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November 26, 2019

Big Business and Climate Cronyism

Market solutions, not top-down control, are the best way to address the climate.

After all the endless debate over climate change, the central topic of conversation remains what to do about our CO2 output. Carbon dioxide — now at record levels — is blamed for rising surface temperatures, which aren’t rising as fast as we are led to believe. And America is blamed as the cause, even though the U.S. pumps less CO2 into the atmosphere than countries that have joined the Paris Climate Accord. In any case, an unlikely group has gotten behind a new plan to reduce CO2 emissions, and the makeup of this group has many on both sides of the political aisle scratching their heads.

The Climate Leadership Council (CLC) is made up a who’s who of Republican and Democrat lawmakers, consultants, and policy wonks who have supposedly come up with a plan to develop a “revenue neutral” carbon tax that would provide dividends to low- and middle-income Americans to offset the inevitable higher energy costs that would be produced by said tax.

The CLC plan has the support of several energy producers, including ExxonMobil, BP, ConocoPhillips and other oil and natural-gas companies. It might sound intriguing at first glance, but as with all things revolving around climate policy, it’s necessary to drill deeper.

This plan appears to be an attempt by energy producers to eliminate their competition in the coal sector. Any carbon tax is sure to hit coal producers the hardest, and leftists have not been shy about their desire to remove coal from our energy options altogether. They have found a fair-weather ally in oil and natural-gas producers.

If the CLC’s revenue-neutral carbon tax, supported by some of the nation’s largest oil and natural-gas producers, sounds like cronyism, well, it is. Remember Enron? The natural-gas company lobbied the George W. Bush administration in the early 2000s to place caps on CO2 emissions, knowing that this would hit coal producers the hardest. Since 93% of all the coal produced in the U.S. is used by the electrical power grid, Enron hoped to fill the void left by the loss of coal with its own natural-gas production. This would have made Enron and a few other companies the de facto providers of the nation’s electricity. Of course, that whole idea went down the drain when it was revealed that Enron was the most crooked company in modern history.

Additionally, the roster of Republican names on CLC’s board doesn’t hide the fact that it’s also receiving a large chunk of financial support from left-of-center groups that also fund numerous activist organizations, including some of the very same groups that go after large energy producers. And let’s not forget that revenue-neutral schemes rarely ever work because the revenue never seems to find its way to its intended target, which in this case would be energy consumers.

It’s a tangle web, and generally that means that it’s the citizens at the bottom of the pyramid who get the shaft. The best solution to our climate troubles, exaggerated though they may be, is to let the market do what it does best. Innovation free of government meddling is what works best. There are too many special interests in government to trust that taxes and increased regulation will bring about the desired solution. And in the end, no drastic solution is even necessary.

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