You Know Cap-and-Trade Faces Headwinds When the People Who Invented the Idea Speak Out Against It

Wall Street Journal (8/13, Johnson) – Today’s Wall Street Journal has an article on the economists who first dreamed up a way to tackle pollution by using the market—capping pollutants and letting firms trade permits for pollution rights. That work eventually led to emissions-trading programs such as acid rain, that have consistently been held up as an example for the current cap-and-trade plan to curb greenhouse-gas emissions.

One of those economists, Thomas Crocker, doesn’t think cap-and-trade is the best way to tackle global warming—and not for all the economic reasons that push so many folks into the “carbon tax” camp. It’s a question of effectiveness. “Mr. Crocker sees two modern-day problems in using a cap-and-trade system to address the global greenhouse-gas issue. The first is that carbon emissions are a global problem with myriad sources. Cap-and-trade, he says, is better suited for discrete, local pollution problems. “It is not clear to me how you would enforce a permit system internationally,” he says. “There are no institutions right now that have that power.”

The other problem is accurately determing the costs of global warming, which is a whole lot tougher than tallying up the costs of localized acid rain. The WSJ notes that several other economists who hammered out the details of cap-and-trade in the 1960s and 1970s now prefer a carbon tax. Climate Wire, meanwhile, has a huge takeout today on the relevance of acid rain to the current debate.