FT Declares Cap and Trade DOA
January 20th, 2009Posted by: Roger Pielke, Jr.
Today’s Financial Times says what everyone already should know about the fate of cap and trade under Obama:
it seems clear that some things, most notably any serious steps to tackle global warming and sharp increases in long-term public investment, will have to be postponed for at least a year and possibly much longer.
For “cap and trade”, the writing was already on the wall last October when the Senate voted heavily against the relatively modest Lieberman-Warner bill to control emissions. A few months earlier and it could well have passed.
Given the short-term contractionary effects of imposing an indirect tax on carbon, it will now almost certainly be shelved.
January 20th, 2009 at 12:32 pm
Great news, if it’s true. Gives the public more time to learn about all the tradeoffs and costs. The James Hansen and AlGore types will be very disappointed, indeed. The big problem for them is that we would then have only 3 years left to save Mother Earth!
January 20th, 2009 at 2:14 pm
“Given the short-term contractionary effects of imposing an indirect tax on carbon, it will now almost certainly be shelved.”
I agree, and yes, it could be a very good thing, for several reasons, that cap and trade is dead. Several things about this sentence in particular.
1) The only reason for cap and trade schemes is to make increased energy prices look like the result of producers instead of public policy. A direct carbon tax would be more transparent and less prone to corruption and manipulation.
2) Of course any tax, direct or indirect, will have contractionary effects. Understandably, this is especially undesirable when the economy is contracting for other reasons. Moreover, there’s always a recession somewhere and on some level of the economic ladder. Unless you can convince nations, states, communities and individuals to sacrifice even in times of hardship, no meaningful mitigation will be achieved until we run out of coal, oil, natural gas, etc.
January 20th, 2009 at 4:49 pm
But EPA will soon make an endangerment finding and will then be legally bound to regulate CO2 (and other GHGs). This will happen unless Congress removes their jurisdiction over GHGs, but enviros will scream bloody murder if it tries to do that.
January 20th, 2009 at 4:55 pm
Someone should alert Chad’s officials that their apparent hopes for a killing in the “hot air” market have dimmed, and that they should now relax the coal restriction to enable their city dwellers to cook their foodstuffs.