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Cap and Trade Equals Fraud and Tax

Glenn Jacobs (the actor and wrestler Kane)
Campaign for Liberty [1]
Wednesday, July 1, 2009

H.R. 2454: American Clean Energy and Security Act of 2009 will result in a totalitarian centralization of the American economy in the administrative agencies of the federal government, especially the Environmental Protection Agency (EPA). This 1,300 page horror is a prime example of congressional modus operandi — no one in Congress actually had the opportunity to read the bill which was, incidentally, being amended as it was debated on the floor. As H.R. 2454 shows, this axiom still holds true: the more benign the title of a congressional bill, the more draconian its contents. After all, who could be against clean energy or security? The real goal of H.R. 2454 has nothing to do with either of these; it is a power grab, pure and simple.

While we have all heard much about the tax implications of H.R. 2454 and that every American family could see a $3,000 a year increase in their energy costs, H.R. 2454 does much more than that. H.R. 2454 is a fascistic fait accompli, giving the government expansive powers to regulate, subsidize, and tax more sectors of the economy. The bill authorizes more federal government control over the electrical grid, state and local building codes, lighting and appliances, industry, the financial markets, and, perhaps most ominously of all, the health care system. In addition, it includes wealth redistribution measures and would allow increases in foreign aid.

Part of the rhetoric surrounding H.R. 2454 is that it will help break America’s dependency on foreign oil by encouraging development of renewable energy sources. Most likely, the opposite will happen as oil companies “cope with U.S. carbon legislation by closing fuel plants, cutting capital spending and increasing imports.” [2]

Ironically, cap and trade — the cornerstone of H.R. 2454 — does not protect the environment! Even Greenpeace opposed H.R. 2454, recognizing that it “chooses politics over science.” While I would argue that the science to which Greenpeace refers is dubious at best, there is no question that H.R. 2454 has put politics above all else.


In a cap and trade system, the government deems a certain level of pollution acceptable as long as the polluter pays a tax. That’s like saying that it’s acceptable for someone to throw trash on your lawn so long as he has bought a government permit. Even worse, he can throw even more trash on your lawn if he buys additional permits from someone who refrains from throwing trash on your lawn. In effect, cap and trade legalizes pollution.

Advocates of cap and trade have used tortured logic to portray it as a market based system. James Boyce, an economist at the University of Massachusetts, claims that “this is the biggest creation and allocation of property rights since the Homestead Act.” [2] This statement is false on its face and falls into the realm of fantasy.

  • A d v e r t i s e m e n t

Unlike the Homestead Act which dealt with property that actually existed in the real world, the property rights to which Boyce refers have been created exclusively through government edit. There is no such thing as a “carbon credit” except on a bureaucrat’s spreadsheet. Boyce’s statement turns the concept of property rights — the basis of a free society — on its head. The “right” to pollute is not a form of property, it is a government granted privilege.

No one has a “right” to have clean air and water provided for them at someone else’s expense. But no one should have the “right” to pollute air or water that he does not own. Far from creating a new form of property rights, cap and trade undermines the property rights that we own in our own bodies by granting polluters the legal privilege of polluting resources that they do not own and that we put into our bodies, i.e. air and water.

Litigation (in the cases where harm has come to individuals) and a strict respect for property rights offer much more effective ways of dealing with pollution than regulation does.

True environmentalists — those of us who are concerned about things such as clean air and water — should oppose schemes like H.R. 2454. H.R. 2454 is not designed to clean up the environment. It is designed to generate more revenue for the government and to give the government more power over the economy, our lives, and our freedom. And it does so at the expense of the environment.