Last week I blogged on the President’s remarks to the Business Roundtable about why he campaigned on 100% auctioning of CO2 permits: “If you’re giving away carbon permits for free … it doesn’t work.”
A couple of leading mainstream economists who opine on the weather (MEOWs) hissed and pawed at the President because he supposedly made a couple of errors in his remarks, E&E News (subs. reqd) reported Friday night.
The first thing to say is that as The Economist (!) magazine itself labeled economists, “a tribe renowned in the wider world for its desiccated view of human welfare” (see “Voodoo Economists 4: The idiocy of crowds or, rather, the idiocy of (crowded) debates“).
The second thing to know about the question of whether CO2 allowances created by a cap-and-trade bill should be auctioned or allocated (i.e. grandfathered to polluters or given away for free) is that most economists support auctioning off the vast majority of apartments — see, for instance, “Statement by economists supporting 100% auction of carbon permits.”
The third thing to know about the argument for pursuing a CO2 cap-and-trade system is that the case was largely built around the success of such a system for reducing SOx emissions. In particular, the system succeeded in achieving reductions at far lower costs than the the models of the energy sector or conservatives had predicted (see “Wrong Again 1: Business Attacks Climate Security Act“). This was (and is) the centerpiece argument for a cap-and-trade, as I can test from my tenure running the DOE Office of Energy Efficiency and Renewable Energy in the months leading up to the Kyoto protocol.
That was Obama’s point when he said of the system he proposes: