The tony Pigou Club has the following points:
1. Either a carbon tax or a cap-and-trade program will result in substantially lower economic costs than command-and-control regulations that mandate technologies, fuels, or energy efficiency standards.
Unpersuasive. 10% of the out of date plants in America could contribute to 80% of the unwanted emissions. Direct regulation is best and the burden falls on suppliers to 'get with the program', the most current technology, out of their own pocket - this will force them to manage their balance sheets conservatively, which is a win-win for consumers.
2. Given the uncertainty of the future costs of climate policy, a carbon tax is more economically efficient than cap-and-trade.
Unpersuasive: Because of GOP foot dragging, we're probably already too late to reverse the effects of GHGs and have greatly underestimated the costs. This comment is like moving chairs on the deck of the Titanic. A direct regulatory approach, of course, produces the greatest certainty of future costs.
3. Carbon allowances in a cap-and-trade program would be susceptible to price volatility.
Unpersuasive: Existing programs of cap-and-trade have not had this problem. Given that the price of oil doubles and halves, let's bet that cap-and-trade is 'volatility irrelevant'. Of course, direct regulation could make the market more competitive and force providers to compete on elements other than price...
4. A carbon tax that uses the revenue to offset harmful taxes would substantially reduce costs. A carbon tax generates public revenue.
Unpersuasive: You knew when Krauthammer and other rightwing hard cases got on board with a 'revenue neutral' gas tax it was just posturing to get it passed into law. As you see, the Pigou club is after a new, regressive revenue stream (to paper over the ills of their failed income tax trickles?). Why is anyone surprised or "persuaded" by that?
5. Carbon offsets could undermine a cap-and-trade program.
Unpersuasive: Gas tax could undermine global efforts, if it fails to meet its remission goals and governments do not have the political will to raise the tax. So, both regimes are difficult to implement. Of course, direct, 'command and control' regulation is the easiest way to harmonize efforts and ensure maximum compliance for identical costs. That's not even mentioned or discussed. Why is anyone surprised or "persuaded"?
