Cap and Trade Calamities


That’s Elaine Kamarck, a former Clinton administration official and advisor to then-Vice President Gore, and she’s talking about the Waxman-Markey cap and trade bill. In order to garner enough votes to pass the House of Representatives, policymakers made promises that have groups like Greenpeace questioning the environmental effectiveness of the bill.

One of the most contentious provisions in the bill is the use of carbon offsets to reduce carbon dioxide emissions. Offsets allow carbon-emitting businesses to pay others to reduce their greenhouse gas emissions.


Section 731a of the Waxman-Markey cap and trade bill creates this independent “Offsets Integrity Advisory Board” to help the administrator make decisions about the appropriate regulations. The board authorizes sector-specific allocations of international offset credits—which are highly vulnerable to politicization.

Proponents of cap and trade are trying to convince farmers that they will be the big beneficiaries of a carbon offset program because farmers can use cleaner technology, reduce nitrous oxide emissions, or simply not grow crops. But because so many sectors can take advantage of the carbon offset program, there will be little left for farmers. Page 60 of the Environmental Protection Agency’s analysis of the Waxman-Markey cap-and-trade bill is projecting that most of the domestic offsets will come from forestry and growing trees.


If it sounds silly and fraught with fraud, it is. Even with an “Offsets Integrity Advisory Board,” offsets are difficult to monitor and regulate. They are also very easy to manipulate. For example, a country could build a coal plant and say they’ve created offsets because they were going to build a dirtier one.


In fact, the Italian mafia is getting involved in green energy.

And let’s not forget Enron’s Ken Lay was a strong supporter of carbon cap and trade. He believed a cap and trade program would “do more to promote Enron’s business than almost any other regulatory initiative.” These carbon allowances that will be bought and sold have a value estimated at $50 billion to $300 billion annually, and the trade in them would be a huge new business. Enron may be gone, but others ready to take advantage of cap and trade—at the public’s expense—are not.