Kevin Drum’s done a series of posts on the carbon tax versus cap and trade issue recently, but I think the last one gets at the most important bit.
I’d put it this way: It’s true that the carbon tax I would design would be better policy than the cap-and-trade program congress is designing, but by the same token the cap-and-trade program I would design is better than the carbon tax law congress would right. Congress is an inherently problematic institution, populated by flawed human beings who are primarily accountable to the short-term desires of narrow interest groups. Consequently, it’s a rare day indeed when a congressional process results in an optimal policy outcome. But that’s just life. There’s no sense pretending that if advocates took a different approach that the inherent limits of politics would be transcended.