Brilliant Jon!

"...if cap-and-trade legislation was passed along with funding to build the wind and solar systems needed to replace the coal plants (and the attendant electrical grid upgrades), then nobody would be worse off."

If the money that industry payed at auction for carbon permits were applied directly to building wind and solar in the areas that will be hit by the cost, passed on by industry (multiplied by the inflation all the way up the supply chain), then the cost to the regional economy would be offset.  And actually improved as lower renewable power rates kicked in.

The trick is to take money from the old energy economy and use it to start the new one up.  Industry seems to prefer cap n trade, I think they see a way of weaseling out of any big changes that way.  pass on costs, do business as usual.  Blame the green politicians next election time.

I can see the "clean" coal industry ad now:  "Sen "Green" made us raise your power rates, we didn't want to do it.  Send Sen. "Green" a message this election day."

http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

The problem right now (and this is partially in answer to your post) is that nobody wants to make the recession worse, including in the executive branch.  Obama is no less worried about this than Congress, so I don't see him imposing something (but who knows).

So if anything comes along, like a cap-and-trade system, that costs money, upfront, I don't see any political will for that.  I do see political will for public works, for spending money on something that will create jobs -- and helping industries become more efficient should create jobs, no?

By the way, I totally agree that people don't understand the need for manufacturing and how various industries fit into a well-functioning economy.  As I think we've discussed before, there is a basic lack of "industrial literacy" in this country.

So they'll pay more, therefore their electricity will cost more, therefore Sherrod Brown will oppose cap-and-trade.  Unless they get money from the Feds to put up replacements for coal plants, no?

Do not assume that the ratio of fossil fuel:electricity is fixed, or perfect.  It is in fact far higher than it needs to be right now and would fall dramatically in a world where we acted like we gave a sh*t about the cost or environmental impacts of power.  (A point we can make ably to Sherrod Brown & others.)  

So as you start to increase that efficiency, you end up as a net winner under a sensibly defined GHG plan (in the sense that a sensibly defined plan would provide incentives to burn less fossil fuel, however structured.)  The only question then becomes where the biggest impacts are for enhanced efficiency - which leads to a net economic gain (profit, not cost per tonne of CO2 reduction) - as opposed to more expensive fuel switching and/or standard of living curtailment which have costs per tonne.  

Those opportunities are, to a significant degree, concentrated in the rust belt.  They are also concentrated in the power sector, but only at a macro level.  (e.g., there will certainly be losers: namely, those who insist on clinging to expensive, inefficient power).  But so long as the result is to drive down the overall fossil-fuel intensivity of the power sector, the overall sector wins.

This is a really key point - far too often, we confuse wealth transfers with economic pain.  They not only aren't the same thing, but are also the opposite thing.  A GHG bill that allows bilateral trades and cuts gov't out of the process will incentivize massive reductions in fossil fuel combustion - and therefore, massive reductions in our expenses to pay for that fuel.  That's a good thing economically and environmentally, even if it does mean that our coal miners get a little less money along with inefficient coal plants.  But that is, after all, how economies move forward.  Not by guaranteeing that all shall win, but simply by providing an opportunity that allows for more winners than losers.

"... a green national infrastructure bank) to set up the kinds of industries Jon talks about above?"

I liked Jon's idea because it would tie green investment in areas affected by the permit auction to the actual revenues collected.

But since banks need to be nationalized to some extent anyway, why not designate a few regional banks, under government control, to use funds collected with subsidy diversion (the plan I favor) or cap and trade or carbon tax to invest in green infrastruicture?  

It would be a way to hold someone responsible for the funds.  Have the books open to the public to make sure local jobs are created to offset temporarily higher electric rates.  That would bring the power rates in that area down as renewables and conservation take hold.

Any region with a lot of coal power will suffer somewhat from any carbon pricing regime, even subsidy diversion.  Costs will always be passed on to ratepayers.  But maybe we would be willing to pay 3 cents per kwh more than the going rate if it helped our regional economy with green jobs and investment.  Like rooftop solar and ground source heating/cooling system loans at low rates for homeowners?  Or biogas digestor and wind power loans for farmers.  And maybe even smart grid upgrade loans for local utilities.

Maybe even low rate car loans to buy plugin hybrids?  Eureka!

It could be a very effective plan.

http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin

It looks like the Obama troops are going to be on the march again Colin, just got an email.

My guess is we will be drumming up supporters to call and email their legislators to get things going through congress.  We will have to convince the politicians that by blocking Obama's initiatives they "...will DESTROY THE ECONOMY!"

And we will be there to remind voters come next election time how they voted.  

One good thing about GOP obstructionism, now that they have refused any of their support why give them any tax breaks for the wealthy and corporations?

A recent revelation came across the teevee, via Moody's Investor Service research.  they found that each tax dollar spent on tax breaks for the wealthy stimulates the economy $1.03, a 3 cent net stimulus per dollar.   Tax breaks for corporations stimulate the economy 30 cents per dollar, for a loss of 70 cents.

Infrastructure spending produces $1.59 for each dollar spent by government.  A 59 cent surplus per dollar invested.

This will be a good meme for the Obama grassroots team.  Join up now!  I'm looking forward to targeting the district of that Wisconsin congressman that dissed Obama's plan today in the mass media with plenty of calls to Obama supporters.

http://amazngdrx.blogharbor.com/blog John Schneider, Northern Wisconsin