President Obama’s plan to curb electric utility carbon dioxide emissions won’t do much to delay global warming, but it will please liberals who delight in extending government control over ever larger segments of the private economy. And it will cause a lot of problems for everyone else, in exchange for results that may not be measurable, if they even exist at all.
It is, in other words, a lot like everything else the administration is doing, in producing a society in which government rather than individuals controls our production of everything, and thus our lives.
CO2 composes about 80 percent of the man-make emissions we produce. By 2020, the president wants to cut U.S. emissions from all sources by 17 percent of 2005 levels. However, China already emits nearly twice as much CO2 as either the United States or Europe, and every 18 months its atmospheric pollution levels, and especially carbon emissions, grow enough to replace the savings the United States will accomplish by hitting the president’s target over 15 years.
Environmentalists argue that, by setting an example, the United States can bring along China through diplomacy. However, that has not worked on just about every other Sino-American issue, ranging from trade protection to peacefully settling territorial disputes in the South China Sea.
Environmentalists and the president also offer the preposterous claim that CO2 regulations will lower electricity rates and make U.S. manufacturing more competitive.
Most utilities are already under intense pressure from big industrial users to lower costs and rates, and many are replacing coal with newly abundant natural gas and renewables where those make economic sense. Along with more fuel-efficient cars, which began appearing in large numbers before Obama imposed higher mileage standards, U.S. emissions have already dropped by 9 percent from 2005 levels without the kind of plans the president is planning.
Accelerating this process by fiat will require utilities to scrap and write off still economically viable coal-fired plants and to pass those costs onto businesses and homeowners through higher electricity prices.
Those will send jobs to China, where power generation and manufacturing are not as clean as in the United States, and will actually increase CO2 emissions and accelerate global warming.
EPA proposed limits on utility emissions are but the first step. Next up will be direct regulations for heavy industries like petrochemicals and metals.
Already, through mileage requirements, the Transportation Department is micromanaging the auto sector. Through ObamaCare, Medicare and Medicaid, the Health and Human Services Department controls how doctors practice medicine and how hospitals are run. Through Dodd-Frank, the Treasury and Federal Reserve micromanage banks and are forcing smaller banks to sell out to larger regional and Wall Street banks. And by linking grants to states to the Common Core curriculum, the Education Department is wresting control of schools from local boards. The list goes on.
President Obama is encouraging the states to adopt minimum wages that far exceed what is required by inflation since the federal standard was last adjusted. This will be bring millions more Americans within the sphere of federal- and state-mandated wage rates and effectively make the federal and state governments the custodian of the most essential, and formerly private, bargain struck between employer and worker.
None of this is new. Bill Clinton aggressively inserted the Justice Department Civil Rights Division into all aspects of how businesses evaluate and compensate employees.
Still, the consequences for U.S. living standards have been devastating.
Since the beginning of this century, annual GDP growth has slowed to 1.7 percent, half the pace accomplished in the prior two decades, and annual jobs creation has slowed to 560,000 from 2 million.
Since the financial crisis began, businesses in the bottom third of all employers, such as fast food restaurants, have added 1.9 million jobs, whereas those paying wages in the top two-thirds have shed about as many. In the bargain, U.S. median annual family incomes are down $5,000.
As Washington seizes control of more economic decisions, millions more Americans become dependent on government to negotiate their pay and supplement their shrinking incomes with food stamps, Medicaid, ObamaCare subsidies and the like.
Socialism, Obama-style, is delivering on its promise to make everyone, save state planners in Washington, equally miserable.
Peter Morici served as Chief Economist at the U.S. International Trade Commission from 1993 to 1995. He is an economist and professor at the Smith School of Business, University of Maryland, and a widely published columnist. He is the five time winner of the MarketWatch best forecaster award. Follow him on Twitter @PMorici1.