Cap and trade: a bearish outlook

Thomas Masterson | July 23, 2010

Two news items that arrived back-to-back in my feed-reader make for an unfortunate combination. The first, detailing the Senate’s abdication of responsibility on global warming, is depressing enough. The political reality is that our elected representatives will not vote for a bill that puts a price on carbon because a) they fear that voting to increase the cost of energy will lose them their jobs, b) they fear that voting to increase the cost of energy will lose them campaign contributions from the energy sector, or c) all of the above. I am leaving out of the equation legislators from coal states, who wouldn’t vote for any bill, not even the compromise that heavily favors coal over oil and natural gas.

The rhetoric has been all about scaring people into thinking they’ll be impoverished by the bill. A Cap and Dividend bill such as the CarbonLimits and Energy for America’s Renewal (CLEAR) Act , which would work something like Alaska’s Permanent Fund, would negate any distribution problems by refunding equal shares of 75% of the revenue directly to each person, more than offsetting the cost to low-income families. The point is, to reduce carbon emissions you either have to raise the cost of emitting carbon or regulate those emissions. The former is more easily done and more socially efficient.

The second story, which appropriately enough is from Alaska, is about increased polar bear sightings at the mouth of the Yukon River. This is far south of their normal range (normal meaning the “old” normal, of course), though the bears have been spotted there occasionally in the past. Why would polar bears be heading south? Because their usual hunting grounds (on the Arctic ice cap) are shrinking. Of course, a focus on polar bears sidesteps the broader implications of global warming. It is, nevertheless, a potent symbol of what we are doing, and apparently are determined to continue doing, to our planet’s environment.

But, really, don’t worry. It snowed in Washington D.C. this winter. Maybe the polar bears heard about it.

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