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The carbon pricing pony

Paul Krugman is annoyed by carbon tax utopians who oppose the most aggressive measures that seem possible in favor of much more aggressive measures that are simply impossible:

For here’s the way it is: we have a real chance of getting a serious cap and trade program in place within a year or two. We have no chance of getting a carbon tax for the foreseeable future. It’s just destructive to denounce the program we can actually get — a program that won’t be perfect, won’t be enough, but can be made increasingly effective over time — in favor of something that can’t possibly happen in time to avoid disaster.

One way to make this point is that you see an enormous amount of smart commentary on the question of "what carbon pricing policy would we favor in a perfect world" but very little commentary on the question of "how do you improve the bills we're likely to pass?" Nor do many people argue that not passing anything now and not passing anything in the future is better than passing a compromised bill now. Instead, it's all just imagine a carbon-pricing pony ...

By Ezra Klein  |  December 7, 2009; 3:45 PM ET
Categories:  Climate Change  
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I normally think that half a loaf is at least a step in the right direction, the current health care debate is way short of ideal, but I appreciate the progress. However, with climate change policies, incrementalism may be too little, too late. A badly flawed cap-and-trade bill may be worse than no bill at all. It would be like seeing a man drowning 100 feet away, and throwing him a 50 ft rope.

Posted by: marvyT | December 7, 2009 4:02 PM | Report abuse

Health reform turned into a giant giveaway to the health industry, and cap-and-trade is even worse. It creates more imaginary things that Wall Street will charge us to buy and sell, with working families once again getting the shaft. Sorry planet. Here's hoping it doesn't pass.

Posted by: bmull | December 7, 2009 4:27 PM | Report abuse

The problem isn't with cap and trade per se, it's the way various interests have gamed it in the legislative process. There's no reason to believe a carbon tax would fare any better. Krugman's point is that, in theory, cap and trade and a carbon tax should work the same. The question is, which one can get through Congress with the least corruption?

Posted by: tl_houston | December 7, 2009 5:20 PM | Report abuse

I'm not sure "passing an unambiguous carbon tax" is honestly that much more "utopian" than "passing any sort of functional climate bill at all" with this Senate.

Posted by: NS12345 | December 7, 2009 5:34 PM | Report abuse

This is easy math that not enough people understand.


( big attainable positive benefit) x .9
= most of big attainable postive benefit
[with possiblity of improvement]

That ENORMOUS improvement looks really tempting, but it's a big waist of time.

Posted by: bcbulger | December 7, 2009 5:41 PM | Report abuse

I'm also a little amused by this phrase:

""how do you improve the bills we're likely to pass?""

Well, first we could try to identify one. What did the "likely to pass" healthcare bill look like before the Senate started debating it in earnest again? I recall a certain Presidential candidate being pretty clear about preferring at least some public backstop.

Let's be real. The plan that's going to pass is going to be Boxer/Kerry (or, even MORE likely, whatever Baucus spits out of Finance) - [Lieberman/Nelson compromises * the amount of time this thing gets debated]. I'm sure that we'll somehow end up paying billions to AEP and Shell to produce MORE emissions by the end of it.

Posted by: NS12345 | December 7, 2009 5:53 PM | Report abuse

I like Krugman's editorial except for the part about us getting a "serious" cap-and-trade policy in the current legislation. It's actually more of a joke of a cap-and-trade policy that we'll get, although that's admittedly better than none at all.

Posted by: redwards95 | December 7, 2009 6:18 PM | Report abuse

Utopian? Why insert the name calling, Ezra? Some of have accused the carbon tax as TOO business friendly... Is it utopian that France and Taiwan passed a carbon tax? I'm for a very pragmatic carbon tax.

Also Waxman-Markey cap and trade is extremely unaggressive. You are doing PR for the Administration and the Democrats in Congress.

Cap and trade as applied to greenhouse gas emissions...that's an economist's thought experiment gone awry!!!

Check your language and your facts!

Posted by: michaelterra | December 7, 2009 8:44 PM | Report abuse

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