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Climatic change and especially the pertinent issue of global warming is one thing that has refused to go away. Many concerted efforts to combat climatic change have been implemented but nothing seems to offer a long lasting solution to this stalemate.
Nevertheless, Senator Lieberman’s bill that sought to implement the so-called ‘cap and trade’ program stands out clearly in the climate debate around the United States of America. Cap and trade approach would, “control pollution by providing economic incentives for achieving reductions in the emissions of pollutants” (Lieberman 5).
This would be achieved by issuing companies with credits for emission reduction; those who want to increase their emissions would purchase extra credits from those who emitting less. The “Cap and Trade” legislation was passed by the United States House of Representatives last year and now is being considered in the U.S. Senate. President Obama favors the legislation conceptually; he would like to sign a version of this legislation into law. Nevertheless, the negatives of this move outweigh the positives.
The Cons of this Legislation
As aforementioned, the cons of this legislation outweigh the pros. There are many issues surrounding the validity of such legislation both at national and international level. While global warming is a disaster in waiting if not addressed now, such legislation would create more disasters especially in the energy sector. Energy costs are already inflated and this move would worsen the situation. Economically, the United States of America would ‘sink’.
Due to the uncertainties surrounding the economic future of America if such a move is made, the American Council for Capital Formation (ACCF) ordered state-to-state assessment to establish how this move would affect America in general. The results were alarming and supporters of such legislation should look at it before making any ‘informed’ decision. The following results are from Texas alone.
Texas would lose “as many as 23,000 jobs in 2020 and nearly 50,000 jobs in 2030” (Thorning & Cebi Para. 1). Energy prices would increase with lower industrial output. Moreover, the cost of keeping the required emission standards would also be high adding another problem to already delicate industrial sector.
Many industries have not recovered fully from the recent financial meltdown and implementing such a move would practically cripple them economically. What supporters of this legislation are not factoring in is the fact that most international companies in other countries would not be affected by this move. This implies that they would have competitive advantage over their counterparts in the United States of America.
More imports from these international companies operating outside the United States of America would cripple many domestic companies. Consumers have a tendency of consuming ‘cheaper’ products and it is logical that ‘cheaper’ imports would find more consumption in the country.
Moreover, American exports would have few or no international markets because of expensive production costs. Consequently, more Americans would become jobless, poor, and desperate retirees. The already instable retirement benefits scheme would collapse in the wake of massive retirement of baby boomers. All these challenges seem insurmountable if President Obama goes ahead to sign a version of this legislation into law.
The report cited that, “Disposable household income in Texas would be reduced by as much as $2,500 per year in 2020 and up to $6,000 by 2030” (Thorning & Cebi Para. 2). The year 2030 is in very near future. Like the old adage, time will always fly and Americans will find themselves in 2030, with little or no disposable income. This means that middle class earners will not have extra money to save or invest.
Going back to the issue of impeding crisis in the retirement benefit scheme, strategists suggested employees to be encouraged to invest in personal businesses to counter any uncertainty in the retirement scheme. Ironically, the same employees will become jobless and penniless; how will they invest what they do not have. The Obama government is only fueling an impeding crisis and America would as well forget being the global economic giant.
Being economic giant is not a problem, remaining one is the problem. America is doomed to failure is stakeholders do not rise to the occasion and stop poor decision-making. It is all right to think about the future and conserve it as well; nevertheless, if the intended conservation measures are retrogressive to the current generation, then they are not worth implementation.
In 2009, studies at the Nicholas Institute for Environmental Policy Solutions at Duke University showed that “The price of gasoline in most states would increase between 74 percent and 144 percent in 2030. Electricity prices would increase by between 122 percent and 159 percent.
Residents would pay between 99 percent and 142 percent more for their natural gas by 2030” (Murray & Ross 10). This simply shouts that, life in the United States of America would be unbearable. Living costs would skyrocket as living standards take the opposite direction.
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Ironically, the money needed to cater for these skyrocketing living costs would not be available. People are losing jobs and remuneration packages would go down steadily meaning that even the working class would feel the pain. Electricity and gasoline are the main sources of energy across America and this increase is unprepared and uncalled for.
Going back to the report from Texas, “Texas’ 1,865 schools and universities and 134 hospitals will likely experience an increase of up to 35 percent in expenditures by 2020 and as much as 123 percent by 2030” (Thorning & Cebi Para. 6).
Education and health sectors would be in the front line in experiencing the pinch of this move. Extrapolating these figures to cover learning institutions and healthcare units across America, the problem becomes even graver. It would be logical to conclude that education for all would be forgotten and even the much-publicized healthcare reforms would be unachievable.
There has to be strategies to counter uncertainties that may arise on the way and the Obama administration is clearly missing in this crucial area. The government-spending budget is already stretched and more borrowing would be needed to finance some planned implementations thus plunging America into more national debts.
On another note, the ‘cap and trade’ proposition seems to address the wrong issues. Speaking before a House Energy and Commerce Committee panel, the president of the Industrial Energy Consumers of America (IECA), Paul Cicio noted that, “The industrial sector is not the problem.
In the U.S., the industrial sector’s (carbon) emissions have risen only 2.6 percent above 1990 levels while emissions from the residential sector are up 29 percent, commercial up 39 percent, transportation up 27 percent and electricity generation up 29 percent” (Martin Para. 6).
This is very revealing; actually, instead of tacking the industrial sector the authorities should rethink their strategies and confront the chief carbon emitters, viz. electricity generation, residential, transportation, and commercial sectors. These are some of the negative issues surrounding the signing of a new version of ‘cap and trade’ legislation into law.
Finally, looked from a critical point of view the ‘cap and trade’ legislation does not seek to reduce carbon emissions. It appears that this legislation is interested in fining heavy carbon emitters and if they can afford paying the fines, then they can continue emitting more carbon. If the authorities were interested in cutting down carbon emissions, why introduce this controversial legislation. A competent legislation would put standards and be happy that some companies emit less.
Pros of this Legislation
Every coin has two sides. Consequently, the ‘cap and trade’ stalemate has another side; the positive effects of the same. Adherents of this move claim that such legislation “is essential to applying the brakes on the frequency and intensity of a variety of deadly and costly weather-related disasters” (Martin Para. 9).
Surely, this legislation would deal with the impeding drought spells across Midwest farm states, floods, hurricanes and other pertinent issues like wildfires. Moreover, this legislation would, “cut carbon emissions to 14 percent below 2005 levels by 2020, and then to 83 percent below 2005 levels by 2050” (Beach Para. 12). This is plausible because as aforementioned, global warming is a disaster in waiting and if such a move would avert this disaster, then it might be welcome.
Studies indicate that climate change would have devastating effects in the near future; actually, some of the effects are being felts across America and around the world.
For instance, there has been massive destruction of infrastructure in Alaska due to permafrost melting in the recent past. There is set to be a wide array of waterborne diseases and “heat stress to air pollution and diseases transmitted by insects, ticks, and rodents, forcing costly public health initiatives to protect much of the U.S. population” (Martin Para. 16).
Based on these insights the ‘cap and trade’ proposition looks viable in averting these long-term effects. Climatic change will have negative impacts across the world and America should rise and implement mitigation measures early enough before the problem becomes uncontainable.
The ‘cap and trade’ legislation is one controversial issue that does not seem to have answers. With President Obama set to sign a version of this legislation into law, many issues remain unsolved and if implemented the way it is, this legislation would have more cons than the pros.
Different studies commissioned in the wake of this ‘cap and trade’ bill have shown that America would struggle economically if this legislation becomes a law. Economical well-being is the backbone of everything that goes on in society. If this legislation becomes a law, may Americans would become jobless and living standards would be high.
Living in America would be unbearable; how could people without healthy income cope with skyrocketing standards of living. Cost of industrial production would be high making American industries incompetent in the world arena. On the other hand, this legislation has positive effects.
If implemented, it would counter climatic changes and avert issues like floods and drought. Nevertheless, any move should be for the benefit of citizens. If the ‘cap and trade’ move would cripple America economically, then it is not worth becoming a law. The demerits of this legislation outweigh the demerits; therefore, ‘cap and trade’ should not become a law.
Beach, William. “The Economic Costs of the Lieberman-Warner Climate Change Legislation,” Heritage Center for Data Analysis, Heritage Center. 2008. Web.
Lieberman, Joseph. “Fighting Global Warming the Right Way.” Hartford Courant, 2007.
Martin, Tom. “Weighing the Pros and Cons of Cap and Trade.” 2009. Web.
Murray, Brian & Ross, Martin. “The Lieberman-Warner America’s Climate Security Act: A Preliminary Assessment of Potential Economic Impacts,” Nicholas Institute for Environmental Policy Solutions. Duke University. 2008. Web.
Thorning, Margo & Cebi, Pinar. “The Texas Economy: How Would Climate Change Legislation Impact Economic Growth and Jobs? American Council for Capital Formation; Texas Public Policy Foundation. 2010. Web.