EDITORIAL: The rise of the carbon oligarchs

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Washington is enjoying one of the mildest summers in memory. The irony should not be lost as the Senate grapples with the Waxman-Markey "cap-and-trade" bill, which is supposed to address global warming.

This colossal reordering of America's energy-and-manufacturing sector was supposed to be a response to a crisis of increasing global temperatures. However, as Deroy Murdock explains on the facing page, the globe has not warmed for more than a decade, and it actually has been cooling for the past few years. This inconvenient truth is the reason the alarmists have been forced to dump the expression "global warming" in favor of the nondescript and less compelling "climate change."

Yet even as the premises underlying the global-warming argument are destroyed, Congress races ahead with a job-killing, growth-limiting bill that would raise energy costs for every American and impose crushing competitive disadvantages in the global marketplace.

If passed, the cap-and-trade bill will centralize an inordinate amount of power in Washington and generate vast fortunes for people with friends in high places. On the "cap" side, 85 percent of the "carbon credits" will be given away to power generators; oil and natural gas concerns; the auto industry; various energy-intensive industries such as cement, glass and paper manufacturers; and a variety of "carbon-capture," deforestation-prevention and other dubious special interests.

Because the credits will be distributed by the government, the key question is who will decide who gets them. As we have seen recently with the stimulus bill, Troubled Asset Relief Program (TARP) bailouts, the automotive fiasco and the federal budget generally, only those with friends in high places will have a place at the trough. Those with pull will profit; those without will be run out of business.

On the "trade" side, influence peddling will focus on the question of "carbon offsets." A number of sticky questions have arisen, such as whether farmers can claim offsets for the plants they plant, or paper companies for the trees they grow. Perhaps homeowners should get credit for their lawns. Ultimately, the number, type and -- most important -- market value of the so-called offsets will be determined in Washington, which places more power in the hands of politicians and their cronies.

The bill is reminiscent of the voucher systems used by former communist states to "privatize" industries formerly owned by the state. The vouchers quickly accumulated in the hands of a few connected power brokers who became instant billionaires. Under cap-and-trade, we will soon see the rise of the carbon oligarchs. These people will make vast fortunes on this legislation by trading influence and rule-making that benefits them at the expense of the rest of us. These energy brokers and carbon-offset middlemen will produce nothing and make no contributions to society but will become rich based on political preference and other insider influence.

The Waxman-Markey bill has a number of fatal flaws and is a panic-stricken response to a problem that does not exist. We hope the Senate will kill this unnecessary bill that would create more havoc in our already faltering economy.