The Times posted a very thoughtful article explaining why a carbon Cap and Trade policy is now the favored approach making its way through Congress now.
In the end, the merits of the system are mostly that it is expedient, politically and from a management perspective. No one likes a tax, even if it may be the far simpler solution to the problem. But if no one likes a tax, then it’s kind of a tough sell.
Some argue that cap and trade is just a tax wrapped in a politically tolerable icing. They’re pretty much right. But there’s one aspect of cap and trade that differentiates it from a tax — its fungible. Political wranglers can wrangle deals that are palatable, to constituents, companies, conservatives and liberals — the ultimate outcome is the same. This makes it more complicated. But perhaps a little complication is all that differentiates a tax from a successful program.
I have argued before the merits of cap and trade. This article supports my thinking, namely that it’s primary advantage is that cap and trade is the pragmatic solution, and currently, we need a real solution to climate change. The solution that can become law is the best one.