Given that I have highlighted some of the more amusing arguments against the Waxman-Markey Climate Bill (and no, it wont cost American families $3,100 per year) , it is only fair that I state my position. The short answer is best summed up by Paul Krugman in the New York Times:
The legislation now on the table isn’t the bill we’d ideally want, but it’s the bill we can get — and it’s vastly better than no bill at all.
Of course I don’t fully agree with Kurgman either, for example I cannot agree with his assessment of carbon taxes:
the claim that carbon taxes are better than cap and trade — is, in my view, just wrong. In principle, emission taxes and tradable emission permits are equally effective at limiting pollution. In practice, cap and trade has some major advantages, especially for achieving effective international cooperation.
Not to put too fine a point on it, think about how hard it would be to verify whether China was really implementing a promise to tax carbon emissions, as opposed to letting factory owners with the right connections off the hook. By contrast, it would be fairly easy to determine whether China was holding its total emissions below agreed-upon levels.
I find that statement rather odd, as that exact same argument has been made to favour carbon taxes over cap and trade. Suffice to say that ensuring that countries that suffer from corruption comply with their obligations will be difficult under both systems, but to me (untrained in economics) the relative simplicity of a carbon tax gives it the edge over cap and trade. The fact that several trained economists also prefer carbon taxes gives me some confidence on the matter.
But this debate is pointless, carbon taxes are a non-starter in the tax-averse US, so like it or not, cap and trade seems like the only politically feasible option on the table.
The bottom line is that this bill isn’t enough. The reductions in GHG emissions fall short of what is needed, but this bill is better than nothing, and more importantly it means the US wont show up at Copenhagen empty handed.
UPDATE: I realize that while I mentioned the short answer of how I feel about this bill I never mentioned the long answer. The truth is I don’t have a long answer. I haven’t read the nearly 1000 pages and tried to work out how the overlapping policies, regulators, giveaways, exemptions, and mandates may affect US GHG emissions. This is a complex bill, and the details are way over my head, so all I have is the general feeling that while this bill isn’t perfect it is a step in the right direction and is far better then no bill. This is especially true when one considers that this bill means that the US wont show up in Copenhagen empty handed.