Global warming: The cost of cap-and-trade

What happened

The Senate this week begins debate on a controversial bill aimed at curbing climate change. The legislation would cap emissions of greenhouse gases and let companies buy, sell, and trade emission credits with the aim of reducing these emissions by as much as 66% by 2050. (Forbes.com)

What the commentators said

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This is a chance for the Senate to “abandon its decades-long record of indifference toward global climate change,” said The Denver Post in an editorial. A “cap-and-trade” system is a proven way to reduce the pollution that is cooking our planet, and at minimal cost to corporations. “Global climate change deniers who insist we can continue to exponentially increase America's dependence on imported oil and other fossil fuels are blindly promoting a policy of environmental and economic ruin.”

This legislation wouldn’t exactly save the economy, said Robert Samuelson in The Washington Post. As “allowances” under this system become scarce, they’ll get so expensive that companies will have to pass on the cost to consumers, and the economy would suffer. Cap-and-trade would amount to a tax on us all. If we want to tax fossil fuels into oblivion, “let’s do it honestly” and tax carbon directly.

The “cap and trade” idea “sounds innocuous enough,” said The Wall Street Journal in an editorial. Unfortunately, the “mammoth carbon regulation program” doesn’t distribute the emission credits for free—it auctions them off before the trading can begin. That amounts to a “windfall for Congress,” and what would be “easily the largest income redistribution scheme since the income tax.” No wonder politicians in Washington are so eager to “do something.”

The program is so controversial there’s just a 50-50 chance it will pass, said The Washington Post in an editorial. That’s sad, especially since a report last week by the U.S. Climate Change Science Program said that “carbon dioxide emissions are already having an impact on weather conditions, farmland and wildlife, and how the negative impacts will be felt over the next 25 to 50 years.” Oh, well, at least Congress is finally debating what to do about this crisis.