On Jan. 1, [California] will become the first state in the nation to charge industries across the economy for the greenhouse gases they emit. Under the system, known as “cap and trade,” the state will set an overall ceiling on those emissions and assign allowable emission amounts for individual polluters. A portion of these so-called allowances will be allocated to utilities, manufacturers and others; the remainder will be auctioned off.
[...]
The outsize goals of California’s new law, known as A.B. 32, are to lower California’s emissions to what they were in 1990 by 2020 — a reduction of roughly 30 percent — and, more broadly, to show that the system works and can be replicated.
The risks for California are enormous. Opponents and supporters alike worry that the program could hurt the state’s fragile economy by driving out refineries, cement makers, glass factories and other businesses. Some are concerned that companies will find a way to outmaneuver the system, causing the state to fall short of its emission reduction targets.
“The worst possible thing to happen is if it fails,” said Robert N. Stavins, a Harvard economist.
Related: More Fraud Exposed in Green Carbon Trading Scheme
Wow, the Comments section is frightening.
Wow, how can 25million people be so suicidally stupid? Another tax that requires more bureaucracy to oversee is the last thing a faltering economy needs.
+California will be bankrupt within two years. As soon as businesses realize the impact of this new tax on their business they will shutdown or move. More unemployment for the state!
From the comments...
Geoff Somewhere near Philly
"On Jan. 1, it will become the first state in the nation to charge industries across the economy for the greenhouse gases they emit."
In other news, both Romney and the President suggested excluding California from GDP and jobless calculations.
Oct. 14, 2012 at 7:30 a.m.
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"Wow, how can 25million people be so suicidally stupid?..." Oh I don't know but it isn't that uncommon, just watch Canada vote in another Trudeau.
It wasn't that long ago that our wonderful Ontario premier signed an agreement with California, as well as a few other states and provinces, to be a partner in this cap and trade scheme. Also, since the required legislation (buried in the Green Energy Act) to implement this has been in effect since Jan 1, 2012 we will get no notice whatsoever when McGuinty chooses to start our participation.
“The worst possible thing to happen is if it fails,” said Robert N. Stavins, a Harvard economist. I would suggest that the reverse is true.
Picking winners and losers through government action and regulation is not a sign of a free country. The Soviet mindset is alive and well in California.
Al in Ottawa asks, "Wow, how can 25million people be so suicidally stupid? Another tax that requires more bureaucracy to oversee is the last thing a faltering economy needs." It is called brainwashing and apathy, and results in further decline and ultimate collapse.
Re: "so much so that they offered their instructors sharp critiques on the 111 pages of rules. One even challenged the algorithms central to the forest benefit calculations. "
111 pages of rules - what could possibly go wrong.
"Independent verifiers can make $800 to $1,200 a day, according to Mr. Bubser."
Nice work if you can get it - more likely pigs at the trough.
This is exactly what Hayek warned about in the Road to Serfdom.
California. Vs. Texas.
"“The governor of California is jogging with his dog along a nature trail. A coyote jumps out and attacks the governor’s dog, then bites the governor. The governor starts to intervene, but reflects upon the movie Bambi and then realizes he should stop because the coyote is only doing what is natural.
“He calls animal control. Animal control captures the coyote and bills the state $200 for testing it for diseases and $500 for relocating it. He calls a veterinarian. The vet collects the dead dog and bills the state $200 for testing it for diseases. The governor goes to the hospital and spends $3,500 getting checked for diseases from the coyote and getting his bite wound bandaged.
“The running trail gets shut down for six months while the California Fish and Game Department conducts a $100,000 survey to make sure the area is now free of dangerous animals. The governor spends $50,000 in state funds implementing a ‘coyote awareness program’ for residents of the area. The Legislature spends $2 million to study how to better treat rabies and how to permanently eradicate the disease throughout the world.
“The governor’s security agent is fired for not stopping the attack. The state spends $150,000 to hire and train a new agent with additional special training, re: the nature of coyotes. People for the Ethical Treatment of Animals (PETA) protests the coyote’s relocation and files a $5 million suit against the state.
“The governor of Texas is jogging with his dog along a nature trail. A coyote jumps out and tries to attack him and his dog. The governor shoots the coyote with his state-issued pistol and keeps jogging.
“The governor spent 50 cents on a .380-caliber, hollow-point cartridge. Buzzards ate the dead coyote.
“And that, my friends, is why California is broke and Texas is not.”
It won't fail, businesses will leave, emissions will go down. All according to green planning.
Correct me if I am wrong but is it not true that if a company gives away some part of it's production to the needy, is this not considered a charitable donation? Since CO2 is a part of the food chain, and the poor need food. It is obvious that the giving away of CO2 for free is a charitable donation that should be applied against taxes payable. The value of this tax deduction would at first be decided by the producer of the CO2 to be equal to or greater than the cost of the cap and trade cost.
Naturally this would be contested by the state taxing agency, which would end up in court, at which time the fun would begin.
Luckily people can still leave the state. For now, anyway.
Still, it is going to be fun when all the car companies, trucking companies, railway companies, gun companies, ammunition companies, FOOD companies decide to stop doing business in California. There is no law compelling Ford to sell their F-250 there, especially if doing so exposes them to huge regulatory risk.
The fun will be watching San Francisco dwelling DemocRats wake up one morning and discover they can't get parts for their $70,000 truck, so now its a boat anchor. Oh, and there's no food at the store.
Not shedding any tears for Californians. They keep voting these liberal idiots in, they can take the consequences. Boo hoo.
Fred, great summation and so true, like the idiots here in Alberta screaming for spending millions of dollars on a public inquiry into XL's tainted meat, that has sickened 12? people across Canada. There is no more money people, there are more people sickened everyday by their own cooking. When people want a govt. that will do everything for them including, tucking them in at night, there will be nightmares, Colifornia is that nightmare unfolding in front of the world. Being self reliant as long as one can is a good thing, lefties were never taught this trait, they turn to govt for everything.
Two weeks ago, Cali was complaining about outrageous gasoline prices. Cap and trade will certainly raise prices on gas, but imagine if the refineries closed because of C&T.
Quid pro quo. Getting what they want, right???????
What is it that the politicians in California don’t understand about “stop digging!”?
It seems as though the whole state is in a pretend movie and have a pretend happy ending, regardless of the hard and crushing reality.
I live in California. Cognitive dissonance is our way of life. I'm sorry to say that the way this will end is in economic chaos and social disintegration. There is no way this can succeed. I wish the people who thought up this nightmarish idiocy would move to Cuba and leave the rest of us alone.
It's de facto central planning by any other name. It allocates production quotas and the problems associated with central planning will be replicated in this system, i.e. "introduction" -- the unwillingness to risk introducing new processes since the risk will be that it increases CO2 output with the attendant penalty whereas if it succeeds one's quotas will be lowered for no net gain. Expansion of production will be out of the question. At least with this program the old saw, "Last one to leave please turn out the lights" will be redundant since the lights will have gone out well before the last one leaves,
DrD, "It's de facto central planning by any other name." Exactly, see my post @ 10:01 am.
"The outsize goals of California’s new law, known as A.B. 32, are to lower California’s emissions to what they were in 1990 by 2020 — a reduction of roughly 30 percent — and, more broadly, to show that the system works and can be replicated.The risks for California are enormous...
“The worst possible thing to happen is if it fails,” said Robert N. Stavins, a Harvard economist."
Based on current events, the odds are excellent that California's Cap and Trade program will be next years Nobel Peace Prize Winner.
You can't argue with people who know it all.
There are thousands of homeless on the streets of LA and other urban centers and LA city council spent hours and days debating whether their shopping carts and couches etc on the street were their personal property and therefore couldn't be removed.
Californians feel very strongly that all of their issues can be resolved just by raising taxes. Not just this cap and trade scheme, but also property taxes, personal income taxes, taxes on business etc. There is no acknowledgement that they have not adjusted their spending post the dot com boom, nor any acknowledgement of what these taxes will do to businesses and jobs.
George Clooney jumps into his tux, pours a dink with the boston shaker and solves all the state's problems on his back patio, all while raising a few million for Obama.
This state is a ship pointed squarely towards the rocks and going full steam ahead.
I deal with a major supplier of industrial plastics and resins. they are based in Washington state and actually supply chemicals to California.
the reason? Cali state regulations regarding any phase of materials handling are so onerous, it is functionaly immpossible to hold stock.
on a more humerous note, the golf greens fees are way lower too.
I'm praying, I'm praying!
As for whether the Liberal party is to be led by Pierre Trudeau's son or Pierre Trudeau's mistress, it doesn't matter much (I prefer Ms. Coyne, actually)
so long as the Libranos get enough votes to split the left and keep the Conservatives in power.
Fascinating to see in the comments how apparently knowledgeable people can't see forest for trees. For example, a guy with some kind of science background was ranting about how much companies could save by saving energy. He is correct on the numbers, but fails to see that companies have been trying to save energy, and money, for decades. Whatever is left now is clearly close to impossible to reduce. The legislation won't force them to improve, it will force them to quit.
the cali gov't is stupid, butt they got voted in, nuff said
Idiocy, but Californicate is not alone, here in BC we tax schools and hospitals for their CO2 "emissions". Yep, the government taxes itself, they have a perpetual taxation machine.
Its the best place on earth.
There politicians love this because of the Cap & trade corruption in Europe. They felt they where missing out on an opportunity to steal more themselves. Whats the use of having money when you have nothing to spend it on because you destroyed the industries? They will get 1990s air standards just from the fact there will be half the people residing in California than in the 90s. The Liberals will be left in a desert with no money, with California looked at like some 3rd world hell hole. When even Mexicans are leaving the State, you know the end of the delusion is over.
Wow, how can 25million people be so suicidally stupid?
There are actually more than 37 million Californians. I'd say that 2/3 is a reasonable estimate of the number who are suicidally stupid, which goes a long way towards explaining why I haven't been Silicon Valley Jim for two and a half years now.
Green theocrats, meet the rent seekers, they will make you all look very foolish.
Almost all the ills of California minus the federally "allowed" Mexican invasion are shared by Ontario and Quebec. Ontario has almost twice the per capita debt of California. Quebec is worse. Allison the Red will gladly get Alberta to pay for it all while BC is going NDP. Meanwhile, A few thousand soccer moms in Ohio will determine the future existence of the US in any recognizable form.
Atlas Shrugged II couldn't come at a better time.
I guess they didn't get the memo about GW not being man made after all.
My crystal ball says that Cali goes bankrupt in two years and Mexico buys it back, with money loaned by the Chinese.
"O, Sweet Saint Of San Andreas"
I just realized that this is actually a tautology...
Or maybe that's what you intended?
The most effective way to rein in green house gases is to make the economy less productive.
So this scheme should work like gang busters.
As a Texan I welcome the additional jobs this will bring to my State... though I am less enthusiastic about the inevitable horde of jobless Californians who are sure to follow.
Cascadian @ 1:35 pm
Think about it. If the government can tax itself it is a simple matter of one hand giving and the other hand taking but you ignore the wonderful unionized government workers added to the already bloated bureaucracy. Someone is required to carry it from one hand to the other. Why not a well-paid bureaucrat with a golden pension plan and bennies? It all makes sense ............. in BC.
I wouldn't mind if California seceded and pursued their Utopia on their own. Border fence would fit good right there.
There is enough empirical data available now to refute the theories of AGW and the urgency of extreme, effete taxing measures - manufacturers should read the riot act to the kleptocrats in these scientifically retarded jurisdictions and if they don't drop taxing innocuous gas emissions they should personally sue the bastards back into the stone age they live in.
Global warming is the new religion. There's simply no other way to describe it. And like religions in the past, it will enrichen a few while keeping the rest poor. It will be a source of uneeded conflict and will throw science out the window. It will operate on fear and will allow you to sin if you pay up. It will aim to control your life.
“The worst possible thing to happen is if it fails,” said Robert N. Stavins, a Harvard economist.
Au contraire. Failure would be a valuable object lesson to the neo-fascists that they cannot control everything, and that the law of unintended consequences trumps the zeal of good intentions every time. I predict:
1 - Hundreds, if not thousands, of businesses flee the state. further reducing tax revenues and increasing the pressure on the state's coffers
2 - Rampant corruption in the 'cap and trade' market, resulting in enrichment of crooks, loss of tax revenue, and of course, no significant decrease in CO2.
3 - Voter revolt as they realize their jobs are being forced out of the state. Watch for a huge Republican resurgence in CA in two years.
To quote Nassim Taleb, "the characteristic feature of the loser is to bemoan, in general terms, mankind's flaws, biases, contradictions, and irrationality - without exploiting them for fun and profit";
it is evident that governments presented with a new source of revenue, a large source taxes that many people are eager to pay, are indeed exploiting the losers for fun and profit.
Cue to video of a caveman, club in hand running singing "California Here I Come....Right back Where I Started From"..
(Joke from an old cartoon, or a Mitch Miller Show, not sure which)