The Noble Lie of Cap-and-Trade

Politicos Patrick O’Connor has a story up today on the early delays in climate change legislation in the House. O’Connor quotes John Dingell, who was unceremoniously pushed aside as chairman of the Energy and Commerce Committee earlier this year, calling for a more transparent regulatory scheme:

“Nobody in this country relaizes that cap and trade is a tax, and it’s a great big one,” Dingell said at a committee hearing last week. The former chairman backs some form of a direct carbon tax that other moderates prefer over the market-based system. Waxman, and his allies in the environmental community, argue that a direct tax on carbon emissions or the commodities that produce them, like oil and coal, would prove ineffective at limiting carbon dioxide in the atmosphere.

There’s a reason Dingell and other moderates — as well as many Republicans — prefer a direct carbon tax, and it’s not because such a tax would “prove ineffective at limiting carbon dioxide.” Quite the opposite, a direct tax would be far more difficult for the oil and gas and coal industries to manipulate. It would also make it possible for citizens/voters/taxpayers to see just what the cost of saving the planet really is, and allow them to do their own cost-benefit analysis. A few years ago the New York Times offered this more accurate assessment of what motivates opposition to a direct carbon tax: “Supporters of a cap-and-trade program argue that explictly raising carbon taxes high enough to make a serious dent in the output of global warming gases would be politically impossible.” It’s not that a tax would be ineffective. It’s just that if people had any idea what this was all going to cost they’d never sign off on it.

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