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I have heard the arguments that cap and trade is more politically feasible because the giveaway approach allows large carbon emitters, who have large political power, to obtain a large allotment of valuable credits in the government giveaway. However, I recently heard that ExxonMobil opposes cap and trade and prefers a carbon tax. Why is this? Is it because they have relatively less political clout with Democrats in power? Is the government planning to give "green" energy producers more credits than they need and traditional producers like ExxonMobil less than they need?


Is there any research into the subject on whether or not the issuance of government debt is deflationary?






The earth's temperature is currently declining. Let's wait to see where this latest trend goes before we tax carbon. There is not consensus on the problem right now, so legislating anything is premature to say the least.

Science does not fully understand the relationship between CO2 and Temp. It is very possible this relationship is the exact opposite of what Al Gore thinks. It is possible CO2 levels follow Temp. and Solar Activity drives Temp. We could be doing absolutely NOTHING other than penalizing our economy by going after CO2.






This post is unrelated to the article, but I am using it as a means of suggesting a future topic.

Recently, my work has led me to consider the extent to which a combination of pragmatism and populism is replacing ideology in western politics. Your posts in May of this year discussed extensively the ideological irreconcilability of many of modern conservatism's tenets with those of classical conservatism.
Could the positions of modern conservatism originate from misguided populism? Are they pragmatic? Is there a broad trend worldwide, such as the 'third way'?



One day bankruptcy is not an option in Detroit, the next day Obama is organizing a bankruptcy at Chrysler, neglecting bankruptcy law, screwing a Teacher's pension fund, and giving the UAW 55% ownership. Obama calls this pragmatism. I call it BS. It is any means to an end. Obama will do anything to empower his campaign donors even if it requires squandering taxpayer's wealth and stealing property. The Chrysler deal made Hugo Chavez proud...!

Democrats promise everything and anything to make a populist pitch to the American people. They then use excuse-making (code word: pragmatism) to disguise their socialism, or Third Way (essentially the same thing). It really is this simple. This is a party that is based entirely on deception and it is intent on destroying our founding principles in favor of an ideology that has destroyed many great civilizations throughout history. America is going down just like the Roman Empire, just a matter of time before the socialist takes it too far.


@ Anon 2:46 PM


"Bread and circuses" and the entitlement of Roman citizens were great parts of the downfall of Rome. It is an awful tragedy we have forgotten these lessons. Continued American entitlement and politically motivated economic central planning at the expense of market forces will surely ensure our demise. We are on the road to ruin as our politicians squabble over meaningless partisan issues. Both sides are to blame, but none are more to blame than Barney Frank. That he has been thus far to able escape culpability is a testament to the ignorance of the electorate.

Until our legislative and executive branch is free from the influence of monied interests and partisan lobbies there will be no reform, there will be no recovery.


Anon 2:46 and Anon 6:24

What a crock ...! Go find another soapbox. The subject was and is, "Global Warming and Cap and Trade Policies".

Get with the program or get lost.


You guys don't consider alternative viewpoints on man-made global warming, and you want me to get lost...?

Cap and Tax is the dumbest idea I've ever seen from Washington, not just because it is a tax on energy for the middle class in the middle of a recession, but because the scientific community doesn't even know the relationship between carbon and temperature.




Anon. 8:16

That's better!




As Becker says, the US should invest in carbon capture and storage (CCS) technologies which could potentially provide huge benefits in reducing the amount of CO2 in the atmosphere. But the research grants included in the bill –albeit significant sums-- are probably not enough to quickly overcome the formidable technological challenges that such systems currently face.

The best way to stimulate technological development in this area is to combine the price mechanism of the marketplace with a tax scheme bent on punishing CO2 emissions. The price of using hydrocarbons should be higher IF we assume that there is a potentially huge negative externality from emitting CO2. Taxes on consumption could in the short term replace some of income taxation, for example, making non-CO2-emitting consumption cheaper in relative terms. The ultimate goal would of course be to gradually reduce the CO2 tax base and thus revenues from that source. Alternatively, the tax rate could be raised to catch up with technological advances IF CO2 emissions would at that time still represent a major threat to the environment.

The problem is that under heavy carbon taxation, the current way of life of numerous interest groups –consumer and corporate-- would become a lot more costly. Therefore the most efficient way to change the situation is politically hazardous as long as there is no proof of causally clear threat from CO2 emissions, something which may be hard to achieve because of the complexity of atmospherical phenomena. Lacking a palpable threat of catastrophe with a strong causal link to the CO2 emissions, the change in public opinion towards favouring strong tax based incentive tweaking will be slow at best.


I hope that bill gets through. With this new democratic administration there's a lot of opportunity for change, Obama's already started to do so, too.


Environmentalists may indeed criticize this effort as too little, too late, but it's still better than standing around and not doing anything. We have to try somehow.


Should this tax scam pass....don't look for our economy to rebound in our life times


I think that the carpon entitlements should be given to the people. Every citizen would get an entitlement. All entitlments would be the same size.

Companies that need an entitlement would rent the entitlement from the citizen for 1 year. Each year a new rent price would be negotiated.

Citizens must keep part of their entitlement so that they can be allowed to exhale, and own pets who exhale, and own things that generate CO2. People without permits will be executed.

I expect that companied will be formed that aggregate carbon allotments so that companies can rent them.

Every year individual allotments will be recalculated to adjust for population changes and for environmental goals.

I like this plan because the money goes directly to the people rather than to the ruling class.



CO2 does not drive temperature.


Let's look more at the method of taxation, since it's a more interesting topic than endlessly butting heads over what leads what on a graph.

Assuming that some sort of regulation is going to be passed, cap and trade would be one of the most effective methods. It's worked for Acid Rain before and harnesses the power of the free market to make industries that can easily reduce emissions get rid of them while still allowing companies that absolutely have to emit CO2 to do so, at a somewhat higher cost.

The real question is who profits from this. Philosophically, the emission of CO2 is a negative externality against some people on Earth and a positive externality for others, after all, there are plenty of people who would have new waterfront property or suddenly arable land with a rise in sea levels. Ergo, the proper action of the government is to mitigate the externality by making whoever caused the externality compensate those who are hurt by it. This makes even more sense if you assume that there will be effects no matter what regulations we pass and it is only a matter of degree.

Here the government's plan fails, though. The purpose of their regulation should be to mitigate the externality by forcing the responsible party to compensate those hurt. The government is not in any way the party that deserves compensation. Certainly all the proceeds from the tax or auction will be fed into other projects or paying down debt or reducing taxes- not compensating people who loose their homes to rising sea levels.

This is unethical by any standard. The government is effectively profiting from the negative effects of global warming while taking no action to help those hurt. The government should not be profiting from attempting to mitigate an externality.


Forgot my signature.

The above "Anonymous" comment at July 22, 12:42 AM.

James G


"Certainly all the proceeds from the tax or auction will be fed into other projects or paying down debt or reducing taxes- not compensating people who loose their homes to rising sea levels."

Wasn't the lottery supposed to fund education? How about the tax on cigaretts funding education?

Once government steals our money, it NEVER goes where they promised. This is a ponzi scheme to grow government.

Worst of all.... CO2 does not even influence temperature...! If you listen to the scientific community, they are changing tunes. Most realize CO2 is a complete misdiagnosis of the problem. Only partisan power seekers looking to grow government are continuing this scam.

The earth's temperature is not driven by CO2 emissions, so why are we wasting time with this scam?


Very interesting site. Hope it will always be alive!


Perfect work!

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