Long time readers know we are adamantly opposed to allowing Wall Street anywhere near the carbon piggy bank. The numbers are so big and the opportunities for traders to act like traders that I have come to the conclusion (festering in my fevered brain since the Rio shindig in '92) that the better option is to run the money through the U.S. treasury.
That was not an easy thing to write but if we were to cap-and-tax or cap-auction-100% rebate and/or eliminate the payroll tax we would be practicing the basic economics taught in Econ 10: tax what you want less of, don't tax what you want more of.
From the Houston Chronicle:
Maybe it's the threat of the EPA having say over carbon emissions, but all of the sudden lawmakers whose only position on climate change legislation was to "kill the bill" are starting to show signs of compromise, reports our colleague Jennifer Dhlouy.
"We need to dispense with this somewhat blind loyalty to economywide cap-and-trade," said Sen. Lisa Murkowski of Alaska, one of a handful of Republicans who have signaled they might support a climate change bill. "We need to be encouraged to look to all of the alternatives, and, unfortunately, so many of them have just been kicked to the side with the discussion about cap-and-trade. We've kind-of boxed ourselves in."
Among the ideas being considered by the GOP Senators:
• A "cap-and-dividend" where any more raised by auctioning off emissions credits would be directly paid back to tax payers, in theory neutralizing consumer costs.