Start with the stipulation that the Cap and Trade policy being proposed for the President’s new budget is a politically expedient half-step.  The reality is that we need a carbon tax, but that won’t fly in Washington, so we’ll start with Cap and Trade.

Here is a video about how carbon dioxide is effecting the environment:

http://endependence.info/research/videos-c-13-v-82.html

Here is a video about a unique solution, nuclear explosivity:

http://endependence.info/research/videos-c-13-v-45.html

Now to the objections as voiced by the defenders of the status quo:

Cap and Trade is a burden on the economy, a hidden tax that will burden us all, blah, blah, blah.

I found out that when I sit in one place for hours blogging, my butt starts to hurt.  So every once in a while, I stand up, stretch, walk around, something to avoid the pain.

Is there some reasonable argument that a business will react differently?  If a company finds out that wasting energy is costing it more money, to the point where the cost becomes painful, won’t that company change its behavior?

Estimates are that we waste 30% of the energy we use in the U.S.  All experts agree that energy conservation is the cheapest form of energy policy reform, and the least painful way to achieve energy independence that ends dependence on polluting fuel.  But only some businesses stop wasting energy voluntarily.

A cap and trade policy would make wasting energy a real pain in the butt, and my bet is that almost every business will change its behavior to avoid the pain.

There is agreement among all of the energy experts that energy efficiency is by far the cheapest way to reduce energy costs.  Much cheaper than a new coal fired or natural gas power plant, a nuclear reactor or a wind or solar farm.

Here is another way to look at efficiency, the amount of GDP generated by the amount of electricity used in a state.

http://ert.rmi.org/cgu/index.html

Source: Rocky Mountain Institute (RMI)

The researchers took pains to normalize as much as possible expenditures on heating and cooling based on a given state’s climate.  What emerges is a snapshot of the economic productivity of the energy used by each state ($GDP/kWh = Dollars of Gross Domestic Product per Kilowatt hour of electricity).

The difference between any given state and the top ten states in the study is the productivity gap. RMI estimates that if all states closed their productivity gap, the U.S. would save 1.2 million Gigawatt hours per year.  That is a lot of energy, and a tremendous amount of money to be saved.

Maybe this is tangential, but I found it interesting that three of the four states whose Republican governors are considering “refusing” stimulus funds from the federal government (at least as of February 20, 2009) are ranked as follows:

Louisiana = Governor Bobby Jindal               Ranks #34

South Carolina = Governor Mark Sanford     Ranks #47

Mississippi = Governor Haley Barbour          Ranks #50

A large part of the American Recovery and Reinvestment Act is for “energy” expenditures ($65 billion in tax incentives and expenditures).  Maybe these governors dislike saving energy as much as they dislike taking money that will help their citizens.

http://www.recovery.gov/?q=content/investments

In something that will come as no shock to anyone, the State of Alaska is an outlier.  Alaska Governor Sarah Palin is also thinking about saying “thanks, but no thanks” to the stimulus money.  Alaska ranks #2 on the productivity list.

In summary, no matter how you measure it - electric or gas bill, carbon footprint, $GDP/kWh - energy efficiency makes sense and saves dollars.