Enron Invented Cap and Trade


“Christopher C. Horner, author of the book ‘Red Hot Lies: How Global Warming Alarmists Use Threats, Fraud and Deception to Keep You Misinformed’ noted that it was Enron that invented the concept of cap and trade and then profited off it until it collapsed in disgrace. He said that Waxman-Markey would bring about ‘Soviet-style planning.'”

— From “Hoosier GOP Sound Alarm Over Cap & Trade” by Brian A. Howey, editor of the Howey Politics Indiana blog, May 27, 2009.


Let’s set aside the fact that Christopher Horner is a senior fellow at the Competitive Enterprise Institute, which has received more than $2 million in funding over the last decade from ExxonMobil, arguably the number one corporate opponent of any climate action over the last 20 years.

Let’s also set aside the fact that Christopher Horner is also counsel to the Cooler Heads Coalition, a global warming skeptics group that exists for the express purpose of questioning global warming science and blocking climate action.

Let’s deal with the claim straight up.

Enron did not invent cap and trade. Not by any stretch of the imagination.

For one thing, Enron didn’t exist until the late 1980s after the merger of InterNorth and Houston Natural Gas. By that time, the concept of cap and trade as a policy to cut pollution had been debated for more than a decade.

Cap and trade was later codified in U.S. law in the 1990 Clean Air Act to reduce America’s acid rain pollution. The Economist crowned the acid rain cap and trade policy “probably the greatest green success story of the past decade.” (July 6, 2002).

EDF played a leading role in promoting the acid rain pollution cap, and take it from us Enron played no role in the debate what-so-ever.

As for “Soviet-style planning” – the dictionary defines HYPERBOLE as an “obvious and intentional exaggeration.” Perhaps we should amend it to include Mr. Horner’s statement.

Mr. Horner either doesn’t know what he’s talking about or is dissembling. Far from a command and control program, cap and trade is a market-based policy designed to unleash investments in the clean energy economy. By definition, it is the opposite of letting the government pick winners and losers.

In fact, the first President Bush — not exactly a promoter of Soviet style economics — signed the 1990 cap and trade law because it was a centrist, efficient way to effectively cut pollution. And it still is.

There is much to debate when it comes to how to solve global warming. We welcome Mr. Horner to the debate, but would urge him to do his homework and get his facts straight.

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