Behind the Cap-and-Trade Curtain

Proponents of a cap-and-trade program to combat global warming face an uphill fight. For all their attempts to spin it as a solely environmental issue about saving the planet from extinction, the reality is that it’s a political question that ultimately comes down to economic tradeoffs. That reality explains why a cap-and-trade proposal similar to the one presently being considered crashed and burned in Washington last year, despite Democratic majorities in both houses of Congress. Voters got a sense that a new regulatory regime to limit carbon-dioxide emissions would impose huge costs across the economy, and they let their representatives know that was unacceptable. The irony is that the Democrats beating the drums for a global-warming bill understand — and even embrace — the economics of carbon-dioxide regulation. In an exceptionally candid interview with the San Francisco Chronicle editorial board last year, then-senator Barack Obama talked about bankrupting the coal industry and said, “Under my plan of a cap and trade system, electricity rates would necessarily skyrocket.” Raise the price of coal- and petroleum-based energy so people use less, or force consumers to employ energy technologies that cost vastly more. Either way, higher prices are inherent to cutting emissions...NRO