There's No Such Thing as a Free Carbon Cap
It's infuriating how all three presidential candidates prattle on about the need to fight global warming while also complaining about the high price of gasoline. The candidates treat CO2 emissions as a social issue like gay marriage, with no economic ramifications. In the real world, barring a massive buildup of nuclear plants, reducing carbon dioxide emissions means consuming less energy and that means raising prices a lot, either directly with a tax or indirectly with a cap-and-trade permitting system. (Alternatively, the government could just ration energy, but fortunately we aren't going in that direction.) The last thing you'd want to do is reduce gas taxes during the summer, as John McCain has proposed. That would just encourage people to burn more gas on extra vacation trips--as any straight talker would admit.
The connection between higher prices for energy and reduced carbon dioxide emissions may not have hit the national consciousness yet, but the LAT's Margo Roosevelt reports that California utilities--and eventually their customers--are beginning to realize this isn't just a symbolic issue.
Fighting global warming is the feel-good cause of the moment.
But in California, the self-congratulation that followed the 2006 passage of the nation's first comprehensive law to curb emissions of planet-warming greenhouse gases is fast turning to acrimony.
A ferocious behind-the-scenes brawl over how to regulate electricity plants, the biggest source of carbon dioxide after motor vehicles, has pitted Southern California's public power generators against its for-profit utilities.
Why? Because some taxpayer-owned utilities, such as Los Angeles' Department of Water and Power, get close to half their electricity from the nation's dirtiest energy source: coal.
The DWP, to whom I pay my electric bills, wants out of the carbon dioxide caps. It apparently thinks the law shouldn't apply to socialist enterprises.
UPDATE: If you haven't read it already, check out my favorite economist's analysis of carbon taxes vs. cap-and-trade.