Cap and Trade Goes Down

Mankiw will probably be happy:

The New York Times is reporting that the Senate has killed a legislative
attempt to institute a greenhouse gas cap and trade system, after the
bill was lauded as the best thing since sliced bread.

Interestingly, the Congressional Budget Office, among other sources,
agree with conservative economist Greg Mankiw that a carbon tax is
probably a better way to reduce U.S. (and global) greenhouse output--you
just tax the coal and oil producers at a set rate per ton of CO2
emitted, doing away with costly annual swings in the cost of emissions,
and doing away with the need to create an expensive bureaucracy to
monitor emissions.

I think the real problem is the term "tax."

Nobody wants to be associated with a new "tax." Instead, we'll
implement a "cap and trade" system, which includes the word "trade," so
it must be less costly, while a carbon tax--well, that smacks of pinko
communism! New taxes are un-American!

And so it goes...

But more immediately, both Repubs. and Dems. are probably concerned
about doing anything that might be seen as likely to increase the cost
of gas. That could be bad for their election year chances. Most
legislators believe that we'd be better of if we just cooperated, but if
you vote for it, your opponent in November will be able to accuse you of
increasing the cost of gas at the pump, hurting widows, orphans,
students, and hard-working blue-collar Americans.

So they vote against the "cap and trade" system, too.

By way of trying to be optimistic, maybe it'll be better in the
end--maybe we'll get a carbon tax (my first preference) in the spring,
instead of a cap and trade system (my second preference). But for now,
it looks like we're stuck with the status quo (last preference).