The cost of cap and trade

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Curbing carbon emissions might not cost as much as previously thought.

The Environmental Protection Agency presented its analysis of the Waxman-Markey bill on Tuesday and said the contentious plan would cost households less than $150 a year. (source Environmental Capital, Wall Street Journal)
I can afford $150 a year. I'd even pay $450 a year if my extra $300 would pay for those who can't afford $150 a year. As Tim Haab points out, the impact of a carbon tax or cap and trade will be focused on those sectors of the economy responsible for releasing a lot of carbon dioxide into the atmosphere, as it should be. When I see how small the costs are, any doubt I have about moving forward evaporates.

Let's do it.1
I should note that Roger Pielke, Jr. has looked into the numbers and thinks there are some things missing. My take? Any projection has embedded assumptions. I expect the EPA's analysis to be challenged. But I also suspect (based on trust in the professionalism of EPA staffers, not expertise in the field) that the assumptions EPA staffers made in their analysis are reasonable. So I still say,

Let's go for it.
1I remain agnostic on whether "it" should be a straightforward tax or cap and trade and on how permits should be issued under cap and trade. I'll let the experts (and politicians) argue about that.

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