Greenhouse Gas Regulations are Stealth Taxes

 

In late March the EPA proposed new rules limiting carbon dioxide emissions from new power plants to 1,000 pounds per megawatt-hour. This move spells a death-blow to the coal-fired power plant, as the New York Times admits in its coverage of the announcement:

The Obama administration’s proposed rule to control greenhouse gas emissions from new power plants — the first ever — could go far toward closing out the era of old-fashioned coal-burning power generation.

Recently built power plants fired by natural gas already easily meet the new standards, so the rule presents little obstacle for new gas plants. But coal-fired plants face a far greater challenge, since no easily accessible technology can bring their emissions under the limit.

There is so much wrong with this approach, that it’s hard to know where to begin.

For one thing, note the implicit picking of winners and losers. The EPA’s proposed rule clearly would deliver market share not only to the pet technologies (such as solar and wind) favored by the environmental left, but would primarily benefit natural gas-fired power plants, since they are currently the major commercial rival to coal. (According to the EIA, in 2011 coal provided 42 percent of the nation’s electricity, while natural gas accounted for 25 percent and nuclear 19 percent.) By issuing a rule that so clearly cripples one technology, the EPA opens the floodgates to special interest lobbying behind the scenes, giving it a great carrot-and-stick over private industry.

We also must never forget that government restrictions on activities act very much like a stealth tax. Indeed, at a formal level environmental economists find little difference between a “cap and trade” system, limiting carbon dioxide emissions by quantity, versus an explicit tax on carbon emissions. By calibrating the numbers, the government can achieve largely the same results tackling either the quantity of emissions or by taxing them. Therefore, if the American public understands that slapping a massive new tax on new coal-fired power plants would be a bad idea, then they should also oppose the EPA’s new rules.

Finally, the EPA’s proposal is horribly inefficient because it is so specific. There are many problems with an explicit tax on carbon, or on a functionally-equivalent cap and trade program. Yet the reason many economists support these plans as a way of tackling climate change, is that they are “market-based.” This term (which is admittedly a misnomer, since government officials implement the schemes) refers to the fact that under an explicit carbon tax, people in the private sector figure out where to cut back on emissions. They do so, naturally, in the least costly manner, and so the macro result is that society achieves the government-mandated emissions reduction in the cheapest way possible.

In stark contrast to these “market-based” schemes, it is far costlier for the government to directly mandate particular areas where emissions reductions must occur. The EPA’s rule—limiting only new power plants to a very specific maximum of 1,000 pounds of carbon dioxide per megawatt-hour—is incredibly arbitrary in this regard. Even using the standard theoretical framework that justifies government policies to reduce emissions, the EPA’s proposal is incredibly inefficient, achieving its stated targets at higher costs than necessary.

Obviously what is happening is that the Obama Administration could not push through a full-blown cap-and-trade program, let alone an explicit carbon tax. The American public is too smart to embrace a massive tax on energy, especially in the midst of a severe recession. The EPA’s proposed emission rules on new power plants is simply a stealth tax that will have similar effects on electricity prices.

Comments

  1. Seck says:

    The one EV car we currently have (have 2 vcieelhs that run on hydrogen also, 1 Ethanol 1 Biodiesel) we converted from a vw bug is free to charge. As The Ranch is completely off the grid all electricity comes from solar panels wind generators, which we also built ourselves.However I did charge up at Costco charging station in Carlsbad California (I actually only drove up there to fill up) if I remember right it was around $2.00Not sure if you’re interesting in doing it yourself, but I’d be willing to walk you step by step threw the conversion. I’ve converted 3 of my own cars (a datsun truck, ford van, a vw bug) a few for neighbors. I’ve also converted cars to run on hydrogen, ethanol biodiesel, by far EV is the easiest.If you’re interested here’s what it would entitle…- The engine compartment is first cleaned out of any gasoline components.- Electric components are then installed in exchange.- A battery bank is built incorporated.- Existing starter driving systems are connected.- Turn the key, step on the gas pedal sending more energy to the electric motor, thus more power to the drive system, which in return creates more speed, more acceleration.- The system has normal automotive top speeds acceleration, typical to the vehicle your modifying. If your top speed was 85 mph your acceleration was 1 mile per min, then this will be what your left with after the conversion.The methods are extremely simple, making the process possible for anyone, everyone, ANYWHERE.Typical tools, hardware supplies are used, making access to parts available for all.Electric Conversions can be easily accomplished in ANY model vehicle, even tractors, Generators, types of machinery, etc.Project lengths range from 1 day to 1 month.If you’re interested I wrote a guide on it which is available at www agua-luna comMy last EV conversion ran me about $1400. Everything is available online. Here’s a list of what you’d need Advanced DC MotorThe motor is an 8 Advanced DC series-wound motor. It weighs 107 pounds is rated at 68 peak horsepower. These motors are available in several sizes.Adaptor plateThe adaptor plate mates the motor to the transmission. It is constructed of 1/2 inch aluminum is pre-drilled with bolt hole patterns for both the motor transmission. An aluminum spacer is also used for proper spacing between the shafts of the transmission motor. Adaptor plates are available for many cars.DC Motor ControllerThe controller regulates current going to the motor. It is a solid-state device that uses a pulse width modulator (PWM) that sends short bursts of current to the motor at a rate of 15 kHz. Controllers are available from both Curtis DCP.Potbox (Potentiometer)The potbox is a 5K ohm throttle between the controller the accelerator, similar to the way a sewing machine pedal works. The potbox’s lever arm is attached to the existing accelerator cable.Main ContactorAn electric relay that serves the same purpose as the ignition switch in a gas car. When the key is turned to the start position, the contactor closes the circuit to allow current to flow to the controller.Circuit BreakerA safety device that shuts down power for servicing or during an emergency. The circuit breaker is installed under the hood can be switched both off on from the drivers seat with an extension or cable.Main FuseThe main fuse protect the system from high voltage spikes. A fuse should be installed at each battery box or group of batteries.ShuntA shunt is placed in series within the wiring as a means to connect meters. Shunts are available in different sizes for both high low power configurations.Charger interlockA relay that keeps the circuit open so nobody will inadvertently drive off with the charge cord plugged into the car.DC/DC ConverterThe DC/DC converter is similar in function to a gas car’s alternator. It charges the 12 volt accessory battery by chopping voltage from the main battery pack down to 13.5 volts. Hope this helped, feel free to contact me personally if you have any questions if you’d like assistance in making your first self sufficient steps, I’m willing to walk you step by step threw the process. I’ve written several how-to DIY guides available at www agua-luna com on the subject. I also offer online on-site workshops, seminars internships to help others help the environment.Dan Martin

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