Costly Carbon Cuts

Bjorn Lomberg, author of "The Skeptical Environmentalist", pens a column in the Washington Post warning that global warming alarmism will lead to harmful trade barriers.

Imagine for a moment that the fantasists win the day and that at the climate conference in Copenhagen in December every nation commits to reductions even larger than Japan's, designed to keep temperature increases under 2 degrees Celsius. The result will be a global price tag of $46 trillion in 2100, to avoid expected climate damage costing just $1.1 trillion, according to climate economist Richard Tol, a contributor to the Intergovernmental Panel on Climate Change whose cost findings were commissioned by the Copenhagen Consensus Center and are to be published by Cambridge University Press next year. That phenomenal cost, calculated by all the main economic models, assumes that politicians across the globe will make the most effective, efficient choices. In the real world, where policies have many other objectives and legislation is easily filled with pork and payoffs, the deal easily gets worse.

Yet the real tragedy is that, by exaggerating the threat of global warming, we have awoken the beast of protectionism. There are always forces in society that demand that politicians create more barriers to trade because they cannot compete on an even, fair playing field. Global warming has given them a much stronger voice.

Amendment X: Cap and Trade in Alabama

My friend David Sawyer covers the Waxman-Markey Cap and Trade Bill for the Alabama Policy Institute.

The Cap-and-Trade Bait and Switch

I've spoken in the past on how cap-and-trade can be an effective, market-based way to limit unwanted emissions. If done properly, cap-and-trade is a powerful tool that imposes a proper price on externalities, and solves the ever-vexing "Tragedy of the Commons".

Regardless of your opinion of cap-and-trade schemes generally, David Schoenbrod and Richard Stewart write in the Wall Street Journal that the Waxman-Markey bill moving through Congress isn't it.

Waxman-Markey is largely top-down regulation dressed in cap-and-trade clothing. It purports to set a cap on greenhouse gases, but the cap is so loose in the early years that through the use of cheap offsets the U.S. need not significantly reduce its fossil-fuel emissions until about 2025. Then the bill would require a nosedive in fossil-fuel emissions. This balloon mortgage pledge of big cuts later is unlikely to be kept.

The top-down directives come in three forms. First, electric utilities, auto makers and states get free allowances on the condition that they comply with regulations requiring coal sequestration, alternative energy sources, energy conservation, advanced auto technology and more. Second, many other provisions of the 1,428 page bill mandate outright regulation on subjects ranging from how electricity is generated to off-road vehicles and household lighting. Third, still other provisions provide subsidies for government-chosen technology "winners" such as alternate energy sources, plug-in vehicles and weatherization of old buildings.

Hattip: Volokh Conspiracy