An Economic Disaster

Carbon trading has a limited ability to mitigate global warming—objective (5). The Kyoto Protocol, even if it included the United States and nobody cheated, would barely slow the growth in global emissions, and have little or no detectable impact on global temperatures. Yet trillions of dollars would have to be spent to just to postpone the arrival of a 2.6°C warming by five years.

In view of this dismal cost-benefit ratio, and the fact that Canada, Japan, and most European countries are failing to meet their Kyoto targets (the comparative baby steps on the road to global emissions reduction), carbon trading would appear to have a limited ability to perpetuate itself as a long-term climate mitigation strategy—objective (6).

So what is carbon trading good for? Transferring wealth—objective (7). When energy prices go up, energy producers gain at the expense of consumers. Just ask OPEC! The Heritage Foundation estimates that, under the Lieberman-Warner legislation, the total energy bill of the average consumer in 2030 will be $8,870 higher than in 2012. CBO estimates that carbon permits under various congressional proposals could be worth $50 to $300 billion a year. How to divvy up the booty is what climate politics on Capitol Hill are mainly about.