Carbon Tax vs. Cap and Trade

Carl Milsted, Jr on May 7 13:38:57

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Originally Published December 23, 2010

Well, I finally did it. I finally had a look at the Waxman-Markey cap and trade bill. One word: aaaaaaaaaaaaaaaaaaaaaaaaaaaaaahhhhhhhhhhhhhhhhhhhhh‼‼!

Or, to be more precise, don’t try to follow that link with Internet Explorer 8 or below. Your browser will struggle. The bill is a quarter million words long! It’s like a Robert Jordon novel, only more tedious. Every legislator who voted for this monstrosity ought to be strapped into a Clockwork Orange chair and forced to read it in one sitting.

And I actually want to stop global warming; I am not a climate change denier.

But after looking at this bill, a few extra feet of seawater doesn’t look so bad. This bill combines the micromanaging mindset of the worst Democrats with a big-business giveaway worthy of the worst Republicans.

Many opponents of this bill refer to it as “cap and tax.” This is way too charitable. This bill will jack up the cost of energy and give the money to…today’s biggest contributors to global warming! Imagine if we gave crime permits to the Mafia and other gangs, and allowed them to sell permits if they choose to reduce their own criminal activity. This is the logic of cap and trade.

Don’t get me wrong. I don’t believe we should punish past carbon emissions. That would be ex post facto punishment, which is not only unconstitutional, it’s just plain wrong. But if science has indeed determined that burning fossil fuels harms the environment, then doing so should be penalized. Longtime polluters should be penalized at the same rate as any new business which needs to burn some carbon to operate.

Besides, the government needs the money. We could use a carbon tax just to avoid going bankrupt.

The actual cap and trade portions of the bill are just that: portions. The bill has a few hundred pages of subsidies, incentives, etc. for a whole host of energy saving and alternative energy technologies. The bill reads like a Stalin era five year plan, only in something resembling English. Econ 101 folks: if carbon fuel prices go up sufficiently, conservation, alternative energy and mass transportation will all pay. With a carbon tax we could reduce the number of energy programs and subsidies.

We should have some government research into advance nuclear energy, such as liquid fluoride thorium breeder reactors, in case solar doesn’t cut it. Nuclear energy research should have the government involved because of safety concerns. The Energy Star program might be worth keeping as well. Government as an independent evaluator of hidden consumer produce features might be beneficial.

I say “might” because with regulatory capture, the government may well be worse than a private sector auditor. When government gets too complicated for the citizens to track, regulatory capture is a given. Cap and trade is a huge rat’s nest of possible areas for regulatory capture. If you are a corporatist, opt for cap and trade. If you believe in democracy, tell your friendly neighborhood legislator you want a carbon tax instead.