Climate Task Force

The Economic Policy Risks of Cap-and-Trade Markets for Carbon Emissions

As federal lawmakers scramble to meet the aggressive deadlines they’ve announced for cap-and-trade legislation, they must still recognize the importance of taking the steps necessary to review proposed policies with a critical eye. In order to successfully mitigate the affects of global warming, the White House and Congress must first assess the ability of government policy, regulator responsibility and market mechanisms to deliver a stable carbon price.

In this report, Dr. Joseph R. Mason — Hermann Moyse Jr./Louisiana Bankers Association endowed professor of banking at Louisiana State University — examines the two most prominent approaches for mitigating carbon emissions: controlling the quantity of emissions through cap and trade schemes (cap and trade) and establishing price incentives for reducing emissions through a tax on carbon (carbon tax). By analyzing which program provides the most effective means of curbing pollution while also minimizing economic distortions, Dr. Mason concludes that a carbon tax-shift is the most cost-effective policy option.

The Economic Policy Risks of Cap and Trade Markets for Carbon Emissions

4 Responses to “The Economic Policy Risks of Cap-and-Trade Markets for Carbon Emissions”

  1. […] us on a true path to clean energy. That’s because, once again, cap-and-trade systems are incapable of creating a stable price for carbon. Instead, the price moves up and down with energy demand – an average of more than 20 percent […]

  2. […] us on a true path to clean energy. That’s because, once again, cap-and-trade systems are incapable of creating a stable price for carbon. Instead, the price moves up and down with energy demand – an average of more than 20 percent […]

  3. […] not providing a stable price on carbon, emissions trading systems fail to give families, companies, and even governments the ability to […]

  4. […] them out with such heedlessness that manipulation and deceit are quickly becoming the norm in the market distorting system. One study estimates much of the crime and fraud based in the European carbon market has come at a […]

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