Wednesday, February 19, 2014

You Know You're Out of the Loop When...

... draft articles are appearing (here) about proposed climate legislation you never heard of (even though they had no chance in hell of enactment into law).

By the way, the draft article is excellent, and the bill itself adopted an approach I prefer, which is called cap-and-dividend. In essence, it is a per unit tax (in this case, called a "fee") on greenhouse gas emissions much of which is rebated directly to consumers, displaced workers, climate-sensitive industries and areas, or invested in energy research and development. Personally, I think a climate bill is most likely to succeed (in some conceivable, but not the actually existing Congress), if it uses cap-and-dividend to make it revenue neutral, e.g., by reducing other taxes equal to the estimated cost increases passed through to consumers. That is, of course, more easily said than done.

Also by the way, in light of my recent short colloquy with Alex Tabarrok (see here and here) it's worth noting that the bill containing this price-based instrument was sponsored by a Barbara Boxer, a Democrat,and Bernie Sanders, who is nominally Independent but an avowed socialist.

Final by the way, for the most part I'm quite content to be working on climate and other issues from the outside of whatever loops there might be. True, it means anything I write is unlikely to be read by the real "players" (defined as those within the loop), outside of the few friends I have in various loops who will at least glance at my working papers, and therefore less likely to affect prescribed or adopted policy. That's not the worst thing in the world, however, considering that any particular normative position I might advocate could turn out to be mistaken. If I have any really good ideas, then chances are that someone in the loop will eventually have them as well.

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