Is Carbon Trading Just A New Way to Tax the American Consumer to the Tune of $300 Billion a Year?
Submitted by EnergyTechStocks.com
Will carbon trading impose a huge new tax burden on American taxpayers?
Noted cleantech investment analyst Neal Dikeman says he was quietly told by a Washington official involved in working to create a carbon “cap-and-trade” market that it could result in the equivalent of a new $300 billion tax on Americans, as companies pass through the cost of complying with the new regulations.
However, a new study from the Massachusetts Institute of Technology’s Center for Energy and Environmental Technology finds that carbon trading can reduce carbon emissions without having a significant negative economic impact.
Who’s right?
Depends on one’s point of view, which in turn will depend on the political spin applied by those who favor and oppose a nationwide cap-and-trade market.
As explained by Angus Robertson, editor of Research Recap, a blog that spotlights cutting-edge investment and industry research, the MIT study essentially argues that the cost of cap-and-trade, while not insignificant, will be small in comparison to the overall economy. More than that, the cost of cap-and-trade will be at least partially offset by cost savings resulting in improved energy efficiency generated by thousands of carbon-reduction projects.
Nevertheless, as Roberston noted in an interview, some companies’ costs will go up, maybe a lot, which leads back to what Dikeman was told by the government official who favors cap-and-trade, meaning that his $300 billion estimate could be on the low side.
Whether the estimated $300 billion per year Americans are likely to have to pay out of their own pockets to support a carbon trading system constitutes a “tax” will depend on how it’s spun – but one thing is for sure: cap-and-trade will cost Americans money.
Perhaps an even more interesting question will be: who will control that $300 billion and how will it be spent?
Depending on whether Washington “auctions” carbon credits or gives them away freely to large polluters, either corporations or Uncle Sam will determine how that $300 billion a year is spent.
