There's No Such Thing as a Free Carbon Cap
by Virginia Postrel • Apr 21, 2008 at 12:36 am
It's infuriating how all three presidential candidates prattle on about the need to fight global warming while also complaining about the high price of gasoline. The candidates treat CO2 emissions as a social issue like gay marriage, with no economic ramifications. In the real world, barring a massive buildup of nuclear plants, reducing carbon dioxide emissions means consuming less energy and that means raising prices a lot, either directly with a tax or indirectly with a cap-and-trade permitting system. (Alternatively, the government could just ration energy, but fortunately we aren't going in that direction.) The last thing you'd want to do is reduce gas taxes during the summer, as John McCain has proposed. That would just encourage people to burn more gas on extra vacation trips--as any straight talker would admit.
The connection between higher prices for energy and reduced carbon dioxide emissions may not have hit the national consciousness yet, but the LAT's Margo Roosevelt reports that California utilities--and eventually their customers--are beginning to realize this isn't just a symbolic issue.
The DWP, to whom I pay my electric bills, wants out of the carbon dioxide caps. It apparently thinks the law shouldn't apply to socialist enterprises.
UPDATE: If you haven't read it already, check out my favorite economist's analysis of carbon taxes vs. cap-and-trade.
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