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IS CAP AND TRADE ENOUGH? (NO.)
This gets a bit wonky, but Dave Roberts has a good post explaining why cap and trade -- or a carbon tax -- may not be enough to really move us over to renewable energy. Simply slapping a price on carbon might be a sufficient answer if the only failure in the market was that carbon sat lonely and unpriced. But it's not. Roberts explains.
COMMENTS (26)
"CAP AND TRADE" infuriates me. A carbon tax (with a corresponding payout for removing co2 from the air) is far superior but the politicians prefer "CAP AND TRADE" because the tax in more hidden. IMO we will be better off with nothing for now than implementing "CAP AND TRADE". Watch congress turn CAP AND TRADE into pork and payola.
Posted by: Floccina | May 12, 2009 11:00 AM
It's not a good post at all. He describes a supposed regulatory failure as a market failure. He also doesn't think very hard about industrial consumer response to the strategy he says utilities would take.
Posted by: Thomas | May 12, 2009 11:59 AM
There's something confusing about this line of reasoning. Cap and trade will get us the required amount of carbon reduction because it limits carbon emissions. Other, complimentary strategies that he mentions would get us the same amount of carbon emissions. Is he saying that his plan will make the transition cheaper somehow?
I don't know about all of his suggestions, but it seems like some of them, like the renewable portfolio standard, seem like aesthetics: it's not enough that we reduce emissions; he cares how we do it too.
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Posted by: sesli sohbet | September 8, 2009 2:56 AM
My only disagreement with your post is the implicit assertion that an RPS leads to the lowest cost CO2 reduction. Properly crafted, it might - but so long as it's biased in favor of solar + wind, that's not precisely the case. Not to say that those don't have value in their own rights of course, just that they're far from the lowest-cost approach to CO2 reduction. liposuction
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Successful cap and trade programs reward innovation, efficiency, and early action and provide strict environmental accountability without inhibiting economic growth.
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