Sorry for the light posting today, I spent most of it hanging around outside Brian's hospital room. He, in turn, wanted internet access so he could catch up on blog reading. We got him his iPhone and everyone was happy. But I did want to respond to this Dave Roberts post on cap and trade. Dave argues that cap and trade won't hurt the economy, and will certainly be better for growth than unchecked global warming and scarcity-driven volatility in energy prices. I agree with him. He thinks, however, that I don't. Which is peculiar. The point I made in my original post is very limited, and not, to my knowledge, controversial: A cap and trade carbon plan will raise the cost of carbon intensive products like gasoline. That's how it works to discourage carbon consumption. By capping emissions, and then lowering the cap, it makes carbon-intensive products relatively more expensive, which in turn increases the economic incentives to purchase, and develop, non-carbon intensive products. This, in the short-term, makes gasoline more expensive. That's the point of it. There are a variety of ways to compensate people for making gasoline more expensive, but gasoline will still be more expensive. That's going to make cap and trade a tough sell. But that doesn't mean it will be bad for the economy, or bad for people in general. Money not spent on gasoline is money spent on other things. As carbon-intensive products become pricier, other products will become cheaper. Lots of good stuff will happen, and my sense is that a move away from oil will actually entail significant lifestyle benefits. That's why I talk about transit and food policy a lot. Transit is awesome. Not sitting in traffic makes people happier. Riding on subways is fun. Biking is a joy. Meat consumption is another major carbon issue, but here again, a diet where red meat was relatively more expensive and vegetables and grains relatively less would be healthier for us. It would mean fewer cardiovascular surgeries and less time watching loved ones breathe through a tube. It would free up health care money to spend on other things. Cheap carbon has substantially shaped the evolution of our economy and national lifestyle. It's done an enormous amount of good. But some of the byproducts have been problematic. As we move away from a carbon-based economy, we'll have opportunity to rethink some of those issues, and possibly move forward in ways that make us happier, healthier, and freer. There's nothing to fear in that.
