David Frum's reply is actually more confusing than his original. He admits, first, that he's describing Henry Waxman's cap and trade bill, not, as previously stated, Barack Obama's. Which makes the original title of his post, "Tricky, Tricky, Mr. Obama," a bit weird. But so be it. It is Waxman's bill, David says, that he was describing when he said that cap and trade will only raise revenue if carbon emissions increase. David seems to think that Waxman caps carbon "at present levels and [polluters] only pay if they exceed those levels." Not true. Waxman's bill is on his web site: "Beginning in 2011, it cuts emissions by roughly 2% per year, reaching 1990 emissions levels by 2020. After 2020, it cuts emissions by roughly 5% per year. By 2050, emissions will be 80% lower than in 1990." Those reductions are achieved through a carbon permit auction where polluters purchase the right to emit a ton of carbon. Each permit purchased creates federal revenue. And the fact that the cap continues ratcheting down means, by definition, that polluters continue to pay as emissions decrease from present levels. But the direction of David's misconception in interesting: It turns cap and trade from a climate change plan into a backdoor revenues project. Many liberals I know are confused by conservative antipathy to cap and trade, given that it's a fundamentally market-driven proposal meant to correct a widely acknowledged market failure (an unpriced externality). But David seems to think cap and trade is just a sneaky tax meant to tighten government control over the economy. Indeed, he thinks that the government only makes money if emissions increase, and so it has little reason to actually force lower emissions. This isn't correct. Not in Waxman's bill, not in Obama's bill. But among conservatives, David's an uncommonly policy-oriented thinker. So if this is what he thinks, it's not hard to see why folks farther to his right have decided the whole damn thing is a cynical hoax. Related: Kevin Drum has an excellent cap and trade primer in the latest issue of Mother Jones (which also happens to be a particularly excellent issue of Mother Jones -- buy it of you see it).
