The only thing worse than cap & trade …

… is Marty Feldstein’s lame arguments against it.

  • He cites CBO household costs of policy that reflect outlays, rather than real deadweight or welfare losses after revenue recycling.
  • He wants the US to wait for global agreement before moving. News flash: there won’t be a global agreement without some US movement.
  • He argues that unilateral action is ineffective: true, but irrelevant if you aim to solve the problem. However, if that’s our moral philosophy, I think I should be exempted from all laws – on a global scale, no one will notice my murdering and pillaging, and it’ll be fun for me.

There is one nugget of wisdom in Feldstein’s piece: it’s a travesty to overcompensate carbon-intensive firms, and foolish to use allowance allocation to utilities to defeat the retail price signal. I haven’t read the details of the bill yet, so I don’t know how extensive those provisions really are, but it’s definitely something to watch.

Well, OK, lots of things are worse than cap & trade. More importantly, one thing (an upstream carbon tax) could be a lot better than Waxman Markey. But it’s sad when a Harvard economist sounds like an astroturf skeptic.

Hat tip to Economist’s View.

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