The Circularity Of Cap And Trade

TW: This Marron piece laments the lack of revenue the cap and trade bill will produce since the emission permits for the most part are being given away as opposed to sold. He is correct in that if the permits were sold much revenue would have been created. But then he late in his piece states why the permits were given away. The reason cap and trade is moving forward instead of a better concept such as an explicit carbon tax is the political malleability of the cap and trade.

Marron titled his piece "Missed Opportunity" but all he is doing is sniping. Folks like Marron can lament the lack of revenue but I am highly confident he and other conservatives would be nowhere to be found if actual auctions of the permits were included in the bill.

Unfortunately conservatives offer no solutions only the status quo. They will attack cap and trade from various angles but again where are the solutions, if the bill includes taxes folks wave the bloody shirt of higher taxes. Yet the same folks are now waving another bloody shirt of "runaway" deficits. And oh btw what about those negative externalities created by carbon energy?

From Donald Marron:
"...I should emphasize that the idea of auctioning all of the allowances is almost certainly impossible as a political matter. Affected industries have enough clout to oppose anything quite that ambitious. And, indeed, one of the beauties of a cap-and-trade system (from an environmental point of view) is that politicians can use free allowances as currency to reduce opposition to the policies. Unfortunately, such horse-trading can easily transform into the pure power politics of pork..."
http://dmarron.com/2009/06/30/big-money-in-cap-and-trade/