Cap and Trade sounds attractive in theory and it can work in limited situations. If used to address a fundamental problem, it can translate to a widespread casino-like roller coaster of financial uncertainty, not unlike the recent mortgage market. Cap and Trade cannot set the course for market-driven change to correct long standing, massive energy-related problems in the overall USA economy, and it cannot achieve social/political sustainability.

The road to the future could be smoothed by a long term program based on CARBON PRICING and FINANCIAL TRANSITION tools. These tools (cart) must be used to address defined National goals and realistic supply considerations (horse). Change was made by many other nations following the petroleum supply “wake-up calls” of the 1970s. These proactive nations have not been dragged into making costly international security expenditures. Nor have they excessively suffered from adverse balance of payments with others linked to funding world terrorism.

A well structured CARBON PRICING and FINANCIAL TRANSITION program could promote orderly phase-in of economically beneficial, environmentally benign, CLEAN ENERGY SOURCES and CLEAN ENERGY CONVERSION TECHNOLOGIES (whatever they may be, based on predictable investment economics, NOT unpredictable subsidies granted by politicians, or casino-like roulette of the commodity market). The starting point (in the new era with no more entitlements) must be that REVENUE from any CARBON PRICING plan must be a $ for $ offset for REDUCED INCOME TAXS. This will plug using revenue for subsidies, or make-up funding for loopholes.

If the USA adopted visionary energy policy in the 1980s based on known long-term supply and prudent National interest, would things be different in 2010? Think about the alternative picture of our Nation with a world-revered treasury; and a post-Vietnam, recovered shining image. Also think about today’s foregone possibilities for achieving clean energy, even if an Apollo-like expenditure was needed. Congress can still set the stage for 15 – 25 years of real progress, instead of perpetual partisan bickering while we taxpayers pay their salaries.

Congress and the President must get on the same page to establish a National policy framework, not micromanagement of a yet-to-be-developed and long overdue program. In addition to the National framework (let’s call it NATIONAL SECURITY AND ENERGY CHIOCE OBJECTIVES), leadership must establish the legal authorization for the program: including the long-term milestones, schedule, and administrative budget. An example of this type of law is found in federal Clean Water Act at http://epw.senate.gov/water.pdf . Most of the “meat” is described in the first 25 pages of this 234-page (YES 234 PAGES) law which is mostly as it was when adopted in 1972, though periodically updated while it has continuously operated in all States and Territories. We have recently witnessed derailments resulting from excessive legislative detail by our paid political creatures who operate the presence of secretive lobbying networks.

As with the CWA, it all begins with the Congress and the President, but then it must be lawfully executed by professional policy/management overseers and staff, similar to what is done by the FDA, NTSB, FAA, National Science Foundation, National Advisory Council for Environmental Policy and Technology, Federal Financial Institutions Examination Council, etc. Congress, however, must periodically hold oversight hearings to ensure focus and progress is being made to achieve the National Objectives. Over time, legislative update and court decisions will add to the body of law. If a long-term, thoughtful process is followed, the risks and commotion of our continued reliance on 19th Century energy sources and conversion technologies, will become a distant memory.

If the 55 delegates to the Constitutional Convention could adopt the US Constitution in 1787, then the 535 serving in today’s Congress and the President should be capable taking prudent action to achieve 21st Century energy supplies and conversion technologies for the USA before China and others smother our economy.

The problem is, no one really knows where exactly the faults lie in a system and as fundamental as the truism is that ‘without knowing the problem, there can be no way to test it.’

Having said this, extensions of the cap and trade system and its continued use will allow us to (and pardon the expression) give the system a whack and a shake and see what falls out.

A weakness of carbon taxes is who administers the system and how the money gets spent. As we have seen in the U.S. gov’t is being blocked by the Republicans. In Canada the gov’t is not interested in taking any action in attempts to placate their base and businesses dependent on fossil fuels.

While it is definite action and a starting point, I believe that US$ 11.50 a ton is far too low. Even Alberta’s C$ 15 per ton is far too low to be effective or realistic.