Let the Market Decide

TW: Trying a little jujitsu here. Free markets are fairly revered in the U.S., more than they deserve in my opinion. Not that they are bad but just not the panacea many folks perceive them to be. One reason they are not a panacea is certain economic activities are not priced by the market. I discussed them a while back here.

Burning carbon creates negative externalities that are not priced into the market. As Klein outlines some folks would like to get all granola-ish and somehow reduce their carbon footprints. This is a highly inefficient way to accomplish a valid goal. I am for letting the market function by pricing in the negative impact of carbon emissions. Folks can argue over how to value those negative externalities (i.e. is climate change real, do we really care if we are subsidizing Chavez/Ahmadinejad etc., do we care if we need to deploy our troops in hellholes to guard oil supplies, would have less sulfur in the air be a good thing) but pricing carbon is the right way to do it.

From Ezra Klein at WaPo:
"...making sensible decisions about how to reduce carbon emissions is really, really hard. It's intuitive, for instance, to eat local foods. But it's less intuitive to eat foods that are shipped rather than trucked. And few people know that it's much more important to reduce meat than reduce miles.

...Lots of activities burn carbon. Some, like driving, have been hyped, and everyone knows about them. Some, like raising large numbers of animals to feed to humans, have not been hyped, and so people don't know about them. Some, like whether to take the bus or the metro, are simply unclear to people who haven't studied the issue. Asking people to be carbon calculators is a silly way to reduce their carbon output.

The problem is not that we burn carbon. It's that we don't price the harm of the carbon we burn into the products we buy. To put it slightly differently, it's that we don't burn carbon responsibly. That's why something like cap-and-trade, or a carbon tax, makes sense. The point isn't to have me running a thousand calculations about whether I should drive, walk, metro or bike; or whether I should eat a local chicken or buy a spinach salad. It's to have me simply go about my day and let prices make those decisions for me. Goods or services that burn more carbon will be more expensive. Goods or services that burn less will be less expensive. That's information I actually know how to use."
http://voices.washingtonpost.com/ezra-klein/2009/08/burn_carbon_responsibly.html