Cap and Trade Should Be Benched

I am not ignorant of the science; I'll even repeat it here so everyone knows that I'm not just paying lip service. Carbon emissions causes global temperatures on average to rise. The polar ice caps melt, draining millions of acre-feet of freshwater into the ocean. The sea levels rise, the thermohaline circulation shuts down, and no longer does the ocean transmit the sun's heat to northern latitudes... Ice age. Ok, so we can all agree on the theory.

Here is the problem: enacting drastic carbon reducing measures such as Cap and Trade, and other carbon taxes poses a much greater risk to our present survival than climate change or rising sea levels. Consider this: our economy is presently far more fragile than the Earth's climate, and our ability to affect the economy is presently far greater than our ability to affect the climate. Carbon taxes are regressive. A regressive tax is one that is proportionately levied more heavily upon the poor, than the rich. Well how can that be, you ask? After all Cap and Trade is a tax levied on rich energy companies, big industry, and baby-seal-hating SUV drivers. While that may be true, what is also true is a law of economics: taxes always get passed on to the consumer.

Trickle-down economics may be a myth, and maybe not. One thing that has always been true is that taxes trickle-down and raise prices to the consumer. Not all taxes that get passed down to the consumer are regressive, for instance taxes on Lexus, Rolex, Prada - are not regressive because the end consumers are rich. However, when the good being taxed is a necessity, the tax is regressive.

Necessitites are economic goods that are necessary for survival. No matter how much a necessity costs, it still must be purchased. For instance, food is a necessity. Taxes on food are classic regressive taxes.

Energy is a necessity for two reasons. The first reason is that energy is a necessity in and of itself. Energy comes in the form of electricity, heating oil, natural gas, and gasoline. People need energy for light, for heat, for cooking, and to get to work. A tax on energy raises the cost of the necessity for everyone, but it affects poor people more heavily because poor people must pay a higher proportion of their income for energy.

The second reason is that energy is a necessity indirectly. Every good on the shelves of every store arrived with energy - diesel or coal - presumably. So a tax on energy is effectively a tax on transportation. This raises the price of all other necessities which are transported: food, building materials, clothing, and energy.

Cap and Trade will disproportionately raise taxes on poor people. In a fragile economic climate, possibly more susceptible to inflation than ever, raising the prices on consumer goods is a dangerous plan. It is far more dangerous than the veritable drop in the bucket that a few more years of undiminished carbon emissions will cause.