Tuesday, October 17, 2006

Carbon Trading Mess

This is a bad idea. Everywhere a free-market system has been set-up for energy utilities, disastrous high prices have followed. The carbon-trading scheme can only work if all the energy companies in the world have no choice. Those who don't opt-in can go to other states, and make money by selling their energy to other consumers or utilities. We saw here in California that an open energy trading scheme allowed some to game the system and drive prices sky high and cause shortages. The same thing will happen with a carbon-trading scheme. A study in Australia for their proposed interstate carbon-trading system showed that energy prices would increase and especially affect the end-user consumer. The idea with carbon-trading is to make energy producing so expensive for the utilities, that they will have to develop lower carbon emitting energy sources. Motivation like this doesn't work, mainly because fossil-fuel energy is so cheap and will remain cheap no matter what strictures a regulating body can put on the utilities. If the greens want the free market to really motivate the utilities to act, it's the consumers who will have to create the demand.

Photo courtesy of AP Photo/Richard Drew, Pool

Making energy expensive so consumers scream seems to be the gameplan for the last 15 years, but all this sin-taxing isn't going to work. Groupthink does not allow a positive demand to be created by introducing negative effects. The groupthink's initial reaction will be to remove the negative reaction, not live with it until outside forces take it away. So, alternative energy sources will only take root when they are cheaper than fossil fuel, because a lower energy bill will be the positive demand. Carbon-trading will increase prices, but the consumers will know that it was the government that caused it, not the utilities. The Greens' attempt at fast-forwarding the research for cheaper alternative fuel will backfire.

They have already tried to influence the college campuses' thinking toward the need for switching away from from fossil fuels, but they influenced the wrong people. Engineers and physicists are the ones that needed the brainwashing, but it's no surprise to me that the students in the hard sciences have resisted the propaganda without proof. The soft social sciences have bought into the message whole-heartedly, but all they can do is lobby the government, since they've also been taught that they can't do anything for themselves. The Greens should start funding campus research groups into finding cheap alternative fuels instead of trying to get the governments to force private energy concerns to do it for them. Let's see how smart they really are.

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