Today on Volts: I'm too anxious about the political situation to focus on anything, so I wrote a rant about economists, the ways they've botched climate change, & what they might learn from it.
volts.wtf/p/a-rant-about…
volts.wtf/p/a-rant-about…
Several readers flagged that today's post omitted one of the other central critiques of carbon pricing, which that it is the optimally efficient policy only if unpriced carbon is the *only* market failure or externality -- which of course, it isn't. Energy markets ...
... are some of the most regulated, managed, distorted, & subsidized markets in the world. The electricity sector, fully of monopoly utilities, is practically soviet. Tweaking the price on carbon & letting everything else go leaves all those distortions in place.
In our real, fallen world of compromised quasi markets, there's no reason to believe that a single tweak that corrects one market failure is enough. Policymakers, even from a pure economic-efficiency POV, must go beyond that to maximize policy benefits.
What about carbon pricing that complements rather than replaces other policies, that works as a kind of background accelerant while other more targeted policies do the heavy lifting?
Sure! No one of consequence objects to that or ever has, AFAIK.
Sure! No one of consequence objects to that or ever has, AFAIK.
If they can get a complementary carbon price like that in the BBB Act, more power to them! The real objection has never been to carbon pricing as such, only pricing framed as the be-all end-all option. It's econo-pundits shitting on other, non-pricing policies that's the problem.
The problem is outlets like the @washingtonpost editorial board, clinging to stale, decades-old economic cant, forever nagging Democrats to drop all their carefully crafted sectoral policies & replace them with One Magic Tax. That shit is well past it's sell-by date.
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