New Energy Weekly – Eating Fish
My wife hates fish
Won’t eat it at all. She doesn’t care about the health benefits. No matter how delicious the sauce is, she won’t even try it.
It’s like a phobia.
However, when she was a child, she blissfully ate “Chicken of the Sea” for lunch. The key word being “chicken”, a land critter with no relationship to fins or gills.
That is until, in the heat of an argument, her older sister clued her in. When she found out that Chicken of the Sea was tuna, she never ate it again.
That speaks to the power of marketing. If we can convince ourselves that tuna is chicken, it becomes much more palatable to a wider audience.
A congressmember is having a Chicken of Sea moment right now. And it’s great.
Louisiana Senator Bill Cassidy of Louisiana is a Republican who has a National Environmental scorecard rating of 9% (that’s very low). He consistently voted against climate and environmental legislation…until now.
He recently proposed a bill called the Foreign Pollution Fee Act. It’s basically a series of taxes (tariffs) on the imports of industrial goods based on their greenhouse gas intensity. The taxes are calculated as a percentage of value, rather than a flat fee.
What’s interesting is that analysts view this as a big step towards figuring out the carbon price.
This bill turns tuna into chicken of the sea for republicans who don’t want to simply support climate legislation. That’s because it offers a market-based way to balance the scales on industrial goods.
Basically, if you make steel in the U.S., you must meet a lot of environmental requirements that make the steel cost more than if you made it in say China or Vietnam. By adding a tax to level, the playing field, it makes U.S. manufacturing more competitive.
That’s good for Louisiana, which hosts many industries affected by foreign competition.
But the way they determine the fees sets a bar for the cost of carbon. And that’s a huge step towards monetizing carbon emissions. As this bill moves along the process, we will need to watch it closely. We want to see who supports the bill. Which other industrial state republicans sign on. If it becomes law, it will establish the price of carbon, which will open the floodgates for many companies to buy and sell those credits.
And that’s an opportunity for investors.
Have a great week and Happy Thanksgiving!
The Mangrove Investor Team
PS: Due to the Holiday next week and our anticipated food coma, we won’t be publishing a weekly update. The weekly updates will resume in early December