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"Cap and Trade" for Dummies

Let's say Company A creates forty million tons of the dreaded Cee-Owe-Two, which the EPA recently reclassified from "essential plant nutrient" to "fearsome greenhouse toxin."

Now let's say Company B creates *no* Cee-Owe-Two, other than that which is produced by the human beings in its employ during the normal process of *breathing.*

Congress now declares that any Cee-Owe-Two produced in excess of, let's say, twenty million tons is heinous and unforgiveable *unless* the offender purchases Carbon Offsets.

You need to disregard the fact that the company which *trades* in Carbon Offsets is owned by Al Gore, okay? It's immaterial. Really. Honest, it is. Total and complete irrelevancy. Got nothing to do with it. Merely a coincidence.

My @ss.

*ahem*

Sorry for the sidetrack.

To continue:

Company A purchases twenty million tons worth of Carbon Offsets (at $9 per ton) from the Carbon Offset Trader (TerraPass) to "offset" the excess tonnage it produces.

That accomplished, the Carbon Offset Trader goes to Company B (which produces *no* Cee-Owe-Two) and purchases the twenty million tons of Cee-Owe-Two which Company B *didn't* create for $2 per ton.

The net result is that Company A can continue to produce forty million tons of Cee-Owe-Two after paying $180 million bucks in extortion money to TerraPass, which in turn gives $40 million bucks to Company B for -- doing nothing.

Company A passes the increased cost of doing business along to the consumer, Company B just got a windfall (most of which will go to the IRS), and Al Gore's company just made $140 million bucks to broker a deal in which *nothing* was exchanged except money. But everybody now *feels* good about it. Except, of course, for Company A's customers.

Don't believe me? Ask the Germans -- their utility rates *doubled* the first year they tried Cap 'n' Trade several years back. Then redoubled.

Which is just one reason it's not really smart these days to brag to a German that you're a Green...

More Cappy-Tradey blood-pressure elevation available at Small Dead Animals.

25 Comments

"Company A passes the increased cost of doing business along to the consumer."

Not Necessarily true...the product would have to be vital like water, power or food. If not, Company A will move offshore to any other country and Company A employees will loose their jobs.

All the things Company A employees bought from Company B will be scaled way back because they're out of work...and Company B employees will loose jobs.

So much stuff will not be bought and sold due to so many plant closings, that taxes will not be generated to pay for all the government agencies created to monitor this grand experiment. None of those people will loose their jobs because they work for the government, so our debt will skyrocket.

And...93% of all CO2 is generated naturally. Look it up please, Find out the facts. For starters plants don't generate Oxygen at night...they generate CO2. Then there is decomposition from dead leaves and plants...more CO2....and many other sources not least of which is burping cows, so there goes our steaks but we're going to need milk.

I'm taking my supply of bottled water and my guns and moving to a red state and plant a vegetable garden. The mobs are going to get nasty.
 

   I'm stocking up on stuff, but I am waiting to see what happens in the 2010 elections. The one thing about "Cap & Trade" is it can be overturned by another congress.  It is also owned lock, stock and barrel by the Leftists.

   If it isn't overturned, then it's time to contemplate other responses.

  
 
The one thing about "Cap & Trade" is it can be overturned by another congress.

Which should prove interesting -- it'll certainly be a test of principles. Evidently, the original House version was stripped of all the pork before the Senate found it acceptable for its august contemplation. And, after a suitably circumspect time of contemplation, said Senate decided it had insufficient political advantage as it was written, and re-inserted the pork as "new language"....

 
AW1:  Not a .58 "alternative?"
 
Tim always believes in old solutions are the best solutions.
 

  heh,

     No need to collect any brass. All you need is some newsprint and cotton thread.  :)

     Also, it's a very "green" solution. No cleaning chemicals, just hot water, clean rags, and some sweet oil to wipe it down with afterwards.

     I wonder about the carbon-tax it will incur, however.......
 
" I'm stocking up on stuff, but I am waiting to see what happens in the 2010 elections. The one thing about "Cap & Trade" is it can be overturned by another congress. It is also owned lock, stock and barrel by the Leftists."

2 flaws:
1) you assume there will be elections and that IF they are held the outcome will matter one iota (it won't).
2) as soon as Obama signs Kyoto Cap and Trade will be part of the US constitution and cannot be overturned. International treaties are automatically eternal and part of the US constitution under the constitution.

Companies moving offshore will no doubt be covered by having foreign produced CO2 taxed in the US to importers and distributors (including the cost of transport of the goods to the US).
 
Sounds a bit like our carbon trading system proposed here.

Fishmugger is right.  Products and services prices won't alter much because prices are more determined by what customers will pay not costs.  The result will instead be a strong push to cost cut some other way, reduced profitablity and/or corporate collapses.  And where do those people go?  Why into new jobs created by the vibrant economy of course <koff>

I have not read the details of this cap and trade but if as described it will prove a serious distortion the the market.  A flat out tax would be better.

 
International treaties are automatically eternal and part of the US constitution under the constitution.

That didn't stop Jimmeh Cottuh from donating the Panama Canal Zone to the Panamanians -- who, in a burst of international good will, turned over operational authority to the Red Chinese.

A flat out tax would be better.

A demonstrated knowledge of Elementary Science -- even at an eighth grade level -- would be better. Unfortunately, that assumes the average Congresscritter has an IQ larger than my shoe size...
 
C'mon, Bill.  You just said a demonstrated knowledgeof Elementary Science would be better... 

Everybody knows that our elected officials are smart, most of 'em geniuses (just have to read their bios, exceptin' the Good Ol' Boys® who play the "Aw, shucks, I ain't so smart" schtick) and Know What's Best. Why else would we have elected them?  Heh.

You're not taking into account all the variables, needful if you are going to try to make a value-added attack on the subject that will actually affect the outcome...

You forgot the negative modifiers.  Practical IQ= IQ - Ego x Political Bubble Factor x Media Bubble Factor²     
 
Yeah, except subtracting *anything* from a typical pol's IQ will invariably result in an imaginary number.

Speaking of Good Ol' Boys, back in the '80s, I had a mush-mouth Sur'n bitterly-clinging-to-NASCAR bud with a Ph.D. in Astrophysics and four active patents to his credit who ran afoul of a Korean mountain at night. We had two ASWOTC instructors who *badly* underestimated him based solely on his speechification...
 

  BillT,

         Complacency is the one factor that exists outside of all other variables, including self-importance and letter extension post surname....  :)

         Personally, I consider such actions as flying into known mountains as proof of Darwin's Law.

         As to the rescinding or nullification of treaties being unconstitutional, when did the constitutionality of anything become a stumbling block for Congress or President?  The entire Cap & Trade program, TARP, and the "porkulous bill" are all blatantly unconstitutional, but no one seems to give a bucket of warm spit about that.



 
 
Personally, I consider such actions as flying into known mountains as proof of Darwin's Law.

I consider this one the result of bad luck. The weather slammed down on him while he was flying a medevac at night -- and that's killed more pilots than you'd believe in *level* terrain.

And this was *before* the use of NVGs became damn-near mandatory for night flight. There are units over here that just plain will not fly unless the ambient light is *just* right. And the terrain, except to the northeast, is *flat*...



 

 BillT,

   Roger that.  Weather can and will mess things up. I'm jaded a bit, having both lost people I knew due to such things as forgetting to note the highest terrain versus your flight level when IFR,  and also having to go in as part of a team to recover remains from accident sites. 

   respects,
 

I am forming a dummy corporation right now.
The Engineer said something about @ss gas...oh geez...just show up and let Gaia do the rest.

I want me a piece of that. How will AlGore know which companies aren't on the take?  I would serioulsy form a subsidiary or some type of holding company to get that money back.

 

 
Time to get in on the ground floor! After all the hemming and hawing over CO2 is past, it'll be time to start creating profit opportunities with the biggest contributor to 'climate change' that isn't spelled s-u-n. I'm talking water vapor. Do you sweat in the Oklahoma sun in summer? Does it evaporate? Well, if we get in on this early Joe & Jill Public will have to purchase evaporation credits to continue their current habits, and they'll have to purchase them from us! Woohoo! Send your dollar now...
 

unfortunately, Bill.,  most of the Germans here are still sound asleep concerning this.  And still voting for the Greens and new Left in now in larger numbers  :p  (which might be partially explained that by the fact that the SPD and the CDU are also pushing Kyoto and happy to see us joining them in this folly). 
A very few of them woke up and took notice when it was learned that after jacking the prices and rejacking the prices to pay for the cost of the "gutscheine" carbon certificates the Power companys hier in Deutschland (which are basically four regional monopolies with some State ownership) were getting almost all their gutscheine for free from the Government.  So passing on the cost of nothing to the consumer ought to be nothing, right?  Meanwhile most have gone back to sleep or are in a tizzy about how we have destroyed their wonderful economy.
About the only locals I can stomach talking politics with are my old neighbors who remember the War and the Cold War.  Most of the younger ones are beyond comprehension.
Sad that we are now going to follow their path in this scheme.
many thanks, I remain at your service,
Gene, a cashier-wight wandering about Patrick-Henry's Village


 

 
And the Germans voted for this AFTER they converted to Euros at 1 Mark :1Euro  when they agreed to 2 Marks :1 Euro?

Besides, instead of calling them Carbon Credits, or Gutschein, (good shine?) I vote we call them Pixie Points, which has the advantage of alliteration, or Monkey Points, which Eddie Murphy said was what they should call percentage points of the gross in a movie contract. I'd even support this last if it turned out we had to pay Murphy a percent for using a phrase he invented. 

I can only assume that Americans support these anti-scientific ideas because they think, "I don't produce any excess Carbon Dioxide (besides my breath, that is", so it won't hurt me if some people pay more for carbon." Just wait until their customers stop buying because of this added major expense.
The thing that really chaps my saddle is that the same people who are advocating selling Carbon Credits criticize the Catholic Church for allowing the sale of indulgences back in the 16th Century.
"Dear Pot, Yes, I am Black, signed Kettle"
 
Heh.  Gosh, thanks, Windy!  Up until this moment, I never would have guessed a discussion of Cap and Trade would bring the sale of Indulgences and the Reformation into the light and be relevant!
 
Yup. Eclectic *and* ecumenical -- that's us!

Bring up *eccentric* and I'll blab about where you *really* stashed that cask of Amontillado...
 
Ssssshhhh!  That's the good stuff. And it's been quiet back there for *weeks*!
 
"I heard today that in order to sell your house, you are going to have to have some government chump with a check list, to see that your house is up to EPA standards, window, appliances and so on...anything they don't like, they won't issue you the "permit" to sell your house, until it's fixed. This will be law as soon as Obama signs it, if the senate is stupid enough to pass this fiasco!!!! I haven't looked at it, but apparently it's in the bill!!!!"

Sent to my inbox.  Any truthiness to that statement?  As if the economy wasn't in a bind as it is.  What utter nonsense.
 
Cricket, nobody knows for sure what's in the bill -- not only has no one read the entire 1,000+ pages, but, because of last-minute additions and "new language," there are 300 pages of insertions that have yet to be made. The bottom line is, the bill in it's current form not only hasn't been read, but it's technically unreadable.

But they're voting on it anyway. Some wag could have inserted a paragraph mandating that all citizens of Chinese ancestry adopt a Papuan free-tailed fruit bat no later than July 31, 2010, and in 13 months, there'll be a mass incarceration of everybody named Lee -- because, yanno, they disobeyed the *law*...
 
But rest assured ....... Carol Browner has read "significant portions" of the bill.  LOL
 
Translation: She managed to wade through the cover sheet...