EDITORIAL: California’s ‘cap-and-trade’ escapade

OPINION:

The fact that the lame-duck Congress balked at endorsing “cap-and-trade” legislation didn’t deter California from approving its own version of the extreme green scheme for restricting industrial emissions. The move bolsters the state’s reputation as the left coast’s home for ideas out of left field. Soon Americans will witness what happens when global-warming hysteria worsens an already sick economy.

California’s Air Resources Board approved a cap-and-trade system on Dec. 16 that covers 360 businesses at 600 locations statewide. In its first phase, starting in 2012, electric utilities and other large manufacturers will receive free permits allowing emissions at their current levels. In the second phase, taking effect in 2015, refiners and distributors of gasoline, diesel, natural gas and other fuels will be required to buy emissions permits at auctions or purchase them from other companies. Gradually, the state will reduce the number of permits available, making them more expensive. To avoid exceeding their emissions limits, companies will be forced to develop dubious new methods of doing business.

Two inconvenient truths are getting in the way of the liberals’ energy-free utopia. First, cap-and-trade is a solution in need of a problem; it’s intended to remedy global warming while the earth is getting cooler. Second, the scheme is transparently a means of wealth redistribution that allows the political class to punish producers and reward the unsuccessful - a sure recipe for social dysfunction.

Global warming was recently rebranded as “climate disruption” to downplay the dearth of evidence correlating purportedly rising temperatures and increases in industrial emissions. In the West, California residents of the Sierras can be excused for joining the ranks of skeptics as they are buried beneath snow measured in yards rather than inches. In the East, Americans as far south as normally balmy Georgia have been shoveling the white stuff. Countless anecdotes back up global temperature readings that reveal a distinct cooling trend since 1998.

Even environmentalists in surfer land admit the economic impact of cap-and-trade is uncertain. The estimated cost of permits purchased by California businesses ranges between $3 billion and $58 billion by 2020. Job “leakage” predictably will result when any new green jobs are offset by existing jobs disappearing as businesses flee the state to escape onerous climate regulations. Enterprises that stay put will incur higher business costs, which will be passed along to consumers, making life in California more expensive than it already is.

Ultimately, families - rich and poor alike - will pay that bill in the form of higher prices at the cash register. Accordingly, the Air Resources Board authorized the creation of a Community Benefits Fund to funnel money back into impoverished communities, or as President Obama would say, “spread the wealth around.” This policy reflects classic liberal dogma that encourages dependency rather than independence, all while undermining the American way.

The limping global economy has many nations reconsidering bureaucratic fads concocted when times were good and economic growth allowed for expensive social experiments. Times have changed. With U.S. unemployment around 10 percent and rising, it’s time for America’s anti-growth ideas to melt away.