Environmental Policy

1.  Green Technology

I am a big believer that we must move steadily and as quickly as possible away from traditional fuel sources, especially fossil fuels, to what has been termed ‘alternative’ fuels:  Solar, wind, hydroelectric, geothermal, gravitational, etc.  I think in that basic concept, I agree with Democrats and President Obama.  Where I disagree with them is how to get from here to there.

I sincerely believe that government mandates will not solve this problem.  First of all, no matter what the government spends, it is a small percentage compared to the private capital available worldwide.  Second, the government has a habit of targeting the spending without knowing much about the technology; in other words, it tries to pick the winners without having more than an educated guess.  This historically has not worked well, with ethanol subsidies being the biggest example of government failure.

I have an alternative solution, which frankly is simple, more effective, and surprisingly hasn’t really been presented on any large scale initiative which I have seen.

Simply put, let the free market decide, with a small push from government:

  • Make all companies in the fields of alternative fuels (I would start with solar, wind, etc.), and allow them to be totally tax free for the next decade.  No federal taxes.  This kind of tax benefit allowed internet sales to boom during the 1990s, and without them, it is unlikely that companies like Amazon would have survived.
  • Streamline regulatory practices for these industries.  Companies should not have to fight every locality to get windmill farms put up.  And that includes environmental protections, which are becoming more cumbersome for both solar and wind energy.
  • Invest in the infrastructure necessary to transmit power by modernizing the power grid.

That is it.  Sounds too simplistic, right?  But the first item is the key.  You need capital investments to truly fund the research necessary to make these devices useful in the real world.  And unlike the government, the private sector does a much better job picking winners, and dumping losers.  The more attempts you have at trying to build the perfect mousetrap, the more likely you are to succeed.  Cost wise, this is cheap; sure, you are going to lose some tax dollars, especially in later years, but I would wager this will be much cheaper in the long run than borrowing money and handing out government checks.  Finally, and most important, this will bring foreign capital to America.  It would give us a leg up in being the front runner in these technologies, simply because we would be the most green technology friendly nation in the world.

2. Environment

This is a topic that conservatives must adopt as their own.  I think as a group, and as a party, we have failed ourselves and the American people on the issue.  We don’t have to be environmental wackos, but we need to take a reasoned and scientific approach to the question.

First, end the whole argument about global warming.  First, let us be clear:  there is global warming.  The real question is whether it is man made.

I think the question is simply a waste of time, with all apologies to Nobel Laureate Albert Arnold Gore.

There is a lot of evidence to support the hypothesis that there is man made global warming.  And if I had to guess, I would suspect that is the case.  But NO ONE can prove whether it is true or not.   Those that say they can don’t understand the basics of the scientific method.

But frankly the question doesn’t matter.  I love the response I get, both from environmentalists and global warming non-believers, when I say this.  But it is fact.  The truth or falsehood of man made global warming should be irrelevant.

How can I say that?  Easy.  One thing we can all agree is that pollution is bad.  Not good.  Harmful.  However you want to state it.  Pollution is something we can all agree should be minimized.  There are all sorts of pollution, but clearly carbon dioxide, the main culprit in global warming, is apollutant.  So we need to decrease carbon dioxide emission, simply because we don’t want to pollute the planet.  It is that simple.

Now comes the hard part.  How vigilant are we going to be in stopping pollution?  The left wing environmentalists are ready for us to stop using all fossil fuels today.  That is great, exceept the costs to humanity would be huge.  There is a good chance many people would starve, and many would die, if were even able implement such a strategy.

The only solution to this is technology, which I some what confront above in topic #1.  Only by producing real alternatives to fossil fuel can we make a permanent switch.  It is not realistic or plausible for us to demand that switch before it is possible.  Does anyone believe that the third world, including India and China, would ever accept that kind of sacrifice?  And let us remember, the third world makes up almost 2/3 of the world’s population.    So it is simply not realistic.

But, there are steps we can take to minimize our pollution, and be at the forefront of the world environmental cause:

  • Adopt tax and regulatory practices as I describe above; we will quickly become the world leader in green technology.
  • Change tax law on vehicles.  Instead of taxing vehicles based on their cost, tax them based on their gas mileage.  People still have the option of buying gas guzzlers, but how many will when they have to pay an extra $5,000 for the pleasure?
  • Slowly and steadily increase MPG standards on cars and trucks.   Expand efficiency standards to other devices, such as lawn mowers, who are a major emitter of CO2.
  • Push coal fire plants to modernize quickly.  They must be able to either be relatively clean within a decade or two, or close down.  10 years is plenty of time for them to make the upgrades.  I understand that this cost will be passed to consumers, but it is a cost we must bear.  Additionally, however, if they are able to become ‘clean’ earlier, give them tax breaks so they are rewarded.
  • Remove regulatory barriers for nuclear power plants.

3. Alternative Fuels

This is an area where the U.S. has fallen years behind the competition, and much of it is directly the governments fault.  Ethanol subsidies have done more to hurt the cause of alternative fuels than help; I know that will never win me many votes in Iowa if I ever run for President, but it is the truth.

Brazil is the ideal model for biofuels.  Using sugar cane, they get a large bulk of their fuel from biological sources.  Now, on top of that, they have oil reserves that they are exporting.  The investment in biofuels over the past decade will pay huge dividends for Brazil in the years to come.

We here have tried to keep the ethanol business afloat with subsides.  It is a totally broken system.  I am all for ethanol, but the market should decide if the industry succeeds or fails.

4. Cap-And-Trade

Cap-and-trade is a simplified term that entails the buying and selling of pollution credits for carbon dioxide and other carbon producing pollutants.  This trading market would primarily occur with energy producers and other manufacturers, in the hope that the increased costs of pollution would drive the amount of pollutants downward.

Each participant would get certain amount of ‘credits’ equivalent to certain amount of carbon pollution.  Those that use less than their allotment can sell those credits to those that are polluting more.  Therefore, if you are cleaner, you can theoretically make a profit by your environmental friendliness.

A worthy goal; one which I support.  But it has drastic repercussions.

Republicans have estimated that the overall increases in costs from a cap-and-trade system would increase the average expenditures for a family of four by $3200.  Now, many including Democrats have disputed that.  For example, Politifact, using MIT professor John Reilly’s numbers, said the number was actually $215, and placed the Republican claim in their hall of shame, called ‘Pants on Fire’.

However, Reilly now admits that his calculations are in error.   The Weekly Standard’s John McCormack has been corresponding with Reilly for several weeks, trying to correct the calculations.  In the end, Reilly admit that there was a gross error in his numbers, and that the actual cost would be approximately $800 per family of four (or $512 for the average 2.56 person household).  Reilly said, “I made a boneheaded mistake in an excel spread sheet. I have sent a new letter to Republicans correcting my error (and to others).”

However, even that number isn’t accurate.  The $512 paid annually per household is merely the “cost to the economy [that] involves all those actions people have to take to reduce their use of fossil fuels or find ways to use them without releasing [Green House Gases],” Reilly wrote. “So that might involve spending money on insulating your home, or buying a more expensive hybrid vehicle to drive, or electric utilities substituting gas (or wind, nuclear, or solar) instead of coal in power generation, or industry investing in more efficient motors or production processes, etc. with all of these things ending up reflected in the costs of good and services in the economy.”

In other words, Reilly estimates that “the amount of tax collected” through companies would equal $3,128 per household.  In other words, the Republican numbers were in fact right, and Dr. Reilly and Politifact were wrong.

And it gets worse.  Reilly now states that his calculation of $800 is on top of the other costs, so the total now would approach $4,000, even more than the initial Republican estimates.  Riley does argue that households would get that money back…but doesn’t exactly say how.  Yikes.

Now, in the larger scheme of things, an average $4,000 increased taxes on every household in the country would be, by far, the largest tax increase in world history.  It would disproportionately affect poorer, rural states versus richer, coastal states.  And this is a purely regressive tax; there is no favoritism for income.  Every household, rich, poor, or in between would have to pay these costs.  This, obviously, would again break Mr. Obama’s pledge to not increase taxes on those making less than $250,000.  Of course, I am sure the White House will argue that this is not a tax, per se, but just increased expenditures for the cost of pollution.  Maybe so.  But I doubt that will matter to the 310 million Americans who will have to signficantly increase their outward expenditures because of cap-and-trade.