Formatting Test

Permits create cartels who drive up prices

Ross McKitrick Associate Professor and Director Graduate Studies Department of Economics University of Guelph, Ph.D. in economics from the University of British Columbia, Committee on House Energy and Commerce Subcommittee on Energy and Air Quality June 26, 2008

-- Cap-and-trade programs are more damaging to the economy than emission taxes. Capand- trade creates a cartel among the permit holders, allowing them to force up consumer prices and earn windfall profits. One study found that reducing US greenhouse gas emissions by 5% using cap-and-trade would cost 10 times as much as using a revenueneutral carbon tax. -- The monetary value of permits trading systems is not new wealth, it is a measure of the wealth transfers created by the policy. When industry leaders lobby for a cap-and-trade system, they are asking the government to create a highly profitable industry cartel that would be illegal for them to create themselves.