Next Bernie Madoff? Emissions Cap-and-Trade Aids the Corrupt, Hurts the Little Guy

The American people have had enough of convoluted, indecipherable financial schemes and the opportunists who exploit them. The public is understandably angry about Wall Street's exploitation of Main Street, and yet our political leaders are setting the stage for another complex trading market, ripe for corruption. The future Enrons and Bernie Madoffs of the world would like nothing better than to see the U.S. impose a new market for carbon emission trading. [snip]

European governments and industries, in an attempt to stave off the economic impact of cap-and-trade, have found plenty of ways to game the system. Governments have freely handed out emissions allowances. Meanwhile, European consumers have suffered as energy rates have increased. In contrast to the burdens borne by European households, traders have been reaping the benefits of emissions trading with little regard for the environmental concerns cap-and-trade is supposed to address.

The emissions permit market has constantly fluctuated. With the price of carbon up or down by an average of 17.5 percent per month and with daily price shifts as great as 70 percent, European companies have been left to simply guess at how much their environmental compliance costs might be each month. Consequently, investors have been reluctant to invest in these businesses and there is little incentive to invest in new technologies.

As a result, UNCCC data show that the European emissions rate under cap-and-trade increased by 3.5 percent from 2000 to 2006 while U.S. emissions increased by only 0.7 percent.

The cap-and-trade system being touted on Capitol Hill would create a multibillion-dollar playground that would, once again, create a group of wealthy traders benefiting at the expense of millions of average families—middle to low-income households that would end up paying more for food, energy, and almost everything else they buy...

[We've been warned.]

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