10. It's not a panacea. "Cap and trade is just a tool," says the NRDC's [Dale] Bryk. It might be the backbone of any effective long-term carbon reduction policy, but it's not the only tool we need. Or even necessarily the best. If you want to improve vehicle mileage, for example, raising federal fuel-efficiency standards is "much cheaper for consumers than raising the price of gas," she says. Michael O'Hare, a public-policy professor at UC-Berkeley, emphasizes the need for the government to take a more active role than just setting carbon prices. Sure, higher energy prices might motivate people to change their behavior. "But," he points out, "even if I want to take the tram, I can't do it if there's no tram."
In other words, command and control will remain absolutely necessary. As will taxes. Even with a well-designed cap-and-trade plan in place, we'll need tougher efficiency standards, higher fuel taxes, more sensible land-use policies, green research programs, and plenty more. But in the same way that cutting calories is the core of any weight loss no matter which fad diet you follow, raising the price of carbon is the core of any climate plan. With luck, this could be the year we finally figure that out.
Bottom line: cap-and-trade is just one piece of an overall energy/environment policy. But it's a good piece! And it helps make all the other pieces work better. Read the whole thing for more.
On an inside-baseball note, I wrote this article back in October, but thanks to the miracle of print magazine lead times it's only now hitting the stands. My hope was that this would be good timing, because Barack Obama would be introducing his cap-and-trade plan in March and everyone would be eager to learn what it all meant. In the event, the stimulus bill and budget have pushed everything else off the stage for the moment, but with any luck cap-and-trade will still make its debut sometime soon. So be prepared! Read all about it now!
(But stay away from the comments. Yeesh. Some wingnut organization has apparently already gotten wind of the piece and sent its slathering hordes over to let us all know that GLOBAL WARMING IS A HOAX! You have been warned.)