In 2009, Congress came close to enacting an economy-wide plan to ration carbon via a cap-and-trade system for the stated purpose of reducing climate change. It would have been a very bad deal for America, with costs that were at least ten times greater than expected economic benefits. Fortunately, good sense prevailed, and the Waxman-Markey proposal was defeated, though it was a close-run thing. The Obama administration hasn’t given up on the dream, and is now proposing a more narrowly targeted version of the same basic carbon-rationing concept. On Monday, the EPA proposed new regulations to force a reduction in CO2 emissions from coal-fired power plants by 30 percent from 2005 levels. Because this applies only to a single economic sector, and therefore does not allow markets to seek out the lowest-cost opportunities for emissions reductions anywhere they could be found in the economy, we should expect the cost/benefit ratio to be even worse than under Waxman-Markey.
Posted on: Thu, 05 Jun 2014 00:38:20 +0000
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