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Cap and Trade Affirmative

Cap and Trade Affirmative

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10/16/2011

1. Competitiveness outweighs bizcon – a few companies freaking out are
irrelevant compared to losing major market share to Europe and Japan, which
spills over to every other industry – that’s Kammen.

2. States turn competitiveness – they’ll implement multiple conflicting
measures which create an uncertain environment for development – uniform
implenetation ensures predictability. That’s Stavros.

3. Businesses want to establish carbon caps. That’s Punk.

BusinessWeek, 8/16/0 4 , “Global Warming”, http://www.businessweek.com/magazine/content/04_33/b3896001_mz001.htm

Remarkably, business is far ahead of Congress and the White House. Some CEOs are already calling for once-unthinkable
steps. "We accept that the science on global warming is overwhelming," says John W. Rowe, chairman and CEO of Exelon
Corp. (EXC ) "There should be mandatory carbon constraints." Exelon, of course, would likely benefit as the nation's largest
operator of commercial nuclear power plants. But many other companies also are planning for that future. American Electric
Power Co. (AEP ) once fought the idea of combating climate change. But in the late 1990s, then-CEO E. Linn Draper Jr.
pushed for a strategy shift at the No. 1 coal-burning utility -- preparing for limits instead of denying that global warming
existed. It was a tough sell to management. Limits on carbon emissions threaten the whole idea of burning coal. But Draper
prevailed. Why? "We felt it was inevitable that we were going to live in a carbon-constrained world," says Dale E.
Heydlauff, AEP's senior vice-president for environmental affairs. Now, AEP is trying to accumulate credits for cutting CO2. It's
investing in renewable energy projects in Chile, retrofitting school buildings in Bulgaria for greater efficiency, and exploring
ways to burn coal more cleanly. Scores of other companies are also taking action -- and seeing big benefits. DuPont (DD ) has
cut its greenhouse-gas emissions by 65% since 1990, saving hundreds of millions of dollars in the process. Alcoa Inc. (AA ) is
aiming at a 25% cut by 2010. General Electric Co. (GE ) is anticipating growing markets for its wind power division and for
more energy-efficient appliances. And General Motors Corp. (GM ) is spending millions to develop hydrogen-powered cars
that don't emit CO2. A low-carbon economy "could really change our industry," says Fred Sciance, manager of GM's global
climate issues team. As Exelon knows, the need for carbon-free power could even mean a boost for advanced nuclear reactors,
which produce electricity without any greenhouse-gas emissions.
Global warming could change other industries, too. Even if the world manages to make big cuts in emissions soon, the earth
will still warm several more degrees in coming decades, most climate scientists believe. That could slash agricultural yields,
raise sea levels, and bring more extreme weather . For businesses, this presents threats -- and opportunities. Insurers may face
more floods, storms, and other disasters. Farmers must adjust crops to changing climates. Companies that pioneer low-emission
cars, clean coal-burning technology, and hardier crop plants -- or find cheap ways to slash emissions -- will take over from
those that can't move as fast. "There is no silver bullet," says Chris Mottershead, distinguished adviser at BP PLC (BP ): "There
is a suite of technologies that are required, and we need to unleash the talent inside business" to develop them. Are we ready for
this carbon-constrained, warming world? In some ways, yes. "There is a case to be made for cautious optimism, that we are
making small steps," says BP's Mottershead. Indeed, there is surprising consensus about the policies needed to spur innovation
and fight global warming. The basic idea: mandatory reductions or taxes on carbon emissions, combined with a worldwide
emissions-trading program. Here's how it could work: Imagine that each company in a particular sector is required to cut
emissions by 20%. The company could meet the target on its own by becoming more energy efficient or by switching from
fossil fuels to alternatives. But it could also simply buy the needed reductions on the open market from others who have
already cut emissions more than required, and who thus have excess emissions to sell. Under a sophisticated worldwide
carbon-trading system, governments and companies could also get sellable credits for planting trees to soak up carbon or for
investing in, say, energy efficient and low-carbon technologies in the developing world. As a result, there is a powerful
incentive for everyone to find the lowest-cost and most effective cuts -- and to move to lower-carbon technologies.A key
element is long-term predictability. If the world sets goals for the next 50 years, as Britain has done, and then implements the
curbs or taxes needed to reach them, companies will figure out solutions.

88

Cap–and–Trade AFF
DDI 2008
Alyssa, Daniel, Krishnan, Sarah, Will

AT – Biz Con DA

4. Failure for the US to comply with Kyoto causes the EU to sanction the US
and force protectionism, crushing confidence.

Peter Fontaine, Environmental Attorney, August 200 4 , “The Gathering Storm”, Public Utilities Fortnightly,
http://www.pur.com/pubs/4419.cfm

There is little question that CO2 reduction measures will increase the cost of energy in the EU, Japan, and the other industrialized
nations that have ratified Kyoto. As a result, Annex I countries that have not undertaken comparable measures to reduce greenhouse
gas emissions, including the United States, Canada, and Australia, will enjoy a competitive advantage in the form of lower energy
costs and, in turn, lower costs of production. A fundamental impact of Kyoto therefore will be a global imbalance in the costs of
production among the United States, Australia, and virtually the rest of the industrialized world. This imbalance will prompt the EU to
seriously examine the option of imposing some form of countervailing duty on U.S. imports to compensate for the disadvantage and to
fund additional CO2 offset projects under the CDM mechanism.
The EU clearly is concerned about the potential for competitive harm associated with the recent greenhouse gas emissions program,
noting that EU emissions allowance trading scheme (ETS) "has the potential to lead to even further increases in power prices that
could cause significant damage to EU competitiveness, especially for energy intensive industries such as pulp and paper, iron and
steel, cement and lime, chemicals and others. ... It is essential that this situation be monitored and actions taken if these industries
become disadvantaged."7

Several non-governmental organizations also have advocated for trade sanctions against the United States,
arguing that: Until the U.S. ratifies and implements the Kyoto Protocol, there cannot be fair and free trade with the U.S. and the U.S.
will be in clear violation of the WTO Agreement on Subsidies and Countervailing Measures.8

Recent WTO Successes Against the U.S.
Nor is there any reason to question that the EU will use trade sanctions as a hammer when it finds that the U.S. has garnered an unfair
competitive advantage by subsidizing exports. Two recent examples, the sales corporation/extraterritorial income (FSC/ETI) and the
steel import cases, demonstrate that the EU will use trade sanctions when necessary to force a change in U.S. behavior. In both cases,
the EU successfully implemented countervailing duties of several billion dollars that were upheld by the WTO Appellate Body. In
both cases, the United States underestimated the EU's resolve to impose trade sanctions, and the sanctions prompted the United States
to act quickly to remove the subsidies.9

5. Loss of competitiveness spills over into every sector of the economy, and
causes a collapse

Connolly 200 2 (Bernard| Chief Global Strategist, AIG| Dark Vision for the World Economy|
http://www.usagold.com/gildedopinion/Connolly.html|

But as capital accumulation proceeds, the rate of return on capital gradually subsides back towards its starting point, even if the
process takes several years. As it does, business investment does not just decelerate -- it falls in absolute terms. A similar story can be
told about consumer investment -- residential construction and purchases of consumer durables. As domestic demand falls back, net
exports need to rise to fill the gap, a gap made bigger by the increase in capacity produced by the preceding years of strong
investment. But, by definition, the exchange rate cannot adjust to aid this process. Instead, the lagged effects of past overheating,
showing up in inflation, actually worsen international competitiveness. With domestic demand falling and competitiveness worsening
simultaneously, the economy goes into a tailspin. Unemployment rises; inflation begins to fall back, even though for some time it
remains above levels in competitor countries. Since nominal interest rates are set outside the domestic economy, falling inflation
pushes real interest rates up while the rate of return on capital is coming down -- this combination produces falling asset prices,
worsening the decline in domestic demand. To re-balance the economy, domestic inflation has to fall below that in other countries
under the influence of recession and rising unemployment. But the process of disinflation (perhaps even deflation) constantly pushes
real interest rates up. Worse, asset deflation weakens balance sheets, including the government's. Bankruptcy and default, including
government default, become real possibilities. Credit spreads widen, exacerbating the problem of excessively high real interest rates.
Asset markets weaken further. The circle is vicious indeed. If nothing is done to break into it, the outcome will be not just economic
and financial collapse but social and political chaos.

89

Cap–and–Trade AFF
DDI 2008
Alyssa, Daniel, Krishnan, Sarah, Will

AT – Biz Con DA

6. Our advantage is comparative – short-term effects of a cap-and-trade are
miniscule, and the effects of global warming are far worse. That’s Environment
Protection.

7. Businesses/corporate leaders want to invest now and a binding target works
better

Environmental defense 200 4 “The Heat is on: a White paper on climate action”
http://www.edf.org/documents/3777_TheHeatIsOn.pdf

Delaying action now will cause more serious economic disruptions later. The bottom line is that businesses abhor uncertainty.
Many corporate leaders are convinced that the United States will eventually have to join in fighting global warming, and would
prefer to begin making capital investments now than waiting until the last minute , when the job will be more expensive.
Some corporate leaders are also worried that without binding targets, American companies will have less incentive to develop
technologies to reduce global warming gases, thereby ceding a lucrative emerging market to their European and Japanese
competitors.

90

Cap–and–Trade AFF
DDI 2008
Alyssa, Daniel, Krishnan, Sarah, Will

AT – EU Relations DA

EU angry at US for lack of energy policy

Ewen MacAskill, Guardian’s DC bureau chief, diplomatic editor, chief political correspondent, 9/29/07,
“Europeans angry after Bush climate speech 'charade'”
http://www.guardian.co.uk/environment/2007/sep/29/usnews.climatechange

George Bush was castigated by European diplomats and found himself isolated yesterday after a special conference on climate
change ended without any progress. European ministers, diplomats and officials attending the Washington conference were
scathing, particularly in private, over Mr Bush's failure once again to commit to binding action on climate change. Although
the US and Britain have been at odds over the environment since the early days of the Bush administration, the gap has never
been as wide as yesterday. Britain and almost all other European countries, including Germany and France, want mandatory
targets for reducing greenhouse emissions. Mr Bush, while talking yesterday about a "new approach" and "a historic
undertaking", remains totally opposed. The conference, attended by more than 20 countries, including China, India, Britain,
France and Germany, broke up with the US isolated, according to non-Americans attending. One of those present said even
China and India, two of the biggest polluters, accepted that the voluntary approach proposed by the US was untenable and
favoured binding measures, even though they disagreed with the Europeans over how this would be achieved. A senior
European diplomat attending the conference, speaking on condition of anonymity, said the meeting confirmed European
suspicions that it had been intended by Mr Bush as a spoiler for a major UN conference on climate change in Bali in December.
"It was a total charade and has been exposed as a charade," the diplomat said. "I have never heard a more humiliating speech
by a major leader. He [Mr Bush] was trying to present himself as a leader while showing no sign of leadership. It was a total
failure."

EU Angry at Bush

Roger Harrabin, British journalist and environmental analyst, 9/29/07 “Critics angry at Bush climate plan”,
http://news.bbc.co.uk/go/pr/fr/-/2/hi/americas/7019346.stm

US President George W Bush infuriated his critics by professing world leadership on climate change at his meeting of the top
16 world economies - while offering no new substantive policy and implicitly rejecting binding emissions controls. Mr Bush,
who has been sceptical of climate change, said at the forum in Washington that our understanding of the science had moved on.
He agreed that energy security and climate change were major challenges and pledged to solve both problems - but dismissed
notions of despair. The American president said clean technologies like nuclear power and clean coal would protect the
economy as well as the environment. He said the US wanted to work with the United Nations towards a long-term goal on
greenhouse gases. Delegates upset He also proposed a new global fund from the US, Japan and Europe to channel clean
technology to developing countries. But some visiting delegates were outraged by what they said was a stream of spin running
through the speech. One (who understandably asked not to be named) said: "This is a total charade. "The president has said he
will lead on climate change but he won't agree binding emissions, while other nations will. "He says he will lead on technology
but then he asks other countries to contribute funds, without saying how much he'll contribute himself. "It's humiliating for him
- a total humiliation."

91

Cap–and–Trade AFF
DDI 2008
Alyssa, Daniel, Krishnan, Sarah, Will

AT – EU Relations DA

US refusing to sign Kyoto hurts relations

BBC news 2/13/05, “Campaigners Target US over Kyoto”, http://news.bbc.co.uk/go/pr/fr/-
/2/hi/uk_news/4259569.stm

The protocol, agreed in 1997, sets legally-binding emissions reductions. Nearly 180 nations have signed up, but some have not
yet formally ratified it. It binds industrialised nations to reduce worldwide emissions of greenhouse gases by an average of
5.2% below their 1990 levels over the next decade. The treaty nearly stalled after the US, which created 36% of emissions in
1990, pulled out. The protocol needed to be ratified by countries who were responsible for at least 55% of the world's carbon
emissions in 1990 to come into force. However, in 2004 Russia agreed to sign up, allowing that requirement to be met. Phil
Thornhill, of the Campaign Against Climate Change, which organised the march, said: "We want to express just how aghast we
are the US is not joining the rest of the world."Scientists say we have about 10 years to save the environment, we really have to
change the rate at which we act."Green MEP Caroline Lucas said it was time to get tough with Washington. "By refusing to
sign up to Kyoto, the US is demonstrating - yet again - that it is a rogue state pursuing its perceived national self-interest to the
exclusion of the peoples of the rest of the world."This is unacceptable and the world community must now look at ways of
holding the US accountable for damage its isolationist policies are inflicting on the rest of the world," she added. Friends of the
Earth director Tony Juniper said: "We are here to protest against the Bush administration and celebrate the fact Kyoto will
come into force this week, despite the Bush administration trying its hardest to kill it."

The New EU system hurts relations

Dan Hamilton, director for the Center for Transatlantic relations, 1/16/08, California and its allies join forces
with Europe to break the Bush administration's intransigence on aviation emissions

The new EU system, slated to go into effect in 2012, would cap carbon dioxide emissions for European and foreign airplanes
alike, while allowing airlines to buy and sell pollution credits on the EU carbon market. The initiative is yet another signal of
EU determination to tackle the climate change issue. EU governments agreed last spring to cut their greenhouse gas emissions
by as much as 30% by 2020. Not surprisingly, Europe’s airline industry is critical of these demands. While it has resigned
itself to the prospect that some EU airline emissions scheme is inevitable, it warns about higher costs to passengers and makes
the point that the EU could reduce emissions 12% simply by putting its single market under a single sky of air traffic control.
There are some big holes in the plan – big enough for an Airbus to fly through. Cost estimates vary wildly. Other pollutant
emissions from airplanes – water vapour, contrails or nitrogen oxides – are not included. The cost implications for travellers are
uncertain, but could result in fare increases ranging from 3 to 15 percent. The plan could undermine a groundbreaking US-EU
deal to open transatlantic skies that promises roughly $7 billion worth of cost reductions and a boost in transatlantic travel by
up to 24%. The pollution credit scheme could mean windfall profits for some companies and major losses for others. It is a
unilateral approach to a global problem. Undaunted, EU activists are pressing ahead, and have found American allies – not in
Washington, but in California and a host of other states. The states have petitioned the EPA to impose a cap-and-trade system,
similar to that of the EU, on domestic and foreign aircraft departing or landing at American airports. This European-
Californian pincer movement has raised the stakes in the battle both parties have been having with the Bush administration
over global environmental regulation. The Bush administration believes the EU scheme will prove unworkable, and has
rejected such a system at home. It places its hopes on technology innovation and improved air traffic management and
infrastructure. Federal officials have warned the Europeans that they risk breaking international law if they force non-European
airlines into their system. The United States engineered an agreement among the majority of countries in the International Civil
Aviation Organization, aviation's global rule-making body, against any unilateral actions – but that only energized the EU to
press ahead. If the EU proceeds along its current path, the United States will almost certainly charge the EU with unfair trade
practices before the World Trade Organization.

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