Climate Billionaire Elon Musk Quits Donald Trump’s Advisory Council

musk
AP Photo/Mark Lennihan

Climate-change billionaire Elon Musk has quit a White House advisory council after President Donald Trump announced the U.S. exit from the Paris climate agreement.

The shift in government policy likely will force Musk and his investors to revamp his sprawling business empire, which relies on government subsidies and on preferences for solar-energy over natural fuels.

For example, the Los Angeles Times reported in 2015 that Musk’s battery factory in Reno, Nevada is reported to have enjoyed roughly $1.3 billion in state subsidies, and his SolarCity company has gotten $1.5 billion from federal solar-regulations. In California, the state legislature allowed his Tesla Motors to sell more than $500 million worth of government-granted carbon energy credits, said the Los Angeles Times, and the state’s anti-pollution agency allows the owners of battery-operated cars to use low-traffic “high occupancy” lanes in gridlocked Los Angeles. Musk’s solar-energy company in New York state has reportedly gained $1 billion in near-term and short-term investment from Democratic politicians said the newspaper. 

However, those financial gains for Musk depend on higher energy taxes for the nation’s established manufacturing sectors, especially in Midwest states. Breitbart described the economic impact of the climate agreement

  1. Goodbye to ‘American Last.’ The Paris agreement was basically an attempt to halt climate change on the honor system. It’s only legal requirements were for signatories to announce goals and report progress, with no international enforcement mechanism. As a result, it was likely that the United States and wealthy European nations would have adopted and implemented severe climate change rules while many of the world’s governments would avoid doing anything that would slow their own economies. The agreement basically made the U.S. economy and Europe’s strongest economies sacrificial lambs to the cause of climate change.
  2. Industrial Carnage. The regulations necessary to implement the Paris agreement would have cost the U.S. industrial sector 1.1 million jobs, according to a study commissioned by the U.S. Chamber of Commerce. These job losses would center in cement, iron and steel, and petroleum refining. Industrial output would decline sharply.
  3. Hollowing Out Michigan, Missouri, Pennsylvania, and Ohio. The industrial carnage would have been concentrated on four states, according to the Chamber of Commerce study. Michigan’s GDP would shrink by 0.8 percent and employment would contract by 74,000 jobs. Missouri’s GDP would shrink by 1 percent. Ohio’s GDP would contract 1.2 percent. Pennsylvania’s GDP would decline by 1.8 percent and the state would lose 140,000 jobs.
  4. Smashing Small Businesses, Helping Big Business. Big businesses in America strongly backed the Paris climate deal. In fact, the backers of the climate deal reads like a “who’s who” of big American businesses: Apple, General Electric, Intel, Facebook, Google, Microsoft, Morgan Stanley, General Mills, Walmart, DuPont, Unilever, and Johnson & Johnson. These business giants can more easily cope with costly regulations than their smaller competitors and many would, in fact, find business opportunities from the changes required. But smaller businesses and traditional start-ups would likely be hurt by the increased costs of compliance and rising energy costs.
  5. Making America Poorer Again.  A Heritage Foundation study found that the Paris agreement would have increased the electricity costs of an American family of four by between 13 percent and 20 percent annually. It forecast a loss of income of $20,000 by 2035. In other words, American families would be paying more while making less. 
  6. Much Poorer. The overall effect of the agreement would have been to reduce U.S. GDP by over $2.5 trillion and eliminate 400,000 jobs by 2035, according to Heritage’s study. This would exacerbate problems with government funding and deficits, make Social Security solvency more challenging, and increase reliance on government’s spending to support households.

Unsurprisingly, Musk is a strong advocate for growing “carbon taxes” on natural fuels. In a January 2017 interview with Gizmodo, Musk declared:

CO2 [carbon diooxide] isn’t exactly pollution, but it does cause warming and slight acidification of water if very large quantities are dug from deep underground and added to the surface cycle. The problem is the age-old tragedy of the commons. The common good being consumed is atmospheric and oceanic carbon capacity, which currently has a price of zero. This results in an error in market signals and far more CO2 is generated than should be. We won’t ever go to zero CO2, but the rate over time should be dropped far below what it is today.

Start low and increase it until the desired outcome is achieved. This can be offset by a reduction in other taxes, like sales tax, which is quite regressive. This is analogous to taxing cigarettes and alcohol more than fruits and vegetables, which everybody agrees makes sense. We should have higher taxes on the things that science says are probably bad for us than those that are probably good for us.

New York investors, including Goldman Sachs, have made big bets on the preservation of the Paris deal, according to The Huffington Post

 

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