Why I Favor Cap and Trade

Lest anyone draw the wrong conclusion from my last post, I should add that I actually favor cap and trade, for the reasons laid out here by Tyler Cowen:

1. Even if we cut government spending a lot, some taxes will have to go up. This seems like the least bad tax to raise or create, since it has some chance of producing a better outcome. It’s hard to say that about most of the other potential tax boosts. I’d also cut the tax deduction for mortgage interest, of course. That too could improve the quality of outcomes.

3. A carbon tax might lead to a new green technology, with high upfront costs and low marginal costs. Some of the rest of the world might then adopt the technology, even if those countries don’t ever adopt a carbon tax. In the short run this seems a little pie-in-the-sky, but in the longer run is it so crazy? Haven’t the Chinese adopted most of our other technological innovations?

I didn’t include Cowen’s second argument, as it involves a deontelogical libertarianism that I don’t buy into. So instead I’ll add my own, out of order, argument two:

2. Regulation of carbon emissions will happen with or without cap and trade. The Supreme Court ruled a couple of years ago that the EPA must regulate carbon emissions as a pollutant, so the choice is not between regulation and no regulation but between cap and trade and whatever the EPA comes up with. My guess is that conservatives would like cap and trade better than an EPA imposed regime.

12 Responses to Why I Favor Cap and Trade

  1. T. Shaw says:

    Do you remember the heady days of Summer 2008 when gasoline was $5.00 a gallon? How does $5 a gallon home heating oil fit in the median American household budget?

    All taxes eventually are paid by the consumer.

    Unintended consequences . . .

    SCOTUS is infallible? Apparently, it’s omnipotent.

  2. j. christian says:


    Rebate the tax or not? How much of this is about revenue generation vs. behavioral change for you?

  3. Blackadder says:

    It’s almost all about revenue generation for me. I suspect that as a means of actually reducing carbon emissions cap and trade would be a failure, though there is a chance I’m wrong about that.

  4. Kathy says:

    Actually, I prefer to be a good steward by making sure that decisions are not primarily motivated by politics rather than accurate science…also taking into consideration both short-term and long-term effects on the people involved.

  5. restrainedradical says:

    It’s not just the EPA. Without carbon pricing, we’ll get piecemeal regulations from Congress. Congress will become increasingly opposed to new exploration for fossil fuels, mandate and subsidize more alternative energy, and impose more restrictions on manufacturers. The choice is between deadweight loss without tax revenue and deadweight loss with tax revenue.

  6. Wouldn’t that tend to suggest a simple tax on fuels, rather than the more complicated cap and trade scheme?

  7. Blackadder says:


    A carbon tax would ideally be preferable to cap and trade, and a VAT would be preferable to a carbon tax. In terms of political viability, however, we’re more likely to get something like cap and trade because the nature of the tax is more hidden.

  8. Joe Hargrave says:

    So we declare this absurd and arbitrary Supreme Court ruling an accomplished fact, and we move on. The history of the entire thing is utterly revolting – I agree with the dissenters that the petitioners, which were essentially a coalition of this country’s blue states and radical environmentalist organizations, had no standing to bring this case before the court. Their argument? That the state of Massachusetts was suffering from rising sea levels.

    This was an left-wing ideological power grab, a hideous abuse of the court system and the U.S. Constitution.

    Have we forgotten Climategate already? Have we forgotten that the whole concept of a “green jobs” economy has proven to be an economic disaster in Spain? Or that Al Gore is a fraud? Much has unfolded since the ruling. This case should have never been heard.

    This problem should have been left to the people to decide as new evidence and new theories came in, but radical left-wing enviornmentalists know that they people don’t support them or their bunk science, so they circumvented the political process by going through the courts, and God help us all in their success.

    We declare then that “some taxes will need to go up” – which addresses no structural problems, which is the equivalent of saying “we will have to keep throwing money at our problems”, and we settle for this absurdity.

    But yes, I understand the superficial argument that, due to the court ruling we “have to choose” between cap and trade or a carbon tax regime. This isn’t a genuine political choice. It is a threat. “Give us cap and trade, Congress, or we’ll install a carbon tax regime!” That’s nothing but naked coercion. But the EPA in turn is being coerced by this ridiculous court ruling, which has made it the direct tool of left-wing environmentalists.

    The left-wing environmentalists used the court system to compel the EPA to do what Congress won’t do because the majority of Americans oppose the economy-killing statism of the carbon regime. It isn’t even about a slower economic recovery, the failure of green jobs, or the fact that cap and trade is a corporate scam – human beings themselves are “carbon emitters.”

    To regulate carbon dioxide with what will – it always does – become an ever-growing scope will mean to regulate more and more aspects of behavior down to the local and the personal level. It sets the stage for an even greater expansion of government control over our lives. China is already taking seriously the idea that its population control measures of regimented family size, forced abortions and other offenses against human life and dignity are key to its own efforts to reduce its “carbon footprint”, and soulless secular radicals all over the Western world aren’t far behind in their own thinking.

    Once again left-wing radicals have manipulated the entire political structure to force their vision of “progress” on the nation. We cannot submit to this, or glibly treat it as an accomplished fact.

  9. Ivan says:

    Chinese manufacturers of solar panels and wind turbines live in the hope of supplying the West in case they wish to continue with their carbon tax fantasies. The Chinese themselves prefer nuclear and conventional power plants. More foolishness along these lines will result only in further erosion of the industrial base. If I am not mistaken, there is a 100% tax on petrol in Singapore running for over two decades now. This has not resulted in the discovery of an alternative source. Before the company I worked in folded we attempted to get financing to manufacture Japanese designed solar panels, in China for onward export to the Western markets. It came to nothing as the carbon boondoggle fell apart early last year. Plain numbers militate against the current crop of alternative energy sources, a subsidy of around 200% is required to make solar or wind energy viable. No country can sustain these levels, those that tried like Greece and Spain are left licking their wounds.

  10. Robert says:

    As a retired weather forecaster from the military – someone who researched this subject in depth and I think reason is in favor of Cap and Tax as an insane proposal to fix the fact that Sun Spots affect PDO (El-Nino and La-Nina). All weather is created by the differential heating of land and water. Water absorbs energy in the form of heat and I do believe this planet is 70% water. But I know it is easy to be confused by all this research. The research that was done by people who releying on Government Funds… Michael Manns Hockey Stick was debunked… I believe he was a part of climate gate… But this can be a hot topic (pun intended). I suggest going to http://www.Icecap.org or look up Dr. Robert Spencer’s fine work on this subject.

  11. American Knight says:

    This is satire. It has to be. Does anyone really think that any of this garage is designed to promote stewardship of sister Earth?

    Mother Gaia worshipers, pagans and totalitarians with a Luciferian bent want this. Why would anyone else?

    This is not about saving the planet, this is about destroying humans. Insanity. But I am still hoping it is just satire.

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