Quick Commentary on Cap and Trade

Wednesday, March 4, 2009

I have a lot to say, so I'm going to try and be brief in the next few posts and focus on a few developments. I'd really like to dedicate an article to each and give them fair and thorough treatment, but at the rate the government is preceding my points would be moot by the time I had a chance to write about them.

Geithner gave details on some of Obama’s economic policies today. In discussing taxes and or costs that would be increasing, he mentioned that a cap and trade system that would be implemented on carbon polluters. He stated that people’s energy bills would be affected as coal power plants are responsible for a large amount of carbon pollution. Quote Geithner, "Now, if people don't change how they use energy, then they will face higher costs for energy.” Now don’t get me wrong, I’m actually for clean energy. However, Obama has tied our hands on this one. Nuclear energy does not produce carbon and is the most efficient energy developed. Coupled with electric cars, a power grid fueled by nuclear energy could easily end oil dependence and carbon pollution. So why doesn’t Obama take it seriously? I can’t figure it out. As far as Geithner’s comments go, most of the energy I use (and I do use a lot) is over the winter to heat my home. I’m sorry, but I need the heat to live, my habits do not have the ability to change and therefore my middle class income will be taking a serious hit. Thanks for standing up for the little guy Obama team.

I feel it is a big mistake for Obama to rule out nuclear energy when it is the most promising solution. With nuclear energy, we may not even need to resort to cap and trade, or may reduce the negative effects of implementing cap and trade. However, I strongly believe that Obama has ruled out expanding nuclear energy, because he wants the tax revenue by imposing carbon restrictions that cannot be realistically achieved. What are your thoughts?


The Law said...

I don't think your closing sentence is Obama's style. The problem is not the fact that these plants produce carbon, as much as it is the corners these companies cut at the environment's expense in order to save money. By modernizing their factories, they would not be subject to cap and trade penalties. The move is forcing companies to modernize their equipment.

A great example is with FedEx... Their HQ is run by their own array of solar panels. They got rid of the smoke stacks and made improvements that up fron were costly, but in the end saved them lots of money, and keeps the eart clean. I believe GE has a system like this as well. Companies don't have to build their own solar array, but employ more efficient energy and waste standards, and there will be no penalty and the earth will have a smile on her face.

Re: noocular energy =)

I dont like it, and never have liked it. It may be very "safe" until it's not... then we have a different can of worms on our hands (and maybe I just watch too much 24). The other problem is uranium is of limited supply, and nuclear energy has a very very long half-life... we will have to use a considerable amount of energy to store nuclear waste. I personally think the way to go is completely renewable energy... solar, hyrdo, geo-theremal, etc.

My friend has a great green tech blog you should check out... we were talking about various green energies at his apt. last week. and he has helped me draw soem initial conclusions. my research on the topic is incomplete, but in 4 weeks time, i should be able to make a strogn argument... perhaps even for nuclear! my $0.02 for now =)

March 4, 2009 at 10:20 PM

Thanks Law. It's certainly a topic I need to look into more. However, I'm speaking specifically about power plants and not other companies, because they can't just put solar panels on their roofs and still supply their customers. I was being a little selfish in this regard, because cap and trade for power companies will raise homeowners and renters energy bills. It's a tax to us, not the company.

The truth is, nuclear power plants do create toxic waste, but not a large volume of waste. We could put all of the nuclear waste ever created since the inception of the nuclear power plant in the same ditch (I once had the exact size of the ditch, but I believe it was little more than a football field). I understand uranium is in short supply, but why not spend money investing in more efficient enrichment process. Also, it is possible to reuse nuclear waste, it's just that we don't. Finally, we do have the ability to create uranium from other substances.

I admit, I do need to look into things a little more. However, Obama and the rest of the country (myself included), really needs to stop and get serious with the options before we start taxing people needlessly. I say this because solar and wind power are not viable solutions for supplying our power needs. They simply are not efficient enough, have enough BTUs, nor are simply able to construct the massive number of farms needed to make a significant impact.

I'm not a fan of cap and trade as a solution as a whole. However, it doesn't seem as though implementing it on power companies is going to do anything more than pick the pockets of their customers. If that is the programs outcome, it's certainly unfair to the customers who have no ability to hurry the building and development of green energy.

You may set me straight on this one, but please think about it first. Power companies are monopolies, I can't go anywhere else for my power. My only other option is to reduce my usage, but I'm very familiar with my bills and my usage is almost entirely for my heat. Where are my options?

March 5, 2009 at 12:09 AM
The Law said...

***That's my friends blog... he has done quite a bit more reserach on the topic, it may help to support or challenge you stance on these types of issues. But either way, its a great read!***

Having a music studio in my apartment drives up our electric bill considerably... in Calirfornia, it is a bit cheaper than NY... a heavy month is only about $55. Since money is tight however, I had to make some adjustments around the house... When I built my computer, I designed it to be to be energy star compliant (as are most store bought PCs and all macs). I just never utitlized the features. So by modifying the power consumption on the computer, using natural light whenever possible, using the 5 Watt flourecent bulbs, and turning off electronics I dont use, the electric bill dropped from $55 to $29 a month. It takes some discipline to do things like this, but this is the exact kind of shared responsibility Obama has been talking about for the past two years. (like when he was teased for talking about checking your tire pressure to increase fuel efficiecy which it does for my gas guzzler lol)

I know LIPA (long Island Power Authority) and SoCal Edison can't put solar panels in their buildings and affect its power grid, but their buildings and their power grid is definitely not running at peak efficiency. In my case, I had to buy the more expensive bulbs, and become more dsiciplined in my approach to energy usage. But the money i saved on subsequent bills has already made up the difference.

Likewise, the initial costs of a more energy efficient system may be great, but a more efficient system saves money in the long term for sure. If a power company wants to keep putting heavy amounts of carbon into the air and not look into modernizing their systems, heck yea they should pay a fine! Perhaps my view is also biased, since I live in a very eco-conscious state, and it is demanded by the citzens here that Califronia find ways to do things in an eco-friendly way. We need to be a leader in the world for energy conservation and efficiency, as global warming is a real danger. No one will ever do it until they are forced to. Yes your bill may rise for a short time, but it will in time be significantly lower. And if we make attempts to change the way we approach energy usage at home, then we are doing our part to help the world too.

In the end, the main resistance is not about the bills and the policies. This is a throwaback to the civil war... this is a complete change of social ideology - how fitting that Obama is often compared to Lincoln. We have been living excessively and far beyond our means withotu thinking of the consequences for far too long. Reversing course however is a task easier said than done.

March 5, 2009 at 12:38 AM

I will certainly check out the blog. I am all for the grid running more efficiently as well. The trouble is that cap and trade is not going to change the grid. Power companies are monopolies and as such, all costs go to the customer. We are going to pay dearly for them to do nothing(only slightly concerned for this one).

I am going to need to patronize you a little in that California is not in the tundra I live in. Plus, renters don't always foot the bill for their heat. You may be surprised to know that in the summer I power my whole house for the same amount as your bill, $30-$50. What gets me is that it costs me 10 times as much in the winter for heat ($400-$500). I've been working on improving the efficiency and weatherizing my house, but it's expensive. I simply can't afford to do it all at once and will have less money to do so once they start raising my bill. I don't have a problem doing the little things to help, but cutting my energy bill is a serious investment that I will not recoup as quickly as you were able to do so. This is the state most people fall into I'm afraid.

Whenever you do something, you need to think of the unintended consequences. I am not a company, I cannot simply get a revolving line of credit at the bank. There is a 10% tax break, but that's only $100 for every $1000 (better than nothing, but not a real help as far as coming up with the money to pay for changes). Right now, the cheapest and easiest solution is to install a fireplace or two, which is the exact opposite consequence than what was intended.

The truth is they have cap and trade in Europe and not one of the countries that uses it is anywhere near kyoto protocol. It has done nothing but drained companies and citizens of money. Many global warming advocates actually argue against it. It’s a failed policy from another country. We'll certainly have to touch on this again. However, I will say with the economy as it is, I think it is irresponsible for the government to go looking to raise my energy bill.

March 5, 2009 at 6:12 AM

Hey Law, I decided I needed to start looking into the the energy problem a little more. I found a report that I'm posting the link below. They are estimating an 80 year supply of uranium alone. I think it would be wise to look into nuclear in the short run as a way to allow other energies time to catch up to our needs.


March 5, 2009 at 1:27 PM
The Law said...

I hear ya man... I'm glad to not be in the tundra anymore (though it is a necessary trip to be in the cold and snow for christmas!) But you raise a very strong argument here... I will do some more research into to it based off your findings, and see what I come up with.

March 5, 2009 at 6:20 PM

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