‘Rent Seeking’ Green Corporations Would Benefit Most Under Cap-and-Trade

October 20, 2009 - 9:18 AM
By going "green," corporations are positioning themselves to benefit from an anticipated government-run cap-and-trade scheme.
In economics, “rent seeking” describes the process by which corporations, unions, trade groups, and individuals try to gain unfair advantages through politics and lobbying rather than through competitive trade in the free marketplace.
 
Going “Green” has proven to be one of the favorite ways by which corporations position themselves to benefit.
 
“Global warming” and the reduction of “greenhouse gas emissions,” primarily carbon dioxide from various forms of energy use, is the reason given for the hideous “cap-and-trade” legislation making its way through Congress. It will enrich some corporations that have rolled the dice on “renewable” energy (solar and wind) and, in particular, the utilities supporting its mandatory system of “carbon credits” to be traded among energy producers and users.
 
Business Week recently took note of the way global warming positions are dividing the business community. Apple became the fifth large member company to resign or reduce its role in the U.S. Chamber of Commerce because of the Chamber’s “aggressive opposition to climate change legislation.” Nike also resigned.
 
The Wall Street Journal reported that Al Gore is a member of the board of Apple and that Apple’s Chief Operating Officer, Tim Cook, “happens to sit on the board of Nike.” The Journal further noted that, “Both companies may figure they can afford a U.S. carbon tax because most of their manufacturing is done outside the U.S.”
 
This is a classic example of rent seeking, giving them an advantage over competitors whose manufacturing is U.S.-based in the event they (and the rest of us) have a carbon tax imposed on them.
 
Business Week reported that, under the leadership of Thomas J. Donahue, the Chamber “has moved sharply to oppose much of the legislation and many of the regulations and policies streaming out of the Obama administration and the Democratic Congress on health care, labor issues, and finance.” Good! The Chamber deserves support and praise for this.
 
But Business Week reporters, Theo Francis and John Carey, like so many of their colleagues continue to fall into the same trap of ignorance and inaccuracy, writing that “The Chamber vehemently opposes legislation now before Congress as well as moves by the Environmental Protection Agency to regulate harmful carbon emissions.” They are NOT harmful. They play no role whatever in the Earth’s climate.
 
That is a major reason the Chamber is opposing legislation and regulations based on the false science and claims about carbon emissions. Beyond that, the impact of such legislation and regulations would be to literally wreck the economy that is based on access to affordable and abundant energy.
 
A reading of the Waxman-Markey cap-and-trade bill reveals it is about much more than carbon credits. The Institute for Energy Research notes that half of the bill’s 1,428 pages conjure up the carbon credits scheme. The rest of the bill is packed with regulations that would completely alter the United States’ economy, the Institute notes.
 
Here’s just a sample:
 
It would mandate that utilities provide 20 percent of electricity from qualified renewables by 2020, up from 2.8 percent today. This means that solar and wind providers, now producing barely one percent of the nation’s electricity, would by virtue of legislation, gain the funding to be competitive. In a free market, they are virtually uncompetitive and heavily reliant on government subsidies just to exist.
 
Think you’re paying enough for electricity today? The Waxman-Markey bill would establish a new $1 billion annual tax on electricity from coal and natural gas-fired power plants. Coal generates just over half of all the electricity Americans use. Nuclear is responsible for about twenty percent with the rest coming from natural gas and hydroelectric power. The proposed tax just drives up the cost of energy for everyone.
 
It gets worse, if that’s possible: The Waxman-Markey bill would establish a new $30 billion revolving loan fund to subsidize wind turbines, solar energy, fuel cells, batteries, biomass equipment and other energy sources. Who is a major manufacturer of such items? General Electric. This bill is pure “rent seeking” by GE.
 
Gazing into their crystal ball, Waxman-Markey requires utilities to develop large-scale plans for electric vehicles and would increase the ceiling on loans to auto manufacturers to build electric cars. Can you say General Motors or Chrysler, both currently owned by the U.S. government instead of those who invested in them or made loans to them.
 
This vile legislation would even establish a “National Climate Adaptation Program” to empower federal zoning of land and oceans. Federal zoning! Not local zoning where decisions over land use is closest to the people most affected by them. Federal zoning as in the communist concept that the state owns all the land!
 
Make no mistake about it, while some corporations are polishing their Green image, the federal government—your government—is making plans to own every square inch of land in America. It’s not just unconstitutional. It is a move toward dictatorship.