The Electric Commentary

Wednesday, February 16, 2005

TMQ in the NYT

The good bits:

In practice, cap-and-trade systems have proved faster, cheaper and less vulnerable to legal stalling tactics than the "command and control" premise of most of the Clean Air Act. For example, a pilot cap-and-trade system, for sulfur dioxide from coal-fired power plants, was enacted by Congress in 1990. Since then sulfur dioxide emissions have fallen by nearly a third (the reason you hear so little about acid rain these days is that the problem is declining - even though the amount of combustion of coal for electricity has risen.)

A pleasant surprise of that 1990 program was that market forces and lack of litigation rapidly drove down the predicted cost of acid-rain controls. Now Mr. Bush proposes to apply the same cap-and-trade approach to the entire power industry, in the hope that market forces and fewer lawsuits will lead to rapid, relatively inexpensive pollution cuts.

Here is the real beauty of the Clear Skies plan, something that even its backers may not see: many economists believe that the best tool for our next great environmental project, restraining greenhouse gases, will be a cap-and-trade system for carbon dioxide. Should President Bush's plan prove that the power industry as a whole can be subjected to a sweeping cap-and-trade rule without suffering economic harm or high costs, that would create a powerful case to impose similar regulation on carbon dioxide, too.

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