The Big Business of Blocking Entry

...

It is likely that many viewers interpret the alleged growing corporate advocacy of actions to limit carbon admissions as prima facia evidence of the basic validity of Gore's alarmism. Would business be willing to acquiesce to harmful regulation if corporate leaders were not persuaded that a real emergency exists?

Ms. Easton, and most viewers, likely fail to perceive that businesses are illustrating Nobel Prize winning economist George Stigler's 1971 theory of government regulation.* Incumbent businesses seek legislation impeding the entry of competitors into their product markets.

Suppose, for example, petroleum refining is the main activity of an American corporation. This corporation cannot obtain legislation to outlaw the expansion of the petroleum refining industry, especially in the face of rising gasoline prices grieving the American public.

However, if citing a new refinery, or expanding a competitor's existing one, involves an increase in the emission of carbon dioxide, which it almost certainly would, then a cap on carbon emissions will covertly serve the same purpose. In a March 6 article in TCS Daily, Arnold Kling explains that "cap and trade" legislation is being proposed as a method of limiting carbon dioxide emissions - a method that would exempt some or all of the existing levels of emissions from present-day refineries by capping them. Permits licensing some or all emissions at the enactment date's levels would be given to established firms which could then sell them to other firms. What that legislation would do, in addition to providing a valuable permit windfall, is make it more costly for competitors to expand their refining capacity or to enter the refining industry at all.

...

TSC Daily article