Monday, December 7, 2009

Krugman on cap-and-trade

One of the reasons I love Paul Krugman is that he's a pundit with a memory that goes back further than last week. Case in point: in assessing whether instituting a cap-and-trade policy on carbon emissions would work or would cripple the U.S. economy, Krugman looks at the way our country handled the acid rain threat back when I was an earnest elementary school budding environmentalist:

The acid rain controversy of the 1980s was in many respects a dress rehearsal for today’s fight over climate change. Then as now, right-wing ideologues denied the science. Then as now, industry groups claimed that any attempt to limit emissions would inflict grievous economic harm.

But in 1990 the United States went ahead anyway with a cap-and-trade system for sulfur dioxide. And guess what. It worked, delivering a sharp reduction in pollution at lower-than-predicted cost.


Cap-and-trade isn't the government telling businesses what to make and how to make it - it's offering a mechanism by which businesses can profit from reduced emissions.

Last week, I interviewed the owner of Leon's Beauty School in Greensboro, who just installed 165 solar panels and four geothermal panels on the school's roof. She did it because she found out she could get a tax break for doing so, and is now looking for other "green" modifications that will make her business more profitable. Or, as we also call it: capitalism.

Look, right now we have a system of incentives dictated by coal-corporation lobbyists. Cap-and-trade shifts that agenda-setting function to the public, in the form of governments full of people that you and I select to make decisions, and whom we can influence. Between the two, I'd rather have a system where I can have a voice.

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