I have a short essay in the Italian journal/magazine Formiche on the challenges facing successful implementation of efforts to use carbon pricing — such as in a cap and trade regime — as the primary policy tool to reduce carbon dioxide emissions. The Italian version can be found here (PDF) and the original English here (PDF). In short, I think that such policies are doomed to fail.

Here is an excerpt:

Putting a price on carbon means that the costs of carbon-producing energy sources will increase. That is of course precisely the point. Cost increases will necessarily cause economic discomfort and perhaps some degree of pain among consumers of energy. Such discomfort and pain, the argument continues, will be the necessity that mothers the invention of carbon neutral energy sources which will then displace the carbon producing energy that we rely on today. This sounds wonderful, which is why it is the basis of recommendations found in august reports such as the Stern Review Report from the United Kingdom and those of the Intergovernmental Panel on Climate Change, which last year shared the Nobel Peace Prize with Al Gore.

But as Thomas Henry Huxley once observed, our knowledge is littered with beautiful theories killed by inconvenient facts, and we should add to that list the notion of the emissions-reducing effectiveness of putting a price on carbon. This uncomfortable reality stems from the very fact that putting a price on carbon causes economic pain and discomfort to energy consumers, who also happen to be citizens and often, also voters. Politicians who want to continue in their jobs spend every waking hour trying to avoid economic discomfort or pain among their constituents, much less cause it intentionally. To think that politicians are going to willingly impose discomfort or pain on their constituents is fanciful at best.

More here in PDF. It was written last November soon after the election. If anyone is interesting in publishing an updated version in English, please contact me at pielke@colorado.edu.