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Showing posts from January, 2009

Allocating for Climate Change is a Future Investment

For over thirty years I have worked on various environmental endeavors always in conflict with short run economic thinking. Environmental groups such as the Environmental Defense Fund and National Wildlife Fund must be "mindful" that they are walking in a economic "minefield." In mid January the U.S. Climate Partnership announced their plan for a cap-and-trade system for a 42 percent cut emissions by 2030. However many economists and executives are skeptical with me included. Exxon CEO, Rex Tillerson called this a “stealth tax” cap-and-trade system endorsing a tax on carbon emissions that are more transparent and predictable. While there is widespread support for a cap-and-trade system, however, such measures create enormous volatility in the price of permits and ways for gaming the system according to financial experts. This national carbon tax bill would be phased-in and revenue-neutral. Leading economists have recommended for enactment of a carbon tax as the