It looks like the Obama's cap and trade initiative is a chip to be bartered away during the upcoming fight over the budget.
"The Obama administration says such a system would raise $646 million over 10 years while curtailing emissions of greenhouse gases such as carbon dioxide. Obama included the proposal in his 2010 budget bill but it's facing opposition from members of both parties."
Cap and Trade
What they are saying cap and trade does
1. raise govt tax revenue
2. Save the environment
What are they not saying
1. That cap and trade will become an inverse energy market. When oil goes up, carbon credits will go down. When oil goes down, carbon credits will go up. If you thought the spike in oil prices was a bad thing, just wait until carbon credits start being traded. speculators will be all over these, buying them up and holding off the market. they will short oil, then sell carbon credits, then short carbon credits and sell oil.
2. That cap and trade will be rife with the worst speculation and will rival the recent run up on commodity prices.
3. I suspect that the govt will maintain a system of umbrella carbon credits (think fed fund) that it could use to artificially inflate energy prices to make alternative energy more attractive to investors. So if the Wall street speculators weren't bad enough, the govt itself will be engaging in artifically increasing carbon credit market. Saving the environment sounds alright in theory but really cap and trade is going to have a real nasty impact on the economy and your wallets if they ever implement it. We regular people are going to have to basically pay twice for the energy that we use.
I understand that carbon credit trading is already in place in Europe. I wonder how its going over there?
"The Obama administration says such a system would raise $646 million over 10 years while curtailing emissions of greenhouse gases such as carbon dioxide. Obama included the proposal in his 2010 budget bill but it's facing opposition from members of both parties."
Cap and Trade
What they are saying cap and trade does
1. raise govt tax revenue
2. Save the environment
What are they not saying
1. That cap and trade will become an inverse energy market. When oil goes up, carbon credits will go down. When oil goes down, carbon credits will go up. If you thought the spike in oil prices was a bad thing, just wait until carbon credits start being traded. speculators will be all over these, buying them up and holding off the market. they will short oil, then sell carbon credits, then short carbon credits and sell oil.
2. That cap and trade will be rife with the worst speculation and will rival the recent run up on commodity prices.
3. I suspect that the govt will maintain a system of umbrella carbon credits (think fed fund) that it could use to artificially inflate energy prices to make alternative energy more attractive to investors. So if the Wall street speculators weren't bad enough, the govt itself will be engaging in artifically increasing carbon credit market. Saving the environment sounds alright in theory but really cap and trade is going to have a real nasty impact on the economy and your wallets if they ever implement it. We regular people are going to have to basically pay twice for the energy that we use.
I understand that carbon credit trading is already in place in Europe. I wonder how its going over there?