Karl Denninger: Monday, June 29. 2009 Posted by Karl Denninger in Editorial at 09:51 (Page 1 of 366, totaling 1097 entries) » next page Carbon Credits: A Scam Ok, I don't usually wade into the entire "global warming" schism on this board, preferring to write about it on Musings instead. But this is going to hit the economy, and as such I'm compelled to do so. You have to be living under a rock to not know that The House passed an "energy bill" late Friday that includes what amounts to a carbon tax via so-called "cap and trade." Let's first define what this is - "Cap and Trade" is a taxation system when what you do (commercially) that causes carbon dioxide to be emitted into the atmosphere is subject to tax, as a disincentive to do so. The justification for this, as Krugman (and others) claim, is: And as I watched the deniers make their arguments, I couldnt help thinking that I was watching a form of treason treason against the planet. To fully appreciate the irresponsibility and immorality of climate-change denial, you need to know about the grim turn taken by the latest climate research. To read the rest of Paul's screed you have to be ignorant of basic mathematics. Not calculus, not differential equations, not even geometry or trig. Math. Fifth-grade stuff. You know, grade-school - specifically, percentages. Let's assume for the sake of argument that the "global warming" folks are right. I am not sold, but for the purpose of this discussion I'll grant the hypothesis that man is causing the planet to get warmer as a consequence of his emission of CO2 (sequestered millions of years ago into the earth's crust and elsewhere) into the atmosphere. Here's the problem: North America has about 330 million people in it, most of them in The United States. That's a lot of people. But Asia has 4 billion people living in it, or more than 10 times as many. And unfortunately most of them are living at a vastly inferior standard of living compared to ours. Africa has about 970 million people (three times North America), and again, nearly all are living vastly below our standard of living. We're 1/15th of the population in question and nearly all of the rest of the people involved are going to dramatically increase their per-capita CO2 output whether we like it or not. Herein lies the problem: While we emit more CO2 per-capita than anyone else today, we won't be emitting the most CO2 for very long on an aggregate basis. To actually stop the increase in CO2 emissions we would have to find some way to compel the Asians and Africans to not increase their CO2 emissions. But all possible means for them to improve their standard of living inherently involve significant and even dramatic increases in CO2 emissions per-capita. The math is simple: Within a few years China will emit more CO2 than we will. A few years after that both Africa and India will surpass the Unites States. None of these regions will agree to stop emitting CO2 because to do so is to agree to keep their people perpetually poor and agrarian while we enjoy the fruits of a westernized, industrialized economy. That's not going to happen and yet without it happening no amount of bleating about "climate change" or laws passed to curtail our CO2 output will do a thing for the climate of the planet. It will not make any material difference to the outcome; indeed, oil companies have said that they will simply move refining and other operations to nations without such pacts (like India and China!) to avoid the tax, and pass through any impact in the US directly to consumers. The amount of CO2 emitted will not go down, but your costs will go up, making the only net effect economic: you will be poorer and whatever man-made effect exists on the climate will continue to exist. If we were truly interested in the welfare of the planet we would recognize that short of thermonuclear war developing nations are not going to agree to stop developing. We would thus divert our attention toward dealing with the changes that come with our planet's climate, whether it is in fact warming due to our activity or whether the changes in climate are more mundane (read: due to the sun.) We would thus deploy our money where it could actually do some good, such as flood control and population relocation, along with modifying farming and other production resources to be able to suit changing climactic conditions. Instead we have so-called "economists" like Krugman who are incapable of doing basic 5th grade math resorting to emotional pleas to try to guilt us into ignoring the basic mathematical facts: this bill will do nothing to address any actual problem and can't, simply because the lions share of the people on the planet will not agree to go along with any plan we might formulate - and this assumes the "global warming" crowd is right.