28 Oct 2008

Cap & Trade: If I Can Change Just One Mind…

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…I’m not sure it’s worth it, but hey it’s encouraging. AEI’s Ken Green and I butted heads (politely) at last year’s Heartland “denier” conference in NYC. Green acknowledged the caveats but, at that time, still thought the government should try to implement a revenue-neutral cap & trade program. He has now apparently retracted his earlier support (HT2 Rob Bradley):

I previously felt that a revenue-neutral carbon tax was a good idea, because it would be both effective and could even be economically beneficial. But three developments have caused me to retract my support. First, rising energy costs have already imposed a huge carbon tax with little GHG reduction. This suggests that the elasticity of energy use could be lower than prior estimates, meaning it would be a useless gesture. Second, as implementations of carbon taxes in Europe and Canada have demonstrated, governments simply cannot implement such tax systems without sucking up some of the revenue, and using the rest to benefit crony-capitalists and steer money to favored constituencies. And finally, because using biofuels such as ethanol would let people save on carbon taxes, demand for such fuels will grow, only compounding the environmental and nutritional mischief they cause.

What is interesting about Ken is that he is quite clearly still concerned about manmade climate change (just skim his article above). So he is living proof that someone can endorse the IPCC’s science, but not its policy recommendations.

And by the way, Ken is not recommending a “do-nothing” approach:

Policymakers who really want to implement rational climate policy should be focused, here and elsewhere, on building resilience to climate variability by removing the kind of risk subsidies that lead people to put themselves in climatically sensitive areas, to build on flood plains, in storm tracks and so on. They should be focused on ending the kind of subsidized infrastructure programs that lead people to build giant cities in deserts dependent on far-away sources of seasonal snow. And they should put economic repairs first: only the surplus wealth of productive economies allows us to protect our environment, set aside natural resources, and tread more lightly on the Earth.

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