A reader writes:
Regarding cap-and-trade, you wrote:
"Because we actually believe that a carbon tax will bring green benefits without the kind of crude regulatory scheme that could stimgatize environmentalism for a long time? Because we think it will work better?"
Those are fair arguments, and I don't condone trying to stifle debate. But in certain cases, I'm not sure a carbon tax is being put forth in good faith (see: some on the right; Exxon). It may be giving the critics too much credit, but it feels a bit like they're promoting a carbon tax to derail a national climate policy altogether. And that's patently not helpful.
Moreover, there are two problems with your argument. You imply that a cap-and-trade is a "crude regulatory scheme". Not so. Yes, it has more inherent moving parts than a 'simple carbon tax', but it's a market-based instrument at the core. A crude regulatory scheme would be a hodgepodge of technology standards and other blunt instruments that lack incentives for innovation and efficient emissions reductions–essentially the bulk of our environmental policy since the 1970s. Second, as Romm points out, there is, for all intents and purposes, no such thing as a "simple tax." A carbon tax policy, should it make it through the Congressional process, would emerge snarled with exemptions, rebates, and the like, making it possibly just as messy as cap-and-trade. (More on this from a recent blog post at TNR)
As for whether it will "work better", I think that comes down to the environmental econ 101 argument about prices vs. quantities–whether we want to ensure that our climate policy is sufficiently low-cost (tax) or whether we want to meet a particular emissions target (cap-and-trade). A tax isn't inherently more "effective"; you have to define the goal.
But let's assume we can get a "simple carbon tax", although not without some work. If I adamantly believe a carbon tax is a 'better' policy, but I know it has little chance of success at present, do I continue to argue in favor of it? Or do I make concessions to political feasibility and support my second choice? Assuming we could pass a cap-and-trade policy this year, what delay would be acceptable to get a carbon tax passed instead? 5 years? 10?
(Oh, and how do you suppose we could stigmatize environmentalism any more than we already have?)
The Dish 