Dan Gardner . Harper economics


Dan Gardner interviews Harvard University economist Gregory Mankiw on climate change economics. The article is an interesting description of the differences between cap-and-trade and carbon tax policies.

So why is the cap-and-trade option preferred by almost all politicians? As usual, it’s politics. Under cap-and-trade, politicians can claim they are hitting “big polluters” while leaving the ordinary person unscathed. That’s nonsense, of course. Costs borne by big polluters will be passed on, so the ordinary person pays either way. But with cap-and-trade, unlike a carbon tax, the cost to the ordinary person is hidden.

Via Worthwhile Canadian Initiative