Retired American Press editor Jim Beam has covered politics and people for more than 40 years.

He is the author of Positively Beaming a hardbound collection of favorite columns.

Just what is cap-and-trade?

Posted November 5, 2009 at 7:36 am
Filed Under By Jim Beam | 1 Comment

“Did you know that the cap-and-trade bill that passed the U.S. House will require you to get an environmental inspection before you could sell your home?”

An acquaintance asked me that question this week during an exercise session. I had to plead ignorance on that one, but I promised him I would check it out. I did, and he’s right.

The U.S. Senate still has to approve the legislation for it to become federal law. If it does, I would have to get my home inspected, have any defects repaired and then have a follow-up inspection before I could sell it.

Exactly what is this cap-and-trade issue we have been hearing so much about? I had an inkling of what it is, but I did some research to get a better handle on the subject.

Cap-and-trade is a method being proposed to regulate the amount of pollution released into the atmosphere. It is considered a means of reversing global warming and climate change.

The federal government wants to set a cap on the amount of pollutants companies or others could release into the air. Then it would issue credits that allow companies to pollute a certain amount as long as it falls below the set cap.

Trade comes into the picture when companies that can reduce pollution easier than others are allowed to sell their credit permits to those that can’t.

House moves first

A cap-and-trade bill passed the U.S. House of Representatives on June 26 by a narrow margin — 219 to 212. Its chief sponsors are U.S. Reps. Henry Waxman, D-Calif., and Edward Markey, D-Mass.

A U.S. Senate committee held its first hearing on cap-and-trade legislation on Oct. 27, but it won’t move as quickly as the House version.

Sen. Barbara Boxer, D-Calif., a co-author of the Senate bill, said it’s the best climate-change legislation to get the job done, according to a report in The Dallas Morning News.

You can understand why oil and gas companies that dominate the economies of states like Texas and Louisiana are concerned about cap-and-trade. All states that are producers of coal, steel and gasoline are also affected.

The Morning News talked about a recent Congressional Budget Office analysis that said cap-and-trade would result in lower economic output over the life of the legislation. That would translate to high employment losses and not enough green jobs would be created to replace those losses.

OK, you can see why companies that rely on fossil fuels are skeptical about cap-and-trade legislation. Employees of those companies are also worried about losing their jobs. But what about average Americans?

That is where homeowners come into the picture. Ryan Young, a fellow in regulatory studies at the Competitive Enterprise Institute in Washington, talked about inspections that would be required of those Americans who want to sell their homes. Young’s story appeared on Politico.com.

“Inspections are not free,” he said. “Nor is fixing inevitable violations. Compliance with new energy-efficiency standards would make homes, especially older ones, more expensive. Selling one’s home would become even harder than it already is in this down market if Waxman-Markey-style cap-and-trade becomes law.

Young said it would mark the end of “fixer-upper homes,” those purchased by buyers who want to upgrade the houses themselves. Home sales would also decline, he said.

“If you don’t sell your home, then you don’t have to run the inspection gantlet,” Young said. “If you’re going to move, why not just rent out your old home instead of selling it?”

Young said there are also problems with the other 396 new regulations and 1,100 mandates in the House version of cap-and-trade.

“ … Social engineering schemes never work quite like they’re supposed to,” he said. “Better for Congress to stay out of our homes.”

It should be pointed out that not all companies oppose cap-and-trade. Business Week magazine talked about companies like General Electric, Shell and New Orleans-based Entergy that support the effort.

“Many in industry have come to believe that, given what science is learning, the costs of inaction are far greater than the price tag of the legislation,” the magazine said in a June 26 report.

What about others?

There is another side to this picture, of course.

China and India are major polluters of the environment, and Business Week said there will be no solution to the global climate problem unless both countries agree to cut their own greenhouse gas emissions. However, their leaders said they won’t come on board until the United States makes a serious effort to curb its emissions.

You can see how this amounts to a “who’s going first” situation.

We can’t continue to ignore damage to our environment. However, cap-and-trade is another emotional issue coming awfully close on the heels of efforts to reform the nation’s health care system.

Some citizens feel swamped by more proposed and drastic changes in their everyday lives than they can handle at one time. Others believe we have already waited too long to take corrective action.

The proposed home inspection system caught me off guard. I’m also wondering about those other 1,496 regulations and mandates in the cap-and-trade bill that passed the House.

You can see why many Americans find the current situation unsettling.

Comments

One Response to “Just what is cap-and-trade?”

Brian A. on November 5th, 2009 8:37 am

If you look at Europe, where they have already implemented cap and trade, it will not work. Emissions have not been reduced and taxes have increased. This legislation is not what we need for America. Write your congressmen at http://tiny.cc/yrlfH and voice opposition to cap and trade.

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