Cap & Trade: all cost, no benefit

Martin Feldstein writes in the Washington Post that the proposed cap-and-trade system of carbon offsets would be a costly policy that would penalize Americans with little effect on global warming. The proposal to give away most of the permits only makes a bad idea worse. Taxpayers and legislators should keep these things in mind before enacting any cap-and-trade system.

He must be some wild-eyed kook from wingnut land, right? Sorry, Feldstein is a professor of economics at Harvard University and president emeritus of the nonprofit National Bureau of Economic Research, and was chairman of the Council of Economic Advisers from 1982 to 1984. I’ll block quote just these two paragraphs:

“The Congressional Budget Office recently estimated that the resulting increases in consumer prices needed to achieve a 15 percent CO2 reduction — slightly less than the Waxman-Markey target — would raise the cost of living of a typical household by $1,600 a year. Some expert studies estimate that the cost to households could be substantially higher. The future cost to the typical household would rise significantly as the government reduces the total allowable amount of CO2.

“Americans should ask themselves whether this annual tax of $1,600-plus per family is justified by the very small resulting decline in global CO2. Since the U.S. share of global CO2 production is now less than 25 percent (and is projected to decline as China and other developing nations grow), a 15 percent fall in U.S. CO2 output would lower global CO2 output by less than 4 percent. Its impact on global warming would be virtually unnoticeable. The U.S. should wait until there is a global agreement on CO2 that includes China and India before committing to costly reductions in the United States.”

Here’s the Bare-Naked Truth. Hell, this guy can’t even afford clothes, just wait until his energy costs go up $1,600 next year!

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