Paul Krugman Asks An Excellent Question

[one...two...tree 2,762]

Paul Krugman's column today is on the costs of cap and trade:

"If emission permits were auctioned off -- as they should be -- the revenue thus raised could be used to give consumers rebates or reduce other taxes, partially offsetting the higher prices. But the offset wouldn't be complete. Consumers would end up poorer than they would have been without a climate-change policy.

But how much poorer? Not much, say careful researchers, like those at the Environmental Protection Agency or the Emissions Prediction and Policy Analysis Group at the Massachusetts Institute of Technology. Even with stringent limits, says the M.I.T. group, Americans would consume only 2 percent less in 2050 than they would have in the absence of emission limits. That would still leave room for a large rise in the standard of living, shaving only one-twentieth of a percentage point off the average annual growth rate.

To be sure, there are many who insist that the costs would be much higher. Strange to say, however, such assertions nearly always come from people who claim to believe that free-market economies are wonderfully flexible and innovative, that they can easily transcend any constraints imposed by the world's limited resources of crude oil, arable land or fresh water.

So why don't they think the economy can cope with limits on greenhouse gas emissions? Under cap-and-trade, emission rights would just be another scarce resource, no different in economic terms from the supply of arable land."

Krugman is right. One of the main points of markets is to provide incentives to people to use their ingenuity to solve problems in the most efficient way. Cap and trade is a straightforward market solution to a straightforward market failure. There's no earthly reason why anyone who believes in the marvelous benefits of markets to decide that when it comes to reducing carbon emissions, those benefits will magically cease to exist.

http://www.washingtonmonthly.com/

[w¡n9Nµ7 §£@¥€r 123]

Consumers would end up poorer than they would have been without a climate-change policy.

Finally, someone comes out and says it. Thanks, Paul. I think I'll pass on the wonderful prospect of being poorer, even if it's just by a little

[one...two...tree 2,762]

Consumers would end up poorer than they would have been without a climate-change policy.

Finally, someone comes out and says it. Thanks, Paul. I think I'll pass on the wonderful prospect of being poorer, even if it's just by a little

I've noticed that many who balked at Obama's tax cut are the ones now complaining about an even smaller amount increase in their utilities. ...about as consistent as lumpy clay.

[w¡n9Nµ7 §£@¥€r 123]

Consumers would end up poorer than they would have been without a climate-change policy.

Finally, someone comes out and says it. Thanks, Paul. I think I'll pass on the wonderful prospect of being poorer, even if it's just by a little

I've noticed that many who balked at Obama's tax cut are the ones now complaining about an even smaller amount increase in their utilities. ...about as consistent as lumpy clay.

How do you know it'll be even smaller? Because a study said so? Put a concrete number to it, if people know precisely what to expect it won't be as scary. As it stands now, you're basically saying the experts say it'll be a small increase in taxes so you should just trust them. Never mind the fact that experts have been wrong about a lot of things.

[Mr. Big Dog 10,747]

Cap and trade is a straightforward market solution to a straightforward market failure. There's no earthly reason why anyone who believes in the marvelous benefits of markets to decide that when it comes to reducing carbon emissions, those benefits will magically cease to exist.

Well, one could turn this question around asking what's the earthly reason - after stipulating a straightforward market failure - to propose a straighforward market solution. The answer to that question, seeing that cap and trade is a government mandate, is that the proposed solution isn't exactly a straightforward market solution; the cap and trade market isn't being established by the market, it's established by the government.

[one...two...tree 2,762]

Consumers would end up poorer than they would have been without a climate-change policy.

Finally, someone comes out and says it. Thanks, Paul. I think I'll pass on the wonderful prospect of being poorer, even if it's just by a little

I've noticed that many who balked at Obama's tax cut are the ones now complaining about an even smaller amount increase in their utilities. ...about as consistent as lumpy clay.

How do you know it'll be even smaller? Because a study said so? Put a concrete number to it, if people know precisely what to expect it won't be as scary. As it stands now, you're basically saying the experts say it'll be a small increase in taxes so you should just trust them. Never mind the fact that experts have been wrong about a lot of things.

Projections are never exact, but the estimates are as precise as they can be and people should be able to go with those figures. We really don't have any real alternatives except by staying on the current coarse, which according to those pesky climate scientists - global warming will reach a tipping point within the next 40 years. So the government can just start putting a cap on CO2 emissions straight up...with no Cap and Trade proposal, or we can try this market approach to encourage industries to reduce their CO2 emissions.

[w¡n9Nµ7 §£@¥€r 123]

... and people should be able to go with those figures.

[Ban Hammer 13,364]

... and people should be able to go with those figures.

kinda like those figures we were given touting social security when it first came out?

[w¡n9Nµ7 §£@¥€r 123]

... and people should be able to go with those figures.

kinda like those figures we were given touting social security when it first came out?

I have no idea what you're talking about, old man.

[I AM NOT THAT GUY 5,715]

Consumers would end up poorer than they would have been without a climate-change policy.

Finally, someone comes out and says it. Thanks, Paul. I think I'll pass on the wonderful prospect of being poorer, even if it's just by a little

I've noticed that many who balked at Obama's tax cut are the ones now complaining about an even smaller amount increase in their utilities. ...about as consistent as lumpy clay.

How do you know it'll be even smaller? Because a study said so? Put a concrete number to it, if people know precisely what to expect it won't be as scary. As it stands now, you're basically saying the experts say it'll be a small increase in taxes so you should just trust them. Never mind the fact that experts have been wrong about a lot of things.

It's an easy number to obtain. Take the expected revenues forecasted by the M.I.T. study, and divide by the number of U.S. households. The result is endless posts about how that can't possibly be the right number.

[w¡n9Nµ7 §£@¥€r 123]

Consumers would end up poorer than they would have been without a climate-change policy.

Finally, someone comes out and says it. Thanks, Paul. I think I'll pass on the wonderful prospect of being poorer, even if it's just by a little

I've noticed that many who balked at Obama's tax cut are the ones now complaining about an even smaller amount increase in their utilities. ...about as consistent as lumpy clay.

How do you know it'll be even smaller? Because a study said so? Put a concrete number to it, if people know precisely what to expect it won't be as scary. As it stands now, you're basically saying the experts say it'll be a small increase in taxes so you should just trust them. Never mind the fact that experts have been wrong about a lot of things.

It's an easy number to obtain. Take the expected revenues forecasted by the M.I.T. study, and divide by the number of U.S. households. The result is endless posts about how that can't possibly be the right number.

[The_Dude 1,142]

Consumers would end up poorer than they would have been without a climate-change policy.

Finally, someone comes out and says it. Thanks, Paul. I think I'll pass on the wonderful prospect of being poorer, even if it's just by a little

I've noticed that many who balked at Obama's tax cut are the ones now complaining about an even smaller amount increase in their utilities. ...about as consistent as lumpy clay.

How do you know it'll be even smaller? Because a study said so? Put a concrete number to it, if people know precisely what to expect it won't be as scary. As it stands now, you're basically saying the experts say it'll be a small increase in taxes so you should just trust them. Never mind the fact that experts have been wrong about a lot of things.

It's an easy number to obtain. Take the expected revenues forecasted by the M.I.T. study, and divide by the number of U.S. households. The result is endless posts about how that can't possibly be the right number.

Even the author of that study tells that it is being taken out of context and that the number that people like Bachmann like to parrot is an exaggerated figure.

It's difficult to get people in general to support climate change policy because there is no immediacy to it. There is however an immediate effect on their bank account. Climate change is very slow, and in all likelihood would have no visible effect on curent generations. It's hard to convince someone to pay $200 more a month in energy costs now, so that future generations won't be living in bubbles.

[w¡n9Nµ7 §£@¥€r 123]

It's hard to convince someone to pay $200 more a month in energy costs now, so that future generations won't be living in bubbles.

It's even harder to convince someone to pay an unknown amount of money more per month, so future generations don't have to live in bubbles....

It's the unknown that gets ya. You say it's $50, or $200 or whatever, but as long as they're projections, guess what.... your opponents will have projections of their own.

If you want to fund climate change efforts, introduce a tax. Put a number to it. Who knows, the number might be low enough where I'm comfortable. I'm willing to pay some amount of money, I'm just deeply uncomfortable with paying an unknown amount of money. I already have an unknown component in my budget - property taxes. I don't need another.

[one...two...tree 2,762]

It's difficult to get people in general to support climate change policy because there is no immediacy to it. There is however an immediate effect on their bank account. Climate change is very slow, and in all likelihood would have no visible effect on curent generations. It's hard to convince someone to pay $200 more a month in energy costs now, so that future generations won't be living in bubbles.

[w¡n9Nµ7 §£@¥€r 123]

Frankly, this cap and trade thing would be a valid reason to secede.