Barack Obama Gets it Right on Cap-and-Trade

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, 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?

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