Trading views
(In response to Andrew Hedlund's column "Cap and trade: the conservative solution.")
Cap-and-trade policies are the result of people who do not understand economics.
You claim to allow the invisible hand to guide the free market, setting voucher prices as the market can bear. However, there can be no influence of free market principles in a market that has been entirely created by the state. If this were a free market solution, there would be a naturally occurring market for carbon vouchers, and there is not. It is a complete fabrication, and the lie should be obvious from there.
Why do we “need” a cap-and-trade system? This is an attempt to address what economists call externalities, which comes from a portion of the cost of production not reflected in the market price. For example, as the carbon issue goes, manufacturing of commercial goods can place millions of tons of carbon dioxide into the atmosphere each year. This is purported to result in a trend of warming around the globe, which negatively impacts poor and indigenous peoples more than “developed” countries. In this example, the cost of your iPhone does not reflect the total cost of production. The poor, indigenous family does not benefit from your iPhone, but the change in global weather patterns costs them economically in the form of lower crop production. You have, in essence, externalized the cost of your iPhone to poor, indigenous families.
Cap-and-trade solutions attempt to make the market price of your iPhone reflect the full production cost. We tax polluters, making them buy vouchers to compensate for their carbon output. This increases the cost of production, and you now bear the full burden of the cost of your iPhone. It seems like such a simple solution, but it is so fundamentally flawed. First of all, what of the poor, indigenous family who is negatively affected by your pollution?
The manufacturer paid for the voucher and put the carbon dioxide into the air. The net carbon output has not been reduced.
As American companies are increasingly regulated, they continue to export production facilities to regions on the globe where manufacturing costs are lower. That places the polluting smokestacks right in the back yard of the poor, indigenous family that our policy is supposed to be helping. Cap-and-trade is simply a tool for Americans to export pollution to third-world countries while lining the pockets of politicians and their corrupt business partners, all under the perverted title of capitalism and the free market.
Thomas Bogle Reader
