Carbon Tax vs. Cap and Trade
I don't believe man-made global warming is substantial enough or catastrophic enough in its effects to warrant expensive public action. But if we did feel the need to do something, John Tierney echoes a theme I have been sounding for a while (emphasis added):
The CBO report concludes that a tax on carbon emissions "would be
the most efficient incentive-based option for reducing emissions and
could be relatively easy to implement. If it was coordinated among
major emitting countries, it would help minimize the cost of achieving
a global target for emissions by providing consistent incentives for
reducing emissions around the world." But the major presidential
candidates aren't supporting such a tax, and the few proposals on
Capitol Hill to impose a tax are not expected to go anywhere anytime
soon.Instead, the candidates and most legislators prefer to talk about
cap-and-trade schemes like the Kyoto protocol. These schemes have the
great political advantage of hiding the costs from consumers and
voters, but they cost more and accomplish less. The CBO calculates that
the net benefits of a tax would be five times higher than for a
cap-and-trade with inflexible targets. A more flexible cap-and-trade
system wouldn't be quite as bad a deal economically, but it would
create all sorts of political temptations for doling out exemptions and
subsidies to well-connected industries and companies.
