Bob Murphy spins shallow "Blockbuster study" by coal lobby on cap and trade bill
The coal- and utility-funded “free-market think tank” Institute of Energy Research has a just released another study that tells us the obvious about the regressive consequences of the Waxman-Markey cap-and-trade bill and the benefits likely to flow to its corporate supporters, while masking its own agenda. As an added benefit, the press release includes some one-sided and unsupportable over-statements by Bob Murphy.
A few points:
IER: “cap-and-trade would precipitate a financial windfall for well-connected
special interests and politically-favored companies.”
me: No dispute here. It`s perfectly fair to point out who will benefit from the cap-and-trade bills. But let`s not ignore that coal investors have long benefitted from being able to shift pollution costs to people downstream, under the perverse “rights to pollute” enabled under the Clean Air Act, and under state and federal mining licenses that allow mining firms to force out local residents.
IER: “The study … details how shareholders,
not ratepayers, will be the primary beneficiaries of cap-and-trade’s
largess.”
me: Sure, just like how it was shareholders in coal producers and utilities who are the primary beneficiaries of the externalities permitted by the status quo.
Bob Murphy: “[The] analysis … illustrates just how flawed and skewed this
legislation is toward rent-seeking special interests.“
me: Sure, but the interest of the coal lobby is that the legislation doesn`t benefit them enough. Do coal investors care MORE about what`s good for the average Joe than do other “rent-seeking special interests”?
Bob Murphy: “secondly, and more important, [the analysis] shows that cap-and-trade, as
outlined in Waxman-Markey, is nothing more than a transfer of wealth
from the poorest to the richest among us.“
me: Oh really? Does the analysis really conclude that Waxman-Markey does “nothing more” than transfer wealth? You mean Waxman-Markey wouldn`t actually raise prices of carbon-based energy or affect consumption and investment decisions by industry, businesses and consumers?
Bob Murphy: “These new findings should send a clear message to the American people – cap-and-trade helps the powerful and hurts the rest of us.“
me: The message is fine and important. But are coal firms and investors “the rest of us”, not powerful and only concerned about the average Joe, or are they trying to protect their own privileged position? Further, are there any alternatives to cap-and-trade that coal investors support, such as carbon taxes, or even undoing their favored treatment under federal clean air laws and mining laws?
Bob Murphy: And as Congress’ corporate allies receive the bulk of the benefits
Waxman-Markey has to offer, our environment, along with our struggling
economy, will suffer for years to come. Congress needs to get out of
the business of picking winners and losers and allow the market to
determine which energy and electricity sources should power our
economy.”
me: Ahh yes, forgive me; I forgot that coal firms were a part of the enviro lobby! But aside from that, I agree strongly that Waxman-Markey is poor policy. Do coal investors agree with Exxon that rebated carbon taxes would keep Congress “out of the business of picking winners and losers and allow the market to determine which energy and electricity sources should power our economy”?
Thanks, IER for showing us how “political capitalism” works!
* “Political capitalism” is Rob Bradley`s term for “rent-seeking”
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