Saturday, May 2, 2009

economics of carbon restrictions

I found them! Two whole-heartedly "liberal" bloggers I actually like reading. Robert Reich, who I definitely do not agree with much of the time, is still enjoyable and interesting to read several weeks after I picked him up. (It's amazing what a humble, contemplative tone of voice will do for the palatability of your writing. Paul Krugman and Brad DeLong, please take note.)

And, Matthew Yglesias. Very well known but I never subscribed since he's way too prolific for my appetite. But I finally gave him a chance and am very impressed by the structure and organization of thought evident in his writing. Intellectual candy.

Take, for example, this post on the politics of trying to get climate change measures passed. This is the best summary of possibilities and their economic gists I've seen:
Folks have been open the idea of a carbon tax, or else to cap and trade. Within cap and trade they’ve been open to giving the permits away (to minimize the adjustment costs to business) to rebating the revenue (to minimize the adjustment costs to consumers) to using the revenue to finance offsetting tax cuts (to minimize the macroeconomic adjustment) and to using the revenue to finance clean energy investments (to minimize the impact on energy intensive businesses). They’ve been open to mixed strategies for the use of the revenues and to mixed strategies about the extent of permit auctioning.
Once a clear assessment like this is available, we can separately choose our priorities and make the resulting choice easily. (Instead, dogma gets in the way and we're stuck in stalemate. Read the whole post for more details.)

It's not that it's even particularly difficult to come up with a honest, realistic assessment of complicated options. But politicians pandering to uneducated masses and special interests, knee-jerk reactions, emotions, ulterior motives, and idealistic dogma (in particular, religion) make what would be easy for a computer a matter of pulling teeth for human beings. It's not surprising the political process is so depressing to observe.