The 2009 American Clean Energy and Security Act (Cap and Trade)
1. Provide an overview of the legislation. Include the key legislative goals and points.
2. Is this truly a market-based approach for emissions clean-up?
3. Evaluate the bill. Will it work?
4. What changes would you make to the bill, if any?
5. What are the consequences of this bill?
6. Find three groups/organizations/foundations lining up to support or oppose the bill. Do these groups have a bias or a financial incentive to support/oppose the bill?Task: After you completely and thoroughly address the above points you will write a letter to our Congressman (Todd Platts) urging him to read and address your point of view. This is to be an economic argument rather than a philosophical/ideological one. I realize that it is impossible to divorce ideology from economics, but use your best judgement. I will not be reading these (unless you want me to). I will provide you with an envelope. You will return this envelope to me sealed and addressed to Representative Platts. We will stamp these in class and mail them out. [...]
Hmm, I guess I had better start by reading the bill:
Committee on Energy and Commerce
American Clean Energy and Security Act of 2009 Discussion Draft Full Text
American Clean Energy and Security Act of 2009 Discussion Draft Summary
American Clean Energy and Security Act of 2009 Discussion Draft Section by Section Summary
Well, after much scrutinizing of this bill I think I am ready to begin answering the questions.
1. The intent of the American Clean Energy and Security Act of 2009 is to create jobs which will remain in the United States, thus minimizing the risk of outsourcing; lessen our dependance upon foreign sources of oil and create more of a dependance on products and services that can be provided within our borders; and to alleviate any risk of global warming (I say risk due to the controversy surrounding the topic of global warming at the moment). The legislation contains four titles to go about achieving these goals:
(1) A clean energy title that promotes renewable sources of energy, carbon capture and sequestration technologies, low-carbon fuels, clean electric vehicles, and the smart grid and electricity transmission;
(2) An energy efficiency title that increases energy efficiency across all sectors of the economy, including buildings, appliances, transportation, and industry;
(3) A global warming title that places limits on emissions of heat-trapping pollutants; and
(4) A transitioning title that protects U.S. consumers and industry and promotes green jobs during the transition to a clean energy economy.
2. Personally, I feel as though this could have been a strictly market-based approach, but now that the government has control I think we will see the results of this bill become more of a market socialist-based approach for emissions clean-up. Market socialism is an “economic system representing a compromise between socialist planning and free enterprise, in which enterprises are publicly owned but production and consumption are guided by market forces rather than by government planning.“
Source:
“market socialism.” Encyclopædia Britannica. 2009. Encyclopædia Britannica Online. 04 Dec. 2009 .
3. Of all the reading I have done, the general consensus is that this bill will “eventually” work. I have to say eventually because I do not believe that we will feel the effects right away as most individuals would like to see. A lot of complaints I hear regarding legislation such as the stimulus package are that the effects just are not being felt yet. And I believe part of the problem is that we, as Americans, are generally impatient. We want to be able to see something happen right away with such a large portion of our tax dollars being spent upon passage of these bills. However, it is simply not a reality. Personally, I feel pretty satisifed with what I have studied thus far. Of course, we must all remember that this is a bill being designed by our government so of course it is not going to appear like it was written by a group of intelligent individuals.
4. I really like the idea of a credit system, but it just seems like greed is going to find itself a new target. I mean, can we really trust that these companies will act honestly whether buying or selling these credits? I think that the past has shown us that that answer is a resounding NO. The concept makes perfect economic sense, though:
The trade: It will be relatively cheaper or easier for some companies to reduce their emissions below their required limit than others. These more efficient companies, who emit less than their allowance, can sell their extra permits to companies that are not able to make reductions as easily. This creates a system that guarantees a set level of overall reductions, while rewarding the most efficient companies and ensuring that the cap can be met at the lowest possible cost to the economy.
Source: Cap and Trade 101
5. The biggest consequence that I am able to see is that we have let this problem go on for so long that now our government must step in to lend a hand. We should have never let it get to this point. I do not know if it was laziness, a lack of funds, or a lack of interest that kept us from developing more efficient forms of energy but now we’re stuck with the government’s idea of “green”. Of course, many Republicans and Democrats alike have stepped up in opposition to this bill, but I must ask this question: Where were you a few years ago when the idea of “going green” first started?
6. Many groups have stood up in support and opposition to this bill. A recent voice in strong opposition to this bill is the No-Cap-And-Trade Coalition. Their opposition is due in part to their concern “about the devastating impact a cap-and-trade scheme could have on American families and the faltering US economy.” Businesses that are in support of this bill include Avista Corp. and Gap Inc., both of which have been prominent clean energy providers. These companies have a strong reason to support the legislation because they will be the ones with the most to gain when credits are handed out. Since they are already participating in clean energy, they will most likely have many leftover credits which they can then sell to make additional profit.
[more to follow; continue to check back]
