonetheless, Stan, I'd rather we take action now and require energy users to pay a higher price for the carbon they emit and the energy options they take away from future generations. Conserve now, extend the lifetime of the energy portfolio, push development of alternatives. You make an important point: waiting for the market to reach the critical mass of action will make the inevitable agony of the transition much more acute.


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