energy tax

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The British Conservative Party seems intent on fulfilling Prime Minister David Cameron’s promise to be the “greenest government ever.” This week, the coalition government announced it would cut emissions 50 percent, averaged over the years 2023-2027, by 2025. The government conceded that the policy would cost British homes about $700 a year, or 1 percent of Britain’s GDP, which is almost certainly a lowball. There is, however, an escape clause: The targets are binding only if the rest of the European Union commits to the same emissions cuts. Even if the EU were to adopt similar targets, it would not be terribly surprising if a future government suspended or rescinded this ultra-expensive “Green Deal,” as recent polling suggests that only a quarter of Britons believe that the risks of climate change are greater than the benefits.

Reconciling the various, final pre-election surveys of voter sentiment indicates a that “it’s the spending, stupid.” It is remarkable how quickly public consciousness has developed to know that debt equals taxes.

Cap-and-trade is now dead, having proven, as we predicted serially, to be the 1993 BTU tax, redux. Members in the House voted on both measures on the assurance the Senate would not leave them hanging out to dry, isolated with that difficult vote, only to see their trust misplaced. As opposition grew more intense from the people-who were not at the table when their wealth was redistributed to various interests-the senators realized that they wanted to save jobs. Theirs.

We also see that cap-and-trade’s ugly Plan B cousin, “green jobs,” is not only sure to be an obsession very soon. The public will equally soon come to understand the bankrupting expense of “green jobs” programs: in President Obama’s erstwhile model, Spain, it cost them $750,000 per (temporary) “green job,” placing the nation’s energy infrastructure and economy in peril leading to an ongoing political crisis.

All over Europe Obama’s previously touted model states are struggling to rein in the subsidy schemes which threatened to expand the Greek contagion. These are economic black holes paying small fortunes for each job created, crowding out private sector growth, displacing real jobs responding to market forces with temporary jobs that disappear when the subsidy does, as it must (see: “census jobs”). All the while they necessitate higher energy costs as part of the plan. That makes them much worse than other make-work programs like ditch-digging-and-filling.

Still, just last week Obama’s Energy Department claimed in the Washington Post that its own stimulus version of the scheme was an “unqualified success”-at a half a million dollars per temporary job created! Moreover, all parties acknowledged in the article that the bubble has to be renewed annually or it bursts. Somehow this disastrous failure proved to the Obama administration that “clean-energy investments [sic] are ready for prime time.” Oh, dear.

The coming, attempted ‘green jobs’ binge is no more than WPA-style spending, which FDR confidantes admitted as a flop, and the debt to underwrite which delays the recovery further, just as the public seems to recognize the Obama agenda has already done.

There is the coming “energy” debate in a nutshell, and how, in a rational world, it will play out. Fortunately, ‘green shoots’ of rationality do seem to be popping up. The public realize “it’s the spending, stupid” and grasp the illusory nature of economic activity predicated on such “stimulus”-style debt-spending.

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.

The Spin Zone

by Ryan Lynch on April 20, 2010

in Blog, videos

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