Aussie Labor Party Prime Minister Julia Gillard is waging an aggressive PR campaign to sell carbon taxes in the Land Down Under. Resistance is fierce, with opposition leaders saying the tax “is so toxic that Labor MPs could dump her to save their own seats” (The Australian, June 3, 2011). [click to continue…]
carbon tax
To my knowledge, Colorado is the only state in which regulators allow utilities to incorporate a carbon tax into the economic models used to make resource acquisition decisions (see here and here). Ratepayers can’t see it in their monthly bill, but the tax is used in the models, and the models dictate spending. It’s the worst kind of virtual reality: The carbon tax leaps from computers to ratepayer wallets.
The Colorado Public Utilities Commission was authorized to allow for a carbon tax in 2008 with the passage of HB 1164 by the General Assembly. The legislation was advertised as an essential component of former Governor’s Bill Ritter’s environmentalist “New Energy Economy,” but, in practice, the carbon tax has served as an accounting loophole through which Xcel Energy, the largest investor-owned utility in the State, has awarded itself big time profits. In a previous post, I explained in some detail how Xcel uses the carbon tax. Here are a few examples:
- One of Xcel’s priorities is winning market share from independent power producers on the wholesale electricity market. Older natural gas plants are Xcel’s fiercest competitors, because they have already paid off their capital costs, so they can bid electricity prices relatively low. The $20/ton carbon tax eliminates this advantage, because new plants are more efficient than older plants. It tilts the playing field to Xcel’s favor.
The stunning victory by Stephen Harper’s Conservatives in Canada’s election means the death of cap-and-trade or a carbon tax in Canada. The Conservative Party’s platform firmly opposed both cap-and-trade and carbon taxes. The Liberal Party, which was annihilated in the election, equally strongly supported imposing a cap-and-trade scheme to reduce greenhouse gas emissions.
Conservatives won a clear majority of 167 seats in the 308-member federal Parliament. They had formed a minority government since 2007. For the first time in Canadian history, the Liberal Party dropped to third place with 34 seats. The hard left New Democratic Party (NDP) wiped out the Bloc Quebecois in Quebec and will become the official opposition with 102 seats. The NDP and the Bloc Quebecois also support cap-and-trade. The Green Party won its first seat in Parliament.
This is another clear sign that public support for cap-and-trade and other energy-rationing policies is waning. Cap-and-trade has been dead in the United States since the Waxman-Markey bill narrowly passed the House of Representatives on June 26, 2009. And in Australia, the Labour Party government is in deep trouble as a result of proposing a carbon tax. The global warming fad appears to be fading fast.
5. New Jersey Governor Chris Christie
Christie’s skepticism of global warming alarmism is great. What’s not so great is his continued participation in a regional cap-and-trade energy rationing scheme. For whatever reason, the climate skeptic sounding governor has yet to pull his state out of the Regional Greenhouse Gas Initiative, the aforementioned energy tax.
4. Florida Governor Charlie Crist (lame duck)
In 2007, Crist signed a series of environmentalist executive orders, which, thankfully, never came to fruition because they were spurned by the State Legislature. Crist earned his spot on this list for his invertebrate take on offshore drilling. When he campaigned for Governor, he opposed offshore drilling; when gas prices spiked in the summer of 2008, he supported drilling; and after the Gulf oil spill this past summer, he reverted back to opposing the practice.
3. California Governor Arnold Schwarzenegger (lame-duck)
As I’ve explained here, here, and here, the Governator’s environmentalist pandering is empty blathering. For all the talk about California going green, the fact of the matter is that California’s environmentalist energy policies have been ineffectual at achieving anything other than higher energy prices. Rather than environmentalist accomplishments, Schwarzenegger’s only lasting legacy will be the almost-unlimited power he has bequeathed to his successor, Governor-elect Jerry “Moonbeam” Brown. Starting in 2011, the law accords the Governor amorphous, yet absolute, authority to mitigate climate change.
2. New Mexico Governor Bill Richardson (lame duck)
Using authority derived from 1978 state law, New Mexico Governor Bill Richardson (D) last month imposed a cap-and-trade energy rationing scheme. The lame-duck Governor enacted the energy-rationing scheme administratively on November 2, the same day that voters indicated their displeasure with expensive energy climate policies by electing Susana Martinez (R) to succeed Richardson. She had campaigned against cap-and-trade. To be sure, Richardson’s energy policy is largely toothless; nonetheless, the executive power grab is disconcerting.
1. Colorado Governor Bill Ritter (lame duck)
It will take a generation for Coloradans to undo the harm inflicted by the Governor Bill Ritter’s much-ballyhooed “New Energy Economy.” At Ritter’s behest: the General Assembly changed the mission of state utilities from providing “least cost” electricity, to fighting climate change; the Public Utilities Commission allowed the nation’s first carbon tax; and Department of Public Health and Environment exaggerated the threat of federal air quality regulations in order to justify legislation that picks winners and losers in the electricity industry.
It is worth noting that the two biggest environmental scares of recent memory-global warming and the BP oil spill-both failed to sway voters on November 2. Quite the contrary, it was the ill-advised attempts to address them that sparked voter anger. The Waxman-Markey bill worried the electorate more than global warming itself (and quite rightly so), and contributed to the loss of more than two dozen of its supporters in the House of Representatives.
Similarly, the BP oil spill had virtually no adverse impact on pro-drilling politicians. If anything, it was Obama’s overreaction to the spill in the form of the drilling moratorium that proved highly unpopular in Louisiana and other impacted States. The moratorium didn’t cost any Congressional seats there only because both Democrats and Republicans strongly denounced it.
Richard Morrison and Marc Scribner welcome Energy Policy Analyst William Yeatman to Episode 92 of the LibertyWeek podcast in which we discuss the prospects for John Kerry and Joe Lieberman’s latest incarnation of cap and trade legislation.
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