Now that BP America, Conoco Phillips and Caterpillar have dropped out of the U.S. Climate Action Partnership, it’s clear that cap-and-trade legislation, perhaps better understood as cap-and-tax, is dead or at least severely wounded. Is this a sign that companies are coming to their senses? With the admission that the UN’s Intergovernmental Panel on Climate Change had fudged inconvenient facts – you know, the ones predicting that the Himalayan glaciers would disappear by 2035 and that 55 percent of the Netherlands lies below sea level (the actual figure is 26 percent) – the edifice of the warmists is melting away. In a BBC interview, Phil Jones, the head of the East Anglia University Climate Research Unit, who admitted dumping research that didn’t comport with the alarmist party line, said that there has been no significant warming of the planet for the past 14 years. He also contradicted Al Gore’s mantra when he said that he did not believe that “the vast majority of climate scientists think” the debate over climate change is over. Oops, that’s the sound of the mantle of scientific infallibility crashing to the ground.
This doesn’t mean that other major corporations will see the light and drop their support for cap-and-trade and other energy rationing schemes. There are several policies and proposals that would raise energy prices for business and consumers alike, resulting in the destruction of millions of jobs in energy-intensive industries.
As our feature on Green Visigoths on page 34 points out, not every environmental claim on our society has merit, and business leaders must be vigilant about not succumbing to bogus claims that will exact costs far outweighing the benefits. As Myron Ebell, director of Energy and Global Warming Policy for the Competitive Enterprise Institute, notes, the only certain way to solve a problem such as greenhouse emissions is to devise technological solutions to raise productivity that will allow a seamless transition to other fuel sources. But companies need to generate profits to make the necessary investment to do that.
Utilities and some other companies may be able to game the system because they can safely pass the higher costs of these proposed regulations on to others, but that’s shortsighted. In the end the economy needs to grow and generate income to invest in new technologies that will solve our short-term problem. It’s a capital formation issue. Whacking the economy with senseless burdens only saps the formation of capital, prolonging the very problem the activists claim they want to correct. That’s the real inconvenient truth.