Regulated to Death: Cap-and-Trade Suffocates a Life Well-lived


In an age when it has become trendy to “go green” and minimize our “footprint,” it comes as little surprise that new laws are being passed to push us in this direction. Little more than one year after the Democrat-controlled Senate failed to get the supermajority needed to pass the Waxman-Markey “cap-and-trade” Bill, California has pushed ahead and passed a cap-and-trade law of its own. The bill is designed to ensure that California’s goal of reducing its emissions to 1990 levels by the year 2020 is met in case federal regulations fail to pass.

Like other laws and regulations inspired by environmentalism, the goal of cap-and-trade is to severely restrict carbon emissions in the name of preventing climate change. Once the “cap” is in place, businesses that wish to emit carbon dioxide are then allowed to “trade” for permission to do so within a new artificially-limited emissions “market.” cap-and-trade is, in effect, an “energy tax” because nearly all industrial scale energy involves generating carbon emissions. Industry would therefore be burdened by a new government-imposed cost to remain in business.

The goal for a law like the Waxman-Markey bill is to reduce emissions to less than 20% of their current levels. Given that carbon-emitting energies account for around 85% of our total energy, restricting emissions to these levels would limit total energy usage to less than 1/3 of what we use today.

Of course, cap-and-trade advocates are quick to argue that they are not against energy per se, only the “dirty” carbon-based energies: coal, petroleum, and natural gas.  However, solar and wind energy have yet to make a dent in the market for fossil fuel based energy, despite intense and prolonged government pressure. Subsidies for solar and wind based energy date back to the Carter administration, yet to date, solar and wind account for less than 2% of total energy production in the U.S.  Carbon-based energy still accounts for nearly 85% of domestic energy production, with the difference being made up by nuclear and hydroelectric energy (both of which have also been condemned by environmentalists).

Nearly everyone on both sides of the debate acknowledges that cap-and-trade will have an economic cost. Cap-and-trade champions have cited costs as low as $175 per household annually, while opponents have pointed out much higher costs, upwards of $4,000. Since most Americans have neither the necessary information nor the knowledge of economics to discover the true costs, it can sometimes be hard to know which side to believe.

But it would be a mistake to judge the wisdom of a law like cap-and-trade in terms of mere monetary costs and benefits. Beyond its being a basic requirement for survival, energy is fundamentally important to everything we need to lead productive and happy lives—the kind of lives that we know to be possible only because modern industry and technology made it possible for vibrant opportunity to displace the basic struggle to survive. Imposing a limit on energy production is not just tacking on an extra cost to everything we do. Instead, such rationing restricts and limits the kind of actions and activities that are required for life as we in the modern world know it, and for life as we want it to be in the future.

Every necessity, convenience and luxury of life in an industrial society is utterly dependent upon abundant and affordable energy. Only through access to plentiful energy have we managed the technological and industrial development necessary to create a society in which machines can speed us from one side of the continent to the other in a matter of hours, or in which we can spend leisure time in an air conditioned house while observing images instantly transmitted to us from nearly anywhere on the planet.

It is abundant energy that powers the computers, lights, elevators and heating systems that allow us to work hundreds of feet above the ground in the middle of a Chicago blizzard. The farming tools, refrigeration technologies, and transportation methods needed to for us to be able to conveniently purchase food at the supermarkets would be nothing but useless hulks without the energy that animates them. Even the systems that allow clean drinking water to arrive at the slightest effort of our hands require energy.

Whether we use it for simple conveniences and comforts, for the vital tools of a productive lifestyle, or for the necessities for our material survival, energy provides previously unimagined benefits to our lives. Never in human history has our existence been so clean, secure, and rich with possibility. The lifeblood of it all has been carbon-based energy. And it is precisely this energy that will be restricted by the stranglehold of cap-and-trade.

The damage resulting from restricting the use of energy can’t be evaluated in simple monetary terms. Energy rationing suffocates absolutely everything necessary for life in a civilized society. It would mean technological regression. Advocates of cap-and-trade are cautious about acknowledging this effect, but they do occasionally offer moments of clarity. According to prominent environmentalist Dennis Meadows, “People are getting sidetracked if they think that new green technology will solve all the problems. . . . [W]e have to learn to live a life that allows for fulfillment and development, with the CO2 emissions of Afghanistan.”

When we understand that carbon-based energy is the only current form of energy that can make possible everything we have and do in an industrial society (whether or not this will always be true is irrelevant), it’s clear that Meadows means that we must learn to live with less, and not just a little less. To idealize the emission levels of a country like Afghanistan is to strive for an existence with the amount energy that such a country is able to use, and no more. In striving to emulate Afghanistan’s energy usage, we would—unwittingly perhaps—be forced to more closely emulate its living conditions.

Of course, some believe that breakthroughs in efficiency will make it possible to combine Afghanistan-like energy usage with a first world standard of living. This is a tempting story, because it is would certainly be desirable to require only 1% of the energy to achieve the same livelihood. But efficiency is both insufficient as a means and potentially dangerous as an ethos—the former because even dramatic efficiency improvements won’t suffice to meet cap-and-trade targets while preserving current our standard of living, and the latter because every improvement that has produced our current way of life has come with a new energy requirement. New valuable goods and services require energy to produce; this basic law is true regardless of how efficient that production becomes. Americans currently use thousands of times more energy per person than their Afghani counterparts. This isn’t primary because we are “wasteful” or inefficient. It’s because we make use of and benefit from a tremendously greater number of goods and services.

Certainly we don’t want to live in a world of harsh, medieval conditions where a significant portion of the population lives in shacks and obtains heat by burning dung, or where light bulbs are a luxury. Granted, a cap-and-trade law won’t put us there by itself, but to the extent that we embrace the goal to dramatically reduce energy usage we move ourselves closer to, not further from, the caves of Afghanistan.

We’ve been told that science has proven that drastic action is required to mitigate climate change. Setting aside the controversies and frenzied doomsday predictions, it may be true that a warming climate will pose a problem in the coming decades. But human beings have always had to deal with intense weather cycles that may change wildly over the scale of months—let alone centuries—by using energy and technology. Human beings have used their ingenuity to adapt to a wide variety of different climates and even to global climate change such as that seen during the Medieval Warm Period and the Little Ice Age of the nineteenth century. If we face an unprecedented problem in human history, then the last thing we should be doing is adopting policies that require us to throw away the tools that have enabled us so successfully to conquer the problems posed by nature in the past.

Energy is a tremendous value to human beings everywhere. Abundant energy has made the basic necessities of survival little more than afterthoughts for most Americans. We would do well to remember that not only do our basic necessities depend on abundant energy, but so does our ability to lead prosperous lives replete with convenience, enjoyment and opportunity. From abundant food, shelter, and clean water to modern medicine, transportation and entertainment—none of it would be possible without a great deal of energy.


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