Megan McArdle on cap and trade

I don’t want to get into an argument about climate science here, so let’s just assume arguendo that the skeptics are wrong, wrong, wrong. It does not therefore follow that the public would have enthusiastically embraced cap and trade if not for those darned skeptics. People do not like to make painful personal sacrifices for the sake of people who aren’t born yet and mostly live in very far away places (that being who will bear most of the brunt of global warming).

Personally, I’m pretty skeptical that enough Democrats would have embraced cap and trade, even if the president had put it before health care. Democrats were willing to do a suicide charge on health care because they (incorrectly, so far) assumed that it would be much more popular after it was passed. Only a lunatic could have thought that Cap and Trade would be more popular once it started taking chunks out of peoples’ paychecks. Especially in the middle of a brutal economic crisis.

Source. HT: Vexnews twitter feed.

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13 Responses to Megan McArdle on cap and trade

  1. Bruce

    Lets see.

    The original carbon credits exchange CCX closed after prices dropped to 5 cents/tonne and stayed there.

    The UN equivalent dropped to 15 cents/tonne recently.

    California’s carbon credits sold at the minimum when they were issued. You can guess what’d happen if they removed the floor price.

    The definition of insanity is to do the same thing over and over expecting different results.

    Um, well yes then there is us, we have a cap and trade due in 2015 courtesy of our Dear Leader. What does it say about us then? Oh.

  2. PSC

    This argument works against any unpopular policy measure. You could just as well say:

    Personally, I’m pretty skeptical that enough Republicans would have embraced spending cuts, even if the president had put it before health care. Republicans were willing to do a suicide charge on health care because they (incorrectly, so far) assumed that it would be wildly unpopular. Only a lunatic could have thought that spending cuts would be more popular once it started taking chunks out of peoples’ benefits. Especially in the middle of a brutal economic crisis.

  3. eb

    That’s rubbish PSC. You’ve got it all muddled up!

  4. David

    Why not get into an argument! Science has two facets – a falsifiable hypothesis and a repeatable measurement. Climate-crap has neither. This should be repeated ad nauseum.

  5. entropy

    This has certainly always been my position, and there is no need to buy into wether or not AGW is a real prediction. The two worse things about anything pricing carbon emissions are:
    1. verifying that the purchased product actually exists. It’s too open to scamming;
    2. The free rider problem. In fact I would go further and say that is little more than tilting at windmills, as are all mitigation approaches. Any carbon tax applied in Australia, for example, won’t make any difference to the outcome on its own. And given the likelihood the big emitters won’t do anything, it is insanity.

    The productivity and wealth generation lost to a domestic trading scheme would be better off being used to adapt to the climate change that would happen anyway, regardless of what we try to do. In fact, adaptation in the Australian context could well cost less. Given Australia has a highly variable climate anyway, adaptation investment would probably pay off through better climate risk management well before any AGW effects could become observable.

  6. My opposition to C&T began with the assumption that AGW was real, something must be done, therefore what? Ditto my opposition to carbon taxes, to the rush towards wind and solar, to opposition to hydro and nuclear, etc. etc. etc.

    Everything these useless muppets have done can be objected to, loudly, by someone who believes in AGW as the word of God. That I do not so believe is simply the icing on the cake.

  7. Poor Old Rafe

    “Democrats were willing to do a suicide charge on health care because they (incorrectly, so far) assumed that it would be much more popular after it was passed.”

    Suicide indeed. They didn’t even have time to read the legislation right through to find out what they were doing. “We will find out what it means when it is implemented”, or words to that effect.

    You could say the same for carbon trading.

  8. Jim Rose

    great op-ed. Also see Environmental Concern and the Business Cycle: The Chilling Effect of Recession by Matthew E. Kahn and Matthew J. Kotchen NBER, July 2010

    • an increase in a state’s unemployment rate decreases Google searches for “global warming” and increases searches for “unemployment,” and that the effect differs according to a state’s political ideology.

    • increase in a state’s unemployment rate is associated with a decrease in the probability that residents think global warming is happening and reduced support for the U.S to target policies intended to mitigate global warming.

    • In California, an increase in a county’s unemployment rate is associated with a significant decrease in county residents choosing the environment as the most important policy issue.

  9. Jim Rose

    The best writer on global warming is still Thomas Schelling. He specialises in strategy so he focuses on climate change as a bargaining problem. Schelling drew in his experiences with the negotiation of the Marshall Plan and NATO.

    The Kyoto Protocol was not about actions but results to be measured over a decade later. International agreements rarely work if they talk in terms of results. They work if signatories promise to perform specific actions now.
    • A member of NATO did not, for example, promise to slow a Soviet invasion by 90 minutes of it happened after 1962.

    • NATO members promised to raise and train troops, procure equipment and supplies, and deploy these assets geographically. All of these actions can be observed, estimated and compared quickly.

    Climate treaties should promise to do certain actions now such as invest in R&D and develop carbon taxes that return the revenue as tax cuts. If the carbon tax revenue is refunded as tax cuts, less reliable countries, in particular, have more incentive to collect the carbon tax to keep budget deficits under control.

  10. Louis Hissink

    Jim, what has a carbon tax got to do with keeping budget deficits in control? It looks like a non sequitur.

  11. Up The Workers!

    I think your headline is missing a letter “r”.

  12. Pedro

    What McArdle leaves out is the second problem with cap and trade or whatever, the lack of sufficient concerted global action.

  13. Jim Rose

    Louis Hissink, if a carbon tax is revenue neutral, there is an self-enforcing incentive to enforce it to fund the tax cut rather than grant more and more exemptions.

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