It’s great news that the centerpiece of Barack
Obama’s energy plan is a 100% auction cap-and-trade mechanism. Ryan
Avent and Peter
Dorman have some niggles, which are on point, but the big picture –
that a cap-and-trade system should be based on auctioning permits rather than
allocating them – is the main thing, and I look forward to the presidential
candidates from both parties following Obama’s lead on this one.
It would be interesting to see what Mark Gimein thinks. Gimein, guest-blogging
at Time.com, describes
a carbon tax as "one bad way to fight global warming that both Democrats
and Republicans love". I’m not at all sure that a carbon tax is loved by
either side of the aisle, and I’m not sure that it’s a bad way to fight global
warming, either. But if you ask someone like Greg Mankiw, he’ll tell you that
the differences between a carbon tax and a 100% auction cap-and-trade system
are really pretty small. So if the former is a bad idea, does that make the
latter a bad idea as well?