Comments peterbarn has made

Joe misunderstands Cap and Dividend

Joe Romm misunderstands cap-and-dividend and my overall approach as well. First, cap-and-dividend is not a `price only' solution. Its most important feature is a descending economy-wide (upstream) cap on carbon as it enters the economy in the form of fossil fuels. This is a physical (and simple-to-administer) limit on the total amount of burnable carbon that can eventually enter the atmosphere. A rising carbon price follows from the descending carbon cap, but it is the cap that transforms the economy and makes sure we reach 80% reductions by mid-century. The market then sorts out who burns the declining supply of carbon, and which technologies (including efficiency improvements) replace carbon.

Cap-and-dividend will transform our economy and ensure that we meet our emission reduction goals on time. It should be the keystone of US climate policy, but it does not eliminate the need for other measures that Romm cites and that are included in Obama's and Clinton's programs. Those are important too, and as Romm suggests, they will keep carbon prices from rising as high as they otherwise would. But without that declining upstream carbon cap, there's no assurance that they will get us to our goals on time, and markets won't transform our energy infrastructure as quickly as they will with an inexorably declining cap.

Romm also misses my point about `taking politicians off the hook.' They're not off the hook because they can blame markets for higher prices (though that shrinks the hook compared to voting for taxes). Mainly, they're off the hook because of the dividends. As prices rise, so will the dividends. A majority of Americans will come out ahead because of the dividends, and everyone will have the chance to come out ahead by conserving. Absent dividends that automatically rise with prices, the middle class will eventually rebel against carbon reductions.

The policies Romm (and Obama and Clinton) recommend are good, and I support them. They will stimulate emission reductions and keep the price of carbon from rising too high too fast. But they are not sufficient. They require both an upstream cap and dividends to (a) make sure we meet our goals on time, and (b) protect the middle class.On An effective climate plans needs to incorporate intelligently regulated energy efficiency standards posted 1 year, 11 months ago 6 Responses