Pricing Carbon

PRICING CARBON....A few days ago I linked to post by Sean Casten about the implied cost of CO2 reduction in the Illinois legislature's recent deal to subsidize a "clean coal" plant in Taylorville. It came to about $400 per ton of CO2, which is fantastically higher than anyone would pay if it were done openly, rather than as part of a byzantine maze of corporate giveaways.

Sean is back today with another interesting post that looks at the cost of CO2 reduction implied in the hodgepodege of tax credits and loan guarantees that are scattered around the legislative landscape right now. Depending on who you are and what's on offer, it turns out that your reward for getting a ton of CO2 out of the atmosphere ranges anywhere from $15 to $253. This, of course, is nuts, and Sean asks:

What might a world look like that did provide a consistent policy signal on CO2? One, we would deploy a host of technologies that are cheaper and more diverse than those we currently deploy in the name of CO2 reduction. Two, we would deploy a host of technologies that cannot possibly be contemplated by those who's knowledge of possibilities is limited to those possibilities we are currently deploying. In other words, all of us.

It's all well and good to have programs that motivate people to develop and deploy technologies that reduce greenhouse gases, and carbon pricing can be an effective part of a broad regulatory program to do that. But if we're going to use carbon pricing as part of our toolkit, we're way better off simply setting a price and letting people figure out for themselves which technologies to develop, rather than having the government pick and choose for us. Not only would that get rid of absurdities like subsidizing ethanol at a higher rate than wind (it ought to be just the opposite), but it would open up the playing field to anyone who can come up with a bright idea for reducing greenhouse gases, not just those who have a big enough lobbying presence to get a break for their particular industry. The result would almost certainly be cheaper and more efficient than a patchwork of targeted tax breaks, and would also promote the development of technologies that no one is even thinking about today. It's time to start.

Dancing

DANCING....Joe Nocera writes today that the original idea behind TARP was right all along: the government needs to buy up toxic assets from distressed banks if we want to get the banking system working again. This idea has gained so much currency in so much of the financial community, he says, "It's pretty much unanimous."

But then, a thousand words into his piece, he suddenly says that the S&L crisis of the 80s is the right model to emulate:

The S.& L.'s were — no question about it — nationalized. The bad assets were stripped out, and handed over to the Resolution Trust Corporation, which was charged with selling them off....What is particularly appealing about an R.T.C.-type approach is that the government doesn't have to value the assets right away, which has always been the sticking point with the toxic assets on the banks' books. It can simply take control of them, and then figure out ways to sell them off over time....But to carry out this kind of program, the government has to be in control of insolvent banks. This also has to be faced squarely.

What a bait and switch! This isn't TARP. This is Swedish-style nationalization. Nocera just wants to erect a massive rhetorical edifice around the idea to make it sound like that's only a minor side effect.

Come on, Joe. If the defining characteristic of all the good plans for dealing with the banking crisis is, as you say, that "they don't dance around the issue," then don't dance. The headline on your column shouldn't have been, "First Bailout Formula Had It Right." It should have been, "Time to Nationalize."

Corn on Hardball: Prosecute Cheney? (Video)

Should the new Obama Administration dig through all the dark ugliness of the Bush-Cheney years--torture, renditions, the destruction of evidence, etc.--and start prosecuting former Bush officials, including the veep? I appeared on MSNBC's Hardball with hawk-of-all-hawks Frank Gaffney Jr. to discuss the matter.

Friday Laugh at an Innocent's Expense

This is hilarious! The Star Wars saga from the POV of someone who's managed never to see even one of the SW movies! Hat tip: Andrewsullivan.com.

Enjoy.

It didn't even occur to me to ask readers to remix my review of copyright reform champion Lawrence Lessig's book Remix, but Stephen Colbert is totally smarter than me. The Comedy Central host has issued a challenge to would-be copyright infringers, demanding that they do not remix his interview with Lessig or throw in any excerpts from his audiobook, "particularly Chapter 7, entitled 'Homosexuals.'" Well, of course some sampling enthusiasts out there took the bait, and then Colbert himself put together a ridiculous rave-up of a video, "as a warning to others." Fluorescent face paint: always good for a laugh.

OK. Some of You Liked Aretha's Hat

What do I know? More importantly, what does my mama know.

I made fun of the Queen's inauguration day hat, (as did Ellen), but the store that disgorged it, a la Alien, has been flooded with requests for replicas. So, at least now we know what millions of black grannies will be wearing to church til spring. And—it must be said—blocking out the sun for everyone behind them.

After hearing about all the trouble people had even getting onto the Mall for Obama's speech on Tuesday, I was starting to feel a little better about watching the whole thing from my comfy couch, instead of, you know, going back in time two years and quitting my job and volunteering for the campaign so that I could have been a part of the festivities. But then I found out about this: playing the Obama Staff Ball on Tuesday night was Arcade Fire, the Montreal combo whose raw, ecstatic 2005 Coachella performance brought me to actual tears. Like Obama getting inaugurated wasn't enough to start up the waterworks, ballgoers were treated to the Fire doing a mandolin-led cover of Springsteen's "Born in the U.S.A.," which you can watch above thanks to Stereogum, but only if you have some Kleenex nearby. If you're still wondering what the heck I'm talking about with all this Arcade Fire blah-dee-blah, watch a clip of that Coachella performance after the jump. Sniff, I just have something in my eye...

*Friday Cat Blogging - 23 January 2009

FRIDAY CATBLOGGING....Poor Inkblot! After two weeks of warm, sunny weather, winter has reasserted itself. It's raining outside, and that means he'd have to get his delicate little paws wet if he wanted to go outside. That was not to be, of course, so after a few minutes convincing himself that the rain was here to stay, he decided discretion was the better part of valor and deposited himself on the bed for a nice midmorning snooze.

And why not? It's been a busy week, hasn't it? I think I might need a little snooze myself. Coming up next week: guest catblogging! I'll bet you can hardly wait.

The GAO Slams EPA's Regulation of Toxics

Yesterday the Government Accountability Office released its annual list of government programs that it considers to be at risk of waste, fraud, abuse, and mismanagement and due for reform. The list included three new programs: the financial regulatory system (duh), the FDA's regulation of drugs (Vioxx, and this), and the EPA's regulation of toxic chemicals. The last has received little press, except here and here in Mother Jones (MJ contributor Mark Schapiro also published a book on the subject), which makes the GAO's bold suggestions much more striking.

The GAO says the EPA has a huge backlog of unperformed assessments that are needed to determine whether individual toxic chemicals should be regulated:

Overall the EPA has finalized a total of only 9 assessments in the past 3 fiscal years. As of December, 2007, 69 percent of ongoing assessments had been in progress for more than 5 years and 17 percent had been in progress for more than 9 years. In addition, EPA data as of 2003 indicated that more than half of the 540 existing assessments may be outdated. Five years later, the percentage is likely to be much higher.

Of course, as we've pointed out, Europe has stepped into this vacuum with a much more stringent set of toxics regulations that essentially puts the burden of proving the safety of chemicals upon the industries that use them. The logical thing would be for the US to simply adopt Europe's approach, and that's essentially what the GAO is now suggesting. The government should "shift more of the burden to chemical companies for demonstrating the safety of their chemicals," the GAO says, "and enhance the public's understanding of the risks of chemicals to which they may be exposed."

"I Won"

"I WON"....Jonathan Weisman reports on today's bipartisan stimulus meeting at the White House:

Challenged by one Republican senator over the contents of the package, the new president, according to participants, replied: "I won."

The statement was prompted by Senate Minority Whip Jon Kyl of Arizona , who challenged the president and the Democratic leaders over the balance between the package's spending and tax cuts, bringing up the traditional Republican notion that a tax credit for people who do not earn enough to pay income taxes is not a tax cut but a government check.

Obama noted that such workers pay Social Security and Medicare taxes, property taxes and sales taxes. The issue was widely debated during the presidential campaign, when Sen. John McCain, the Republican nominee, challenged Obama's tax plan as "welfare."

Good. Obama's efforts to maintain good relationships across the aisle may mean that he's wiser than me in these matters, but I still don't think it's going to work and I hope he doesn't waste too much energy on it. This is the right response for something that's already been hashed out a hundred times before.