Hill Heat

2:22 PM Armey Environmental regulations would probably create shift from the private sector where freedom reigns to the public sector where command and control reigns. Whatever we do with concerns for the environment relates to energy, electricity, fossil fuel energy. These are among the highest linkage factors in the economy. There will be reduced output and reduced job opportunities. I found myself going back to Armey’s Axiom Number One: the free market is rational, the government is dumb. The market has a history that leads people to best utilize and effectively conserves resources. Government policy generally leads you in exactly the opposite direction. Look at how dramatically obscene agriculture policy is.

2:28 PM Boxer One of my most famous constituents is here. Dick talked about the private sector and capitalism, a perfect introduction to Vinod Khosla. Tell us what you think we should be doing with global warming.

Khosla I come before you not to make an environmental case but an economic one. I believe climate change legislation is good for our economy and our national security. I believe in free markets in a level playing field. We need to start mitigating our risks. We spend over $300 billion on oil imports. Should we spend more money lining the pockets of Hugo Chavez and those who fund terrorism? The uncertainty around climate change legislation is hurting the US economy. Delayed investment, job creation reduce our competitiveness. Solar CIP creates 20 times as many jobs as a coal-fired plant.

2:35 PM Ringo I’d like to suggest seven investment priorities. 1) Clean R&D, such as power storage. Solar PV were invented in the US but commercialized and built abroad. 2) Early commercialization of new technologies. 3) Congress needs to provide market certainty to renewable energy producers. 4) Incentives for clean energy components. 5) Green building retrofitting. 6) Carbon-cap policy must level the playing field to apply to importers. 7) Education and training initiatives. From Iraq to New Orleans, the tragic consequences of our excessive dependence on fossil fuels is driven home every day.

2:41 Winegarden I examined the impact of cap-and-trade on the US economy. Cap-and-trade legislation creates a few green jobs but destroys more jobs. Fossil fuels currently account for 86% of our energy consumption. In the short term, limiting greenhouse emissions only by limiting energy supplies. Energy supply shocks caused a 2% reduction in the US economy. Regardless of one’s position on the climate change consensus, cap-and-trade is an inferior price instrument. Price volatility decreases economic efficiency. Failure to achieve universality greatly reduces its environmental impact but the economic impact will remain the same. Dow Chemical and the aluminum industry have been moving industry out of countries with higher energy costs. The costs of reducing carbon emissions are by no means trivial. Cap-and-trade is wrong. However, if appropriately constructed, a policy with a carbon tax and a reduction in marginal income tax rates would be good.

2:46 Berrigan Any credible program to reduce greenhouse gases must include nuclear energy.

2:52 Sanders My impression is that you’re creating many small-business capitalists by allowing people to sell solar power back into the grid.

Gabriel Thousands of new jobs are being created in East Germany by companies including American companies creating solar wafers. You have the right to put the energy you produce back into the German grid. You get money for your energy production.

Sanders How many homes have this arrangement?

Gabriel Some hundred thousand. It’s a growing number. Some use geothermal, some use photovoltaic, some use wind.

2:58 Inhofe Dick, Dingell has proposed a gas tax. I’m not in favor of it. I think it’s a more honest way of doing it, not a cap-and-trade system.

Armey The early research in economic externalities was really part of the government’s failure to establish the proprietorship of the environment. I like about the Dingell proposal is that it sets a price. Cape Wind is clearly a governmental NIMBY problem. Same with nuclear. It is because of government regulation we’ve never developed the low-sulfur coal, in fact putting them into parks. The market encourages the genius of the private sector. The problem with cap and trade is where do you make the initial allocation? I say give them to Medicare. Let Medicare peddle them to the private sector. My guess is politicians will decide who are our best friends, for a politically defined redistribution of the wealth.

Inhofe Isn’t a carbon tax more honest than cap and trade?

Winegarden Absolutely. Taxes are a negative incentive. They need to be balanced out by a positive incentive by cutting marginal tax rates.