Maggie's Farm

Question re Cap & Trade: why would corporations mind paying a carbon surcharge?  They will simply pass it on to consumers as a price increase and have a net cost of zero.

Answer:  Passing the cost to consumers, which they must do, will make domestic American products more expensive in comparison to imports and will result in reduced sales.

Unintended consequences:  1. To the extent that production can be shifted to foreign companies or foreign plants of US companies, jobs will move overseas.  2. With respect to domestic production, the result will be wildly inflationary.  3. Because cap & trade fees allow pollution to continue, the environment will not benefit (but it is becoming clear that global warming climate change is not human-caused in any case so the only effect will be that production will shift to China and the world will see a net increase on pollution).  4. Cap & Trade is designed to motivate companies to spend money to reduce their pollution, but that will further increase their costs and further reduce their competitiveness – a lose-lose situation.

Photo: That's our Kondratiev