March 14, 2009

An expensive approach to climate change | Cap and binge | The Economist

An expensive approach to climate change | Cap and binge | The Economist

The Economist has some problems with President Obama's cap and trade plan. So do I.

C&T will be an overly expensive way to reduce greenhouse gases and as I have posted previously, if public policy evolves to reducing carbon in the unproven belief that the climate can be changed, let that play out with a tax on the end users of products and services with a 'carbon content.' Let consumers know what they are paying for, rather than masking the 'carbon cost' in energy and product price increases brought on by C&T.

If public policy is established is to reduce carbon emissions, the government should be willing to take the heat directly via proposing and defending a tax rather than forcing the public to blame providers and moan about higher prices. The politicians should be willing to stand up and defend the tax. C&T is nothing but a tax disguised as a market mechanism.

Some quotes from The Economist piece:

..."But fighting climate change will be costly. It will involve swapping cheap but dirty fuels for cleaner but dearer ones, as Congress intends, as well as building lots of expensive new power plants to replace older, more polluting ones. That in turn will lead to higher electricity and fuel prices. Despite the president’s airy talk of green jobs, cutting emissions, by almost all calculations, will increase costs for most businesses and families. Those extra costs must be kept to a minimum.

....The main effect of these schemes would be to raise the costs of cutting emissions. Much of the money doled out by the government would inevitably be wasted, adding to the overall bill for fighting climate change. Worse, such measures would risk distorting the carbon market, steering private capital as well as public money away from the cheapest technologies and towards those that have caught the eye of the politicians...."
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