Environment Forum

Chevron CEO sees smoke and mirrors in cap and trade

“If you liked credit derivatives swaps, you’re going to love cap-and-trade.”

One can presume that Chevron Chief Executive David O’Reilly is not a fan of the current deep worldwide recession — which was worsened by a credit-market lockup blamed in part on hard-to-value securities.

And, he made it very clear on Thursday that he is not enamored of the system the Obama administration hopes to use to reduce U.S. emissions of greenhouse gases including carbon dioxide, which are produced through the burning of fossil fuels sold by the No. 2 U.S. oil and gas company.

“It’s smoke and mirrors,” O’Reilly told a Boston business group. “Personally, I think it’s going to be a difficult system. I don’t think the American people trust it.”

A proposal working its way through the U.S. Congress would put in a place a cap-and-trade system that would give individual U.S. companies the right to emit certain quantities of greenhouse gases, which contribute to global climate change. Companies whose emissions are below their allotment could sell their extra rights to other companies.

The Obama administration in its budget proposal released on Thursday called for the initial emissions permits to be sold, rather than given away free. That would give businesses a financial incentive to reduce their emissions.

O’Reilly argued that an easier way to reduce emissions would be to raise taxes paid on gasoline for cars. He said Washington has embraced cap-and-trade to avoid the appearance of raising taxes.

Do green jobs cannibalize other jobs?

President Obama has promised to help create millions of new green jobs, saying that doing so will spur the U.S. economy toward recovery — and has held out Spain as having “surged ahead” of the rest of the world by investing in renewable energy.

But a new study of Spain’s renewable energy initiatives has found that creating green jobs actually destroys jobs in other sectors — and  most of the time doesn’t lead to permanent employment.

The study, which was directed by an economics professor at Juan Carlos University of Madrid, found that every green job created by the Spanish government destroyed an average of 2.2 other jobs, and that only 1 in 10 were permanent.

“Spain’s experience cited by President Obama as a model reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created,”  the professor, Gabriel Calzada, wrote in an introduction to the study.

“The study’s results demonstrate how such ‘green jobs’ policy clearly hinders Spain’s way out of the current economic crisis, even while U.S. politicians insist that rushing into such a scheme will ease their own emergence from the turmoil,” Calzada wrote.

Conservative bloggers have seized on the study to show that Obama’s green energy push will cost the U.S. some 6 million jobs — although others have injected a note of skepticism.